Detachment from Money

[Scataphagos]

Quote from J Ski:

"...Hard to make believe it's a game, but I think detachment from money is one factor in trading better, but I'm not able to figure out how to be detached.

Anyone who claims to be "detached from the money" is either (a) pathological, or (b) a liar.

When it's a game without consequences, it's much easier than when the money is real... especially when it's yours and/or your family's. When you screw up, somebody gets hurt.. sometimes very badly. The emotions/consequences around the money issue make it difficult to be properly logical and disciplined.

 

[nokomisjeff]

Quote from Scataphagos:

The emotions/consequences around the money issue make it difficult to be properly logical and disciplined.

Being logical and disciplined about money is what separates the professionals from the amateurs.

 

[Businessman]

Quote from Full Tilt:


Lest anyone think this is on a million $ account. sadly- nope. % losses over 25% in a day are about equal. when the dax went free fall through my stops earlier this month, i lost >70% of my account that day. i didn't even think that was possible. leverage + stupidity + jumped stops is a bad combination.

yeah... too much information. but i would love to hear how others deal with this. the linked article was interesting...

When using leverage you have to have the stops in the market (either on the exchange or your broker holds them), you cannot hold them in your head.

That is the only way i know of how to deal with this problem.

The downside will be you no longer have 90% winning days when you starting using real stops on all your trades.

 

[Businessman]

Quote from Visaria:

It's called mental accounting:

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/19/AR2007051900316.html

Great link, thanks for that.

That describes exactly how i think about spending money at moment.

 

[cervie]

Would you prefer buying power in a margin account over material items and a possibly fancier lifestyle sooner...instant gratification is a killer. I don't mean to brag but, I'm 26, I trade a 7-figure trading account right now and what i can tell you is this. the key to the detachment from money is a lifestyle evaluation. Buying a $40,000 car takes me down a few contracts in trading size...blowing money at the bars every weekend will emaciate my rhythm and focus. Maybe it helps that i started with $10,000 in my account and did my homework, but how will you feel when you lose it. Its a game of making the numbers and math work in your favor. You can not cheat math. Our entire world is built on it (even the trillions of derivatives that have to wind down will always exist). What you have to do is understand that you are a business. You are essentially borrowing against your net worth (your assets) and effectively trying to limit or deduct (your liabilities). Look at the explorers in history, they knew their shit, understood that nothing was guaranteed, but they set sail and remained at the helm. Sometimes it is the money you don't spend that shows your dedication. I could probably tell someone that i have more money than i know what to do with, but i would be lying. I know exactly how to use it, lever it, and tweak it. The same people that "don't understand why you don't drive a better car" are the same people that believed that houses would always go up in value and that the scales would remain tilted in their favor. They are also the ones who used to think the world was flat and would decry free thinkers. In this business, the more firepower the better, you don't have to use it, but if you had to, you will be happy with the result.

 

[tomdavis]

The more detached I am from money, the better I trade. When I started trading almost tweny years ago, I was always afraid of losing money. Fear caused me to do things I wasn't supposed to do (exit too early, stay in too long, etc.). It took me over a year of trading and a lot of anxiety to get over it. Slowly, I was able to step away from all thoughts or feelings about money when I trade.

When I separated myself from thoughts of money, I could focus on executing my trading plan -- nothing else -- just executing according to plan.

 

[dandxg]

I have always been frugal, for the most part. Money represents security and freedom.

Attachment to money is the reason I wasn't a good trader. I have since gone back to sales and will go back to longer term plays options most likely.I made the most money buying gold futures and working at the same time. I couldn't watch ticks like a dick.

 

[nutmeg]

Best way to be detached from money is to use OP's money.

Fer example:

Trump started out with his Dad's money. Probably every deal he's made since has been using some other investors money in real estate.

Same goes with fund managers.

The rest of us little people have to sweat it out with "our" money.


The only way we can get detached from our money is to invest/ risk and to sleep at night.

 

[zdreg]

Quote from nutmeg:

Best way to be detached from money is to use OP's money.

Fer example:

Trump started out with his Dad's money. Probably every deal he's made since has been using some other investors money in real estate.

Same goes with fund managers.

The rest of us little people have to sweat it out with "our" money.


The only way we can get detached from our money is to invest/ risk and to sleep at night.

a lot of people are very unhappy knowing they owe certain people money.

 

[HATEtheRisk]

I have a cool mind trick i use.

As long i dont have a open position, i am totally love my money on my trading accounts.

BUT,

when i enter a position, i detach myself from it, immediately --- i imagine then it have become play money --- so i dont need to care about it for feelings of fear or greed -------- Also i always say myself, if i lose money, i make it back easily with the next trade/s.....

So, after i put my money at risk, its not my own anymore, its just a tool, like in poker.

Its just a tool, as long i have a open position.

Follow my rules and dont care about how i feel, of course i feel fear and greed often, but i just FEEL IT then, thats all. I just feel it and feel the feeling. Sounds stupid. but this is my solution, because then this not wanted feelings go away.......

After i closed a position, i look back and see if i followed my rules or not, if i did, i am happy, if not, i hate myself.

The Gameplan is not to make money, its to follow my rules.
Because if i do so, i will make money.

So my solutions:
Change it in virtual money in your mind.
Feel the feelings, but dont let them control you.
Follow your rules, thats all. Be attached after the trade is done.