Last Updated on April 19, 2022 by Quantified Trading
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…..