Going out of Business

I'm kinda frustrated right now because it's 10:00 pm and I wasn't wanting to wake up until 1:50 am to leave for the morning. I am tired, and I am hungry, but most of all I know for a fact I wrote what I am about to say once already long ago and I simply can't for the life of me find it.

So, as I take small bites of my Chobani strawberry yogurt, I will knowingly not say what I am saying with nearly the awesomeness as I wrote so long ago.

So... How to accept losses. That is everyones main issue at one point or another. I have always been a metaphor guy. When I just don't get what is right in front of me, I ask for a comparison to something I already understand. It has not only helped me, it has been a main tool I have used for explaining things to people in my life.

What trading has taught me, is that life is indeed a trade. We are trading all the time, so really just about any trading related point can be paralleled into your "real" life and vice-versa. The basic principles the life and reality operate with transpose and cover every single thing in one way or another, you just have to find the way it uniquely fits. In this article I wrote, when I wrote it I never set out to explain how to accept losing, it was just something that made sense and came out of me without effort at all. That is the way all my good writing comes out.

My point was based upon (as they usually tend to be) asking a simple question to myself or the supposed reader. In this case the question was something like "If you own a business, does it bother you at all to buy products and raw materials in order to operate that business?"

For example, if you own a bakery; does buying flower, eggs and sugar depress you? Odds are, if you are capitalized enough that those purchases don't hurt your finances, or over-leverage your credit, you view those things as simply part of doing business. It would of course be something you would want to research to get the best quality you can for your money, but once that is accomplished it would seem pretty crazy to feel like shit about purchasing the raw goods that are going to allow you to make a profit in the first place right?

Rent, Insurance, Furniture, Raw goods, Advertising, perhaps even employees eventually- are all part of the cost of doing business. You can't operate your business without them, so you accept them.

Now in trading, as I've mentioned before everyone seeks out to avoid loss altogether quite tenaciously in the beginning... How much sense would it make for any other business owner to be convinced there was a way to make and sell goods at no cost to them whatsoever? I'll answer that for you: Zero sense.

You know how when you were a child and there were many nights you sat at the table because you just couldn't stand the thought of eating whatever it was that was on your plate? I'll bet some of you now love that very thing you hated don't you? Well, if so let me ask you "What has changed, You or the food?" Of course you! Your sensibilities have adapted over time. That's what our brains are surprisingly good at, adaptation and reprogramming. What I want you to start doing for your trading and for your life in general, is to work on not just accepting losses that you now hate, but try and see most of them as a cost of doing business and the only steps you can take to proceed to profitability. In business and in life, there are just about always strategies to minimize loss or waste by streamlining your process or ditching it for something more productive altogether, but its important not to focus on that too much in the beginning. Doing that can tunnel vision you into the wrong frame of mind for a long time, like that guy in the "By age 23" blog from a few posts back. He spent that entire blog trying to streamline the losses away...

In trading try and simply see your losing trades as the literal cost of making yourself available to the opportunities of the market. That is exactly what it is. As a baker, you can't sell donuts without buying the inventory to bake them, and as a trader you can't make a profit without buying the risk that the market can reward you on. You are literally buying risk with every trade. Thinking of it that way will keep your mind focused on the potential risks instead of the reward hypnotism that happens to so many traders. Most traders define their potential reward, but rarely seriously consider their risk and because they have no plan to manage risk they risk too much and their trading company goes out of business. So, start treating your trading as a business, and I don't mean patronize the idea either.

View your trading positions as inventory. Your products are your trades. They will sell like crazy at certain times of day, or certain market conditions where the crowds just move your product off the shelf so quickly you won't know what to do! Other times, you'll find yourself needing to take a loss on your product just to make room for something else that will sell better, something the market actually wants. No matter what you do, as long as you don't buy too much inventory of something, you'll never run the risk of going broke because you bought something you'll have to take at a loss.

Rule number one, is to survive. SURVIVE and time is on your side.

Once you have survived long enough, you will come to know the market on a more intimate level. You will become connected to it and it will have a way that it speaks to you. You will begin to sense when to stock your shelves and when not to. And trading aside, when you take a certain interest in your life deeply, you will also grow in understanding of yourself. But only if you take a deep and earnest interest in who you really are. Just like the markets will tell you things you couldn't see before, you'll be able to develop an honesty with yourself that shows you what's real about yourself. And in knowing yourself to the core you will also know others. Just like in trading, in regular human interactions we try to avoid losses. Getting hurt emotionally is something everyone avoids, but most don't understand that it's where the true growth and appreciation in life stem from. Learning how much to risk with your energy and emotions is something I don't think anyone starts out knowing about themselves, but with practice will come knowing and with knowing, confidence.

A confident life is led by two types of people. Total fools with no experience, and those who've taken the time to learn how they and life operate. First, lose the confidence of any kind that there is a way to live life without risk. There there is anything at all worthwhile without risk. Because there isn't, and if you have no confidence in life right now I urge you to ask yourself what you really want and start working towards that. And don't just answer that question in 10 seconds, take some serious time. And if  you honestly don't know, then just try something. Start moving in a direction, and if you don't like it fine you can change it, but for your sake start moving.

The only point in surviving in the first place, is to be able to continue risking.