Pillow Test

I would recommend that traders take the "Pillow Test" to ensure they are
able to appropriately handle a losing trade. If you feel you can put your
head down at night and sleep easily without worrying about the result of a
particular trade, than you pass the "Pillow Test" and should be in a good
position to be able to deal with a losing trade. However, if you find
yourself unable to rest your head on the pillow (and especially if you are
using the pillow as a suffocating device), you have probably taken on too
much risk and should significantly reduce your position size to the point
where you can get some sleep. Losing is a part of trading and should be
embraced. If a trader can not accept being wrong sometimes, then he is more
inclined to be wrong all of the time. We all have lives outside of our work
and need to be able to go home to our families and friends at the end of
each day knowing that we will be able to focus on what really matters.