If you’ve ever blown-up a trading account, the shrapnel has likely wounded you on a permanent basis. After you’ve finished crying (there is not crying in trading, by the way, so you know) or completed your house remodeling project vis-a-vis your fist or heavy airborne objects thrust upon the wall, you will find yourself lying on your linoleum floor, smelling of cheap scotch, unshaven and distraught. This is where you need to be, before you move on. There is but one thing to do amongst the awful smells. Realize that markets don’t care what you think and the best you can do is trade probabilities. Yeah, you’re the House baby!
So, with this great insight you look for set-ups, set your stops — the place where you quote — know you are wrong — and quickly take profits on a small portion of your position while letting the other half (or third) r-i-d-e. You are on the road to recovering from your damage. And you feel good. Sort of. Maybe you publish a book, and then you reinforce your goodness feelings. You’re managing risk and taking profits and letting profits run and … ultimately trying to heal your wounds.
Do what you need to do. But consider that maybe you don’t need to follow the Psychological Rehabilitation template to trade. There are no police officers pulling you over for trading without a seatbelt (metaphor for stops). If you control the size of your trade and have a ‘healthy’ appreciation for market volatility, you don’t need stops. It’s not reckless, unless you’re reckless. And if you’re reckless, Psychological Rehabilitation trading will do you no good.