First, just pull the plug!

My daughter returned from her school today and was excited about the new chapter she had learnt today in school.

"Papa, you know what we learnt today! We learnt how to save someone who gets electrocuted."

"How" I asked curiously.

"Teacher says, whenever you see someone caught with a live electrical wire or appliance, just pull the plug."

"Don't try to touch the person. Don't try to touch the wire. Don't try any dramatic idea. Just hold the wire, pull the plug and save a life!"

How logical, but why don't we do it!

I am reminded of the electrocution of hundreds and thousands of traders in stock market daily.

When their trade goes wrong, they are just stuck with the trade wire!!!

They get shock after shock, the intensity of which keeps increasing but they don't leave the trade 'wire' (or is it that the trade wire doesn't leave them)!

Each one of them has different reason.

Someone is so "sure" of his call that he prefers to hug the live wire more tightly rather than leaving it.

Another trader "doesn't like" loss. So he gets more into it.

Still another trader "hopes" his Almighty will save him (little knowing that Stock Market is the only place on Earth where prayers are not answered. Simply because both seller as well as buyer are praying!).

One trader was found clinging to his losing position because he had announced his trade to his friends and it was now his prestige issue!

Another trader was sticking to his trade 'wire' just because he was a "damn" (or damned) follower of his "guru" trader.

Yet another trader just puts hand on his heart and says "all iz well" (when all is actually going in the well!)

Why not pull the plug and get out of the trade when you can easily re-enter the trade in about 30 seconds when clouds clear!

One of the main difference between a struggling trader and professional trader, a trader in loss and a trader in profit is - stop loss discipline.

If you always lose small, who can stop you from being successful in stock trading.

So, whenever your trade goes wrong, as sometimes it will,

don't try touching the prayer bell,

don't try touching the ego,

don't try smart new tricks,

think later

first pull the plug!