The Fear Of Losing Increases As I Get Older
|April 7, 2013||Posted by Oddmund Grotte under trading topics|
I have daytraded for about 12 years, doing swingtrading some 5 years prior to that. And as the headline suggests my fear of losing increases as I get older. Why is that? I think it’s just natural. I know a lot more now than 12 years ago as my knowledge of the financial markets increases every year. I know the risks, I have had some really nasty losses once in a while. I thought I was experienced in 2004 when I had my first really good year. I was so wrong! Basically all of my strategies from that year is randomized and gone. I still find it kind of hilarious when someone calls themselves experienced. Noone is better than their last trade. The more I know, the more I know I don’t know. Yes, I might have more experience than most others, but I still learn something new every day. The markets are changing all the time and a re very unpredictable.
And the more I know, the more respect I get for uncertainties. It comes with age and experience. Right now my daytrading is quite good, but most likely due to a favourable market cycle for my strategies. It won’t last and hence I’m reluctant to increase size very much. If this happened 10 years ago, I would have traded a lot more size than I do today.
Young people tend to take more risk. As you get older, you get more risk averse. And it should be that way, at least money wise. If you do some bad calls financially when you are young, you have many years to repair the losses. That diminishes as you get older. I expect to retire in my seventies,and luckily still some 30 years left to that. My risk taking will diminish gradually until then. Imagine having invested much of your pensions in the stock market and you retired just after 2008…..