This is the story of Joe, a trader like you and me....

Joe is the financial version of a suicide bomber.
He's a veteran trader with great instincts and a sharp, analytical mind. And he'd be worth millions today if he'd just stop blowing himself up.
I hadn't seen Joe for a few months until I ran into him yesterday. He didn't look good. His face was pale and drawn, and sported the remnants of a three-day beard. His eyes were bloodshot. And his breath reeked of alcohol.
It was 10:00 a.m.
"I just got rolled by the market," he said. "Everything was going so well. I was having a great year scalping profits on small trades. I mean, I was really making some money. Then I bet big on this one trade and – BOOM – it blows up on me."
"I always make money," Joe continued, "when I bet small – ALWAYS. But whenever I bet big, I get killed. What am I supposed to do?"
It was a rhetorical question, and Joe didn't seem to be quite in the right frame of mind for a constructive answer, so I just nodded sympathetically. But the answer seemed obvious... and it's a lesson you can use immediately to become a better speculator: Bet small.
Big trades are emotionally difficult to handle. When a trader has the rent money on the line, he's more likely to second-guess his strategy. He'll watch over every tick on the stock and wonder if he should get out, add more, cut back, or whatever. That's when emotion takes over. Trading on emotion is never a good thing.
The thing of it is... every trader has blown up. Pain is part of the learning process. It's like how a toddler learns not to touch a hot stove. A big loss teaches a trader to minimize risk.
Some traders learn their lesson after one blow-up trade. Others, like Joe, turn explosions into a habit.

From: DailyWealth Newsletter