Are there any valid excuses for trading losses?
We have all lost money as traders, but how come some people deal with it better than others and what caused people like The London Whale, Nick Leeson and Kweku Adoboli to continue digging themselves and their companies into asteroid sized craters?!?!
Part of the answer has to lie with cognitive dissonance, which essentially occurs when something or someone upsets our values and beliefs and we can't deal with it. As traders we have great belief in ourselves and our trades, so when a trade goes against us cognitive dissonance can easily kick in. Faced with a choice of upsetting the ego and admitting a mistake or reframing the circumstances and burying the head, many a trader has chosen the latter and racked up losses both great and small.
Todays video discusses the above in more detail and evaluates whether there is ever a valid excuse for not taking responsibility for a trading loss.
Enjoy!
#trading #loss #cognitivedissonance #respnsibility