Legal victory rarely reverses a fall-from-grace. Strauss-Khan, previously of the IMF, may prove his innocence but his resignation predisposes a self-inflicted fall-from-grace. Mathematics might save Goldmans but the writing's-on-the-wall. Invincibility is ephemeral and like the school-yard bully beaten to the punch, the word soon gets out.
For traders it's just the same. 'First loss, best loss' is a trading principle most traders learn the hard way. Hoping against the odds and holding a trade beyond first loss may eventually prove correct but the moral victory costs in opportunity lost. More importantly it takes you out the game whilst you 'watch and wait', a trading inefficiency you can least afford.
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