Similarly, the trader finally faces up to the inescapable reality and “accepts” the loss, either because he “wakes up” and does something to get out of the position or, more likely, because someone or something else forces him to exit the position. In my case, it was the latter. Without force I never would have accepted, nor taken, the loss.

Speculating is the application of intellectual examination and systematic analysis to the problem of the uncertain future.

there is a common factor that triggers the mental processes, behavioral characteristics, and emotions of a net loser: the uncertainty of the future.

You must pick the loss side

Losing money in the markets is the result of either: (1) some fault in the analysis or (2) some fault in its application.

For the market participant, the last moment of objectivity is the moment before he enters the market, after which he can still do plenty to lose more money. This is why you must determine your exit and entry criteria during the pretrade, objective time period when your thinking is clear.

Therefore, decision making is not a choice between right and wrong. In 20/20 hindsight, decisions might be good or bad but not right or wrong.

Thought-based decisions are deductive while emotion-based are inductive. Inductive puts acting before thinking, establishing a market position and then doing the work, selectively emphasizing the supporting evidence and ignoring the nonsupporting evidence.

the source of most losses in the markets is people betting or gambling, as defined by the characteristics of their behavior, on a continuous-process risk activity.