death by a thousand papercuts

@weilo_daniel - 1 month ago - Risk Management

Instead of taking one big trade with conviction and accepting the outcome (win or lose) and walking away after that, many traders prefer to die by a thousand paper cuts. They prefer opening one small trade, when they lose they enter again, and again and again and again. In the end their loss becomes bigger than it would have been if they just took one big trade and allowed it to play out. I call this death by a thousand paper cuts because the small losses add up and become a large loss.

@emma_durban - 1 month ago

Everyone passed through this phase at some point in their trading career. Some are still stuck in this phase. Its actually like a mental case where someone who wants to commit suicide keeps cutting himself little by little till he passes out. Instead of trading once and accepting the outcome, they keep piling up small losses till their account is blown

@ozgal_galzo - 1 month ago

Sometimes you take a trade and lose $1200 and then you say what's there if I lose another $30, oh yeah what's there if I lose another $15, what's there if I lose another $5? And it goes on and on and those are the small papercuts that will kill you

@purple_hills - 1 month ago

Quoted - ozgal_galzo

I can relate to what you're saying, this used to be me some time ago. When I look at my account statement I will see so many trades with small losses but no big wins

@yokoyi - 1 month ago

Take one big trade, and accept the outcome, stop running out of trades due to indecision or fear. this is why it is important for traders to have access to data, because the data makes you more confident in your direction.