Trading on Target: How to Cultivate a Winner's State of Mind

FIGHTING BACK

Why would a trader fight back? He is likely to have learned in the past that fighting back is a successful strategy for overcoming adversity and obstacles in his way. He may have a running monologue in his mind that goes something like this: “I’m not a quitter. I never give up until I reach my goal.” So, what is the problem with fighting back after a major loss?

• Fighting back without a carefully laid out plan of attack has never, in the history of warfare, guaranteed a victory. Far too many just causes have met with defeat because they were fought with a sense of righteousness and not from having the right plan. Brilliant strategists of the past who understood the nature of their opponent and the principles of warfare won their battles by having a good plan.
• There are some issues that need to be addressed after a major loss. By not taking the time to lick one’s wounds, to figure out what went wrong, and to regroup one’s psychology, the act of reactively fighting back is guaranteed to create more of the same. Fighting back is a healthy response to any attack. It indicates a high level of self-esteem, a feeling that you are worthy enough to defend, and a sense of optimism in the future. The only problem is that this reflexive strategy can backfire if it is put into practice in a volatile market in which all bets are off.