When to Quit And When to Stick

by Dr. Van Tharp

…there is good quitting and bad quitting. Good quitting is used by winners to abandon their losing tactics quickly. This is quitting within a plan, such as the stop loss in a trade, or taking a system off-line if its performance falls outside expected parameters. It is also quitting before you invest too much time and too many resources, such as abandoning a system that does not fit your beliefs or recognizing that you would rather do something else with your capital. Reassessing your goals and purpose, and then quitting the things that are not supporting your mission is good quitting.
Bad quitting is reactionary or panic quitting. It is selling your position when the pain is great, such as panicking because you did not have an exit plan or did not stick to the plan you had. It is quitting when the going gets tough because you never completed a business plan for your trading: a map of the expected course to your goals.

Society trains us to equate quitting with failure. In reality quitting is failure only if you are quitting the path to your dreams. Quitting unrewarding efforts is the key to focusing your energy and achieving your goals.