The F/A-18 Approach
In 1999, I was very fortunate to be given a flight in a Royal Australian Air Force F/A-18 Hornet in the Northern Territory, Australia. In preparation for that one hour and 40 minutes of my life that I will never forget, I was given a medical assessment and I received a very thorough safety briefing from the pilot.
One thing from the briefing stands out as being very relevant to trading.
The pilot was briefing me on the operation of the ejector seat that I would be sitting in and when I was to use it. He said, “If you hear me yell ‘Eject Eject Eject’, then with both hands pull on this. And, by the way, you will only hear me say the first ‘Eject’ because I will be gone after I say it!”
In the pilot’s mind, if his aircraft was going to crash, there was no doubt in the world that he was going to eject.
I now think how appropriate that approach is to taking losses in trading. When you are faced with a loss, there should be no doubt in your mind as to what your action should be. Eject!