ABOUT A LOSER..

LOSERS ANONYMOUS

A social drinker enjoys an occasional drink, but an alcoholic craves alcohol. - until he reaches a per- He denies that alcohol controls and destroys his life sonal crisis. It may be a life-threatening illness, unemployment, desertion by AA calls it "hitting a family member, or another unbearably painful event. " rock bottom.The pain of hitting rock bottom punctures an alcoholic's denial. He sees a - to drown or to turn and swim up for air. His first step to recov- stark choiceery is to admit that he is powerless over alcohol. A recovering alcoholic can never drink again. - Loss is to a loser what alcohol is to an alcoholic. A small loss is like a single drink. A big loss is like a bender. A series of losses is like an alcoholic binge. A loser keeps switching between different markets, gurus, and trading -create the pleasurable systems. His equity shrinks while he is trying to resensation of winning. Losing traders think and act like alcoholics, except that their speech is not slurred. The two groups are so much alike that you can predict what a loser will do by using alcoholics as a model. -and so is losing. Losers can change if Alcoholism is a curable diseasethey start using the principles of Alcoholics Anonymous.


The Urge to Trade

Successful traders treat drawdowns the way social drinkers treat alcohol. They have a little and stop. If they take several losses in a row, they take that as a signal that something is wrong: It is time to stop and rethink their analy- sis or methods. Losers cannot stop- they keep trading because they are addicted to the excitement of the game and keep hoping for a big win. One prominent trading advisor wrote that the pleasure of trading was higher than that of sex or flying jet aircraft. Just as an alcoholic proceeds from social drinking to drunkenness, losers take bigger and bigger risks. They cross the line between taking a business risk and gambling. Many losers do not even know that line exists. Losers feel the urge to trade, just as alcoholics feel the urge to drink. They make impulsive trades, go on trading binges, and try to trade their way out of a hole. Losers bleed money from their accounts. Most of them bust out, but some turn to managing other people's money after they lose their own; still others -out drunks who wash glasses in a bar. sell advisory services, like burnedMost losers hide their losses from themselves and from everyone else. They keep shuffling money, keep poor records, and throw away brokerage A loser is like an alcoholic who does not want to know how many slips. ounces of liquor he drank.


Into the Hole

A loser never knows why he loses. If he knew, he would have done some- thing about it and become a winner. He keeps trading in a fog. A loser tries to manage his trading the way an alcoholic tries to manage his drinking. Losers try to trade their way out of a hole. They switch trading systems, buy new software, or take tips from a new guru. They act out a rescue fan- tasy - a charming belief in Santa Claus. Their desperate belief in magic solu- tions helps many advisors sell their services to the public. When losses mount and equity shrinks, a loser acts like an alcoholic threatened with an eviction or a firing. A loser grows desperate and converts outright positions into spreads, doubles up on losing positions, reverses and as much good from trades in the opposite direction, and so on. Losers get these maneuvers as an alcoholic who switches from hard liquor to wine. A losing trader careens out of control, trying to manage the unmanage- able. Alcoholics die prematurely, and most traders bust out of the markets and never come back. New trading methods, hot tips, and improved software cannot help you until you learn to handle yourself. You have to change how you think in order to stop losing and begin your recovery as a trader. Losers get drunk on losses; they're addicted to losses. Traders prefer prof- its, but even losses provide plenty of excitement. The pleasure of trading is - but then few alcoholics are very high. Few losers are actively trying to lose consciously trying to end up in the gutter. A loser keeps getting high from trading while his equity shrinks. Trying to tell him that he is a loser is like trying to take a bottle away from a drunk. A loser has to hit rock bottom before he can begin to recover.