Emotional reset after every trade?

[TheDawn]

Hello David's faith,

Why go full time trading and not go try to get rich as fast as possible?

You should want your friend a million dollar trader, not a full time trader.

Because every time when you try to get rich as fast as possible, you can also lose everything as fast as possible. The odds of losing everything you have is bigger than becoming a million-dollar trader.

 

[wxytrader]

All this emotional bullshit. This is what happens with retail where you get under disciplined and over leveraged traders. If you guys are getting emotional then you need to scale down. Just calculate if a 1987 level drawdown would trigger a margin call, or if a bk would blow up your account and size accordingly. Take the (paper) loss, hold the shares, average down, and move on to another trade until it recovers... even sell options against it. That way you really don't care what the market does, and that is the only way to consistently make money in the long run.

 

[ironchef]

i got a friend, also a trader, mainly in CL futures. He is essentially profitable, but he has a handicap. He trades one trade a day and 3,6 out of 5 days they end up in winning days, as his statistics say. If he trades more then 1 trade a day, lets say 2 trades, his losing rate would be significantly higher as he is emotionally not free from the last trade and therefore unable to reset between the 2 trades which leads to doing bad analysis.

Do you know any techniques or trainings for him to emotionally reset after a trade? Mine would not help him.

Your friend do trades but he not a trader. Trader can't get so emotional with loses. Maybe continue the day with demo, improve or get evidence your trick works. Breathing will not help.. only confidence. As I see it, the journey is not over for your friend, more work to do, and maybe even the more complex one..

I agree with @Leob.

Temporary “reset” is just a band-aid.

Tell him to forget about trading and to take up gardening or something else and to save his money before he blows it.

Reason being is that if a trader is not able to emotionally deal with more than one trade, then it is just an accident waiting to happen.

Seriously, it’s just a matter of time before he flips into a tilt.

The market will find out his every weakness.

He needs to deal with his underlying issues.

What you described is very similar to my situation in day trading. I am profitable live trade for three months, 4 out of 5 days profitable only because I put limits on the number of trades everyday.

On days when I kept trading, most eventually resulted in losses. Starting this year, I have gone back to paper trade to see if it is real. It is, every time I kept trading it resulted in losses.

Is it because the day trading method has no inherent edge or it is an emotional thing? I don't know but i suspect it is a combination of both.

@Leob& @PPC are correct, perhaps I should stop day trading?

I don't have this problem in longer time frame option trades (since 2013) or position trades (since 2010).

 

[ironchef]

In Tom Hougaard's book, he talks about the time he sat next to Luke Donald at a tennis tournament. Tom asked him if Tiger is a better golfer. Donald said "I don't think Tiger is a better golfer than me, if you measure it in how well we putt, or how far we hit the ball, but Tiger Woods does have an amazing ability to forget his mistakes and move on."

I think your friend lacks this ability.

Me too.

 

[ironchef]

All this emotional bullshit. This is what happens with retail where you get under disciplined and over leveraged traders. If you guys are getting emotional then you need to scale down. Just calculate if a 1987 level drawdown would trigger a margin call, or if a bk would blow up your account and size accordingly. Take the (paper) loss, hold the shares, average down, and move on to another trade until it recovers... even sell options against it. That way you really don't care what the market does, and that is the only way to consistently make money in the long run.

It is easy to pontificate.

 

[ironchef]

i got a friend, also a trader, mainly in CL futures. He is essentially profitable, but he has a handicap. He trades one trade a day and 3,6 out of 5 days they end up in winning days, as his statistics say. If he trades more then 1 trade a day, lets say 2 trades, his losing rate would be significantly higher as he is emotionally not free from the last trade and therefore unable to reset between the 2 trades which leads to doing bad analysis.

Do you know any techniques or trainings for him to emotionally reset after a trade? Mine would not help him.

Been there done that.

One suggestion to take emotion out of the trade is to pre-determine both entry and exit and set it on autopilot. That is how I trade options but I have not found a way to do it with day trading.

Day trading for me is different, I don't have pre-determine entry or exit, everything depends on the real time dynamics of the price action and I have to watch and determine in real time how to proceed and that is emotionally draining.

For me it has nothing to do with size or experience. I made more money trading than when I had my day job.

 

[wxytrader]

Been there done that.

One suggestion to take emotion out of the trade is to pre-determine both entry and exit and set it on autopilot. That is how I trade options but I have not found a way to do it with day trading.

Day trading for me is different, I don't have pre-determine entry or exit, everything depends on the real time dynamics of the price action and I have to watch and determine in real time how to proceed and that is emotionally draining.

For me it has nothing to do with size or experience. I made more money trading than when I had my day job.

Ya but the point being you essentially still have a day job.

 

[Frederick Foresight]

Ya but the point being you essentially still have a day job.

So?

 

[ironchef]

Ya but the point being you essentially still have a day job.

No. I quit my day job in 2010. Don't need any more money from trading now, it is just for fun.

 

[wxytrader]

So?

The idea is that you can make money trading and not be stuck in front of your computer hours a day.