MetaTrader

Trading psychology, trading when we do not accept loss should not have to trade, Boris Schlossberg said.

There is a great scene in the movie Havana, where Robert Redford who plays a jaded poker hustler in the waning days of the Bastista regime leans over to a friend, who wonders why he folded when he had the upper hand and says, "In poker sometimes you have to lose in order to win."

The scene is fascinating on so many levels, because it shows that often the best way to defeat your enemy is to lull him into complacency. But when it comes to trading, I would amend that statement to say, "In trading you always have to lose in order to win." The reason is that trading is a business of risk. No matter how much we want to avoid that idea it's the fundamental essence of what we do.

If you don't want to lose don't trade. Why? Because avoidance of losses will always lead to complete and total bankruptcy. Every major trading disaster, from Barrings to LTCM to Soc Gen, is nothing more than the story of someone who didn't want to lose and as result lost everything.

This week was a bit of a bumpy ride at BKT, but we righted the ship and came through with the winner in the end which we discuss in this week's video. But the lesson of the week should stay with everyone for lifetime, so I'll repeat it again if you don't want to lose, don't trade. It's as much a part of this business, as Novocaine is part of a dentistry.