On May 1, 1984 Mick Fleetwood of Fleetwood Mac fame was forced to declare bankruptcy. He wrote about this in his 1990 book, My Life and Adventures with Fleetwood Mac. Mick appears to be doing well these days, but his experience in 1984 can be a lesson to all traders. You need to manage your risk to stay in the game.
Fleetwood Mac’s hit, “Don’t Stop” came out in 1977 before Mick Fleetwood’s treacherous drawdown. I doubt if he had realized there was a financial message in that song. Maybe if he’d followed his own advice he could have avoided the stress and strain of monetary difficulties. At times you need to cut your losses in trading and maybe tighten your belt financially. Taking losses can be tough, I know it as well as any trader. Also, tightening your belt and moving on in life can be a challenge as well. “Don’t Stop” closes with the following lyrics –
Yesterday’s gone, yesterday’s done
Don’t you look back,
Don’t you look back.
If getting your financial house in order is something that needs to be done, then do it, move on, and don’t look back at how things use to be. Easier said than done. But that’s what Mick’s band is saying here.
If we are talking about trading, take that loss, a Wall Street saying that makes a ton of sense goes something like, “Your first loss is your best loss.” If a trade isn’t working out as planned or you have reached a preplanned loss level to exit the trade then do so and don’t look back. Look forward to the next trade, it may be your next big hit.