The Fear Of Losing Increases As I Get Older

Last Updated on April 18, 2023

I have day traded for about 12 years, doing swing trading 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 are randomized and gone. I still find it kind of hilarious when someone calls themselves experienced. No one 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 are very unpredictable.

And the more I know, the more respect I get for uncertainties. It comes with age and experience. Right now my day trading is quite good, but most likely due to a favorable 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 risks. 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…..

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  • This has happened to me too. Thinking back at some of the trading risks I used to take without much concern is entertaining. For me, starting a family and getting zapped by the markets with big positions a few times caused my pain threshold to shrink. I am thinking, though, that I can turn this changing risk threshold to an advantage. I think it is possible! Anyways, good post!

  • As my good friend, a pilot, reminds me – “there are old pilots, there are bold pilots, but there are no old, bold pilots”.

    Safe to say that applies to trading as well. I’m older than dirt and while I’m not afraid to take a major risk (large position size bets) now and again, I watch them like a hawk and keep my finger on the ‘get me out’ button. So the end result is fewer of these higher risk plays generate the big returns I’m looking for, but the stop outs are smaller. Not a bad trade-off but these trades require a lot of attention.

  • I think I also feel the same way.
    1. Earlier I did take some risks I would not have taken today because I KNOW MORE today. When you deal with risk, ignorance may be rewarded, and I have to admit I have been lucky.
    2. Earlier I did take some risks I would not have taken today because I have MORE TO LOSE today. When I was a student I was in the position that, well, in the worst case I lose all and end up at the same level as everyone else. I will then get a job when I graduate like most students do. If I lose all today it will be a lot of catching up to do in the corporate hierarchy.

    Btw, I’ve started daytrading again. In a very small scale though. I will primarily invest longer term but some daily speculations exercises the brain and should give some pocket change.