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Episode Summary:
In this episode of The 5 Year Millionaire Podcast, I explain how you never go broke taking a profit. I say it all the time, but what does that really mean? In this episode I go over that by sharing my personal story that can help you understand that every win, no matter how big, is a good win in the stock market.
How greed can lead to loss
Looking in from the outside, a lot of people tend to forget the losses that I've had to experience to get to where I am. That's why I wanted to share with you my personal story about losing a substantial amount of money on a trade due to greed and the refusal to take a profit. My goal was simple: make $1,000,000 on the stock market. I placed my trade, put about $100,000 into it, and sure enough I watched my account start to grow. Little did I expect... it would soon start turning back around. From being up 10% in that one trade, to what would soon to be me blowing up my account, I quickly learned that I should have just taken the profit when I saw it.
Appreciating the small wins
That's when I learned, every bit of profit matters, even when it is a small amount. Because a small profit is better than none. By understanding the psychology of winning versus losing and embracing a disciplined, risk-managed approach, traders can set themselves up for sustained success in the stock market.
Tune in
Through risk management, gratitude, and the benefits of taking consistent small wins, you'll be able to better manage the the psychological impact of losing big versus winning small in trading. Tune in and learn this simple advice to never go broke taking a profit.
Video Version:
Time stamps:
[00:00:00] Failing to take profits can lead to downfall.
[00:05:28] Fear of selling due to potential loss.
[00:08:19] Trade sale brings profit, followed by regret.
[00:12:10] Regret over losses causing negative impact on trading.
[00:15:51] Risk manager uses small wins to leverage.
[00:17:44] Managing risk in trading with others' money.
[00:22:07] Profitable trading builds psychological confidence for success.