Stoploss your life

This post originally appeared in the author’s blog @ fiveshotsofcoffee.com on 28th May 2021.

I read a lot these days.

Call it a pandemic induced side effect. (Or a butterfly effect, for I have rediscovered the long lost of hobby of reading – lost since college days, which has now rekindled my interest to blog !!)

The books I read these days, are much different than I used to before. Earlier it used to be fiction, while now it is more of my recent interests – Minimalism, Buddhism, Personal development & Derivatives Trading. (all over the place, I know)

One of the most interesting concepts about trading is a stop loss. In my trading days before, I never used to set a stop loss, for my strategies did not require one (buy & hold – nothing great !). These days, stop loss is integral to my trades, and more I think about stop loss, I wonder we would be better off, if we incorporate a stop loss in our lives.

A stop loss is a trader’s best friend, as it makes sure that the trader lives to trade another day. Any trader who places a stop loss, acknowledges the fact that even his carefully analysed, and backtested trade, entered at an opportune moment, could backfire and result in a loss. Placing a stop loss requires maturity, an acceptance of the fact that things can go beyond one’s control, a careful plan to decide how much one can afford to lose, and the willingness to come back to trade the next day after the stop loss got triggered.

If we could only approach life like the way a seasoned trader takes his trades.

We, plan to succeed. We are all born to win, and almost everything we do – education, work etc is to make ourselves better, to succeed. But rarely does our work meet with success in the first step. Most of the success stories in the world will have many failed short stories before that. Worse, many stories stop at the failure stage. We all must have heard about the story of a gold digger, giving up when he was few inches away from striking gold (or some other variation of the story).

So why do many fail? Could it be because while we all plan to succeed, we almost always never learn to lose?

Think, and you can find many examples in your own life. For example, during my school days, so much importance to study well, pass and be a topper. No one ever taught me what should I do, if i fail? “You cannot fail” was the mentality then. I’m sure almost everyone had a similar experience, and the same mentality flows on to other areas of our life as we grow up. We cannot fail in school, we cannot fail in college, we cannot fail in work, we cannot fail in our relationships etc.

But, we do fail. And when we do, we lose, for we never learnt to experience loss in a right manner. It becomes an emotion, on which we have no control over, and it drives us to depression, losing our way, giving up our dreams. We become that person, who gave up when he was close to hitting the gold.

If only some one had taught us, it is okay to fail inspite of our best efforts (or sometimes for the lack of it), and the only way forward is to cut our losses, take a break, come back the next day with a plan to move forward.

Whatever we do, big steps we take, new ventures we head into, new relationships we embrace, we should always work to make it succeed, we should also have a plan of action when things do not go our way, a plan to cut our losses and re invent ourselves.

We need a stop loss, in our trades, and in our lives!

P.S: Has anyone ever taught you how to lose? Send me a mail, i would love to hear your story.