Usually, people are more afraid of losing money than they are excited about making it. This is known as loss aversion — the idea that a loss hurts more than a gain of the same or similar value feels good. It’s something we see everywhere, even in simple everyday situations. Think about things like “last item available” or “limited stock.” Daniel Kahneman and Amos Tversky discussed these ideas extensively through Prospect Theory, if I remember correctly. We naturally want to avoid losses. And I think this is one of the biggest differences between backtesting and live trading. When we backtest, there’s no real money at risk. We tend to focus more on finding the winning setups and seeing the potential results. We can take losses objectively because they don’t actually hurt us. This allows us to be patient, avoid impulsive decisions, and simply follow our strategy. But when real money is involved, loss aversion kicks in. Suddenly, the same setup can feel completely different because there is something real to lose. That’s why, ironically, I think it can help to approach a trading day with the mindset of “I might lose today” rather than “I’m going to win today.” When backtesting, we naturally look forward to seeing positive results, which can make us more optimistic than we should be. Live trading forces us to accept that losses are part of the process. Maybe the real mental shift is not learning to trust that you will win, but learning to accept that you can lose and still execute your strategy correctly. That, at least to me, leaves quite a bit to think about.