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THE MARKET WHISPERER 46 3

with risks that cause them monetary loss. It’s just that some people hate
losing money more than others.

How does the test work? It’s based on a visit to the casino. For many, the
casino is an enjoyable outing. Beforehand, most of us define our maximum
gambling loss, enjoy the atmosphere, lose a little more than we planned,
and call it quits. Later we will dress for dinner, return exhausted, and fall
asleep immediately. The day will be remembered as a fun outing.

But not all of us will enjoy this experience. Some people will hate having
lost. They will be angry with themselves for losing two days’ pay in just two
hours, and may even punish themselves by foregoing other pleasures for
several days to compensate for the gambling loss which they perceive as a
really stupid activity. It is almost too obvious to say that they will never set
foot in a casino again, not because they lack money but because they just
loathe the idea of being a loser. Losing is a phenomenon that causes pain,
but most of us take a casino loss in stride with a smile. Which description
best fits you?

SMART A loss resulting from correct behavior is not painful. It is
MONEY simply a lack of luck. And lack of luck is also an inseparable
part of intraday trading.

How do we cope with the pain of losing? If we know that despite a
casino loss we would enjoy the evening out, then we cope well with loss.
The same is true of trading. Every trader, no matter how successful, must
cope with the pain of loss. Traders who understand that this pain is an
inseparable aspect of the trading process are able to cope, and pass the
test.

Keep in mind that as you start out, you will need to cope with days of
multiple losses based on mistakes generally derived from a lack of self-
discipline. Coping with the mistakes is painful, but remember that every
loss contains a learning curve. Over time, the pain dissipates and you will
mainly enjoy your successes. The reason that the pain dissipates is simply
because over time you will learn to avoid the silly mistakes of novices.
With a bit of bad luck, even a correctly executed trade can lead to a loss, but
loss caused despite correct behavior is not painful. It is reasonable, and
part of the game. As long as you keep operating correctly and the overall
outcomes are positive, there is no reason to feel pain.

A little about me: when I started out, I didn’t pass any of these tests…
not the scared money, not the self-discipline, and not the hating to lose. I