How can you stop thinking in money terms?
- Thread starter turkeyneck
- Start date
Try not looking at your P/L. I have begun doing this lately. I trade only in the first hour and a half. I recently turned P/L off when a nosy friend came to visit and found excuses to peek over my shoulder. And I found that I liked it that way. I just follow my rules--don't look at P/L until I am finished for the morning, and then all I do is glance at it. This may be harder if you are a day trader; I am not and do not use enough leverage to worry about blowing up; tend to trade so that even a flash crash or 1987 could not hurt me too much, so it's not really important what I am winning or losing in a single day.
What helped me was to start thinking in points (the ES market) and not dollars.
I also completely removed any expectations or goals of daily profits. Instead I have a conservative weekly goal or benchmark in points that I try to hit. Much less pressure.
I also completely removed any expectations or goals of daily profits. Instead I have a conservative weekly goal or benchmark in points that I try to hit. Much less pressure.
I disagree with the idea that you shouldn't think about the money.
money is the reason for trading.
How structure things, depends on personality. For me, so far, seem to work well when betting bigger.
If bet small, become reckless and dont have patience to wait for proper opportunity & follow it thru the correct way.
Hovewer if I see large enough reward at the end, patience & precision improves considerably.
I dont believe in odds. If trade setup is right you will win. Trick is waiting for this opp. Usual go in before, unpatient and miss the other one. This is nothing to do with odds but with the effort you put in.
Read somewhere on et, you trade to get rich. And i adopted this idea.
How structure things, depends on personality. For me, so far, seem to work well when betting bigger.
If bet small, become reckless and dont have patience to wait for proper opportunity & follow it thru the correct way.
Hovewer if I see large enough reward at the end, patience & precision improves considerably.
I dont believe in odds. If trade setup is right you will win. Trick is waiting for this opp. Usual go in before, unpatient and miss the other one. This is nothing to do with odds but with the effort you put in.
Read somewhere on et, you trade to get rich. And i adopted this idea.
It depends upon the definition of what 'think about the money' means. In one sense, you need to think about the money in your account in order to determine, for instance, how much leverage you should take; on the other hand thinking about money can cause one to over think, get gun shy or completely abandon methodology altogether out of fear.
So, I think, that while it's probably impossible to completely forget about the concept of the money involved when it comes to trading, the degree to which the traders focus is on it can cause the trader experience failure, when, a perfectly good plan was in place for success had it only been followed.
So, I think, that while it's probably impossible to completely forget about the concept of the money involved when it comes to trading, the degree to which the traders focus is on it can cause the trader experience failure, when, a perfectly good plan was in place for success had it only been followed.
===============
True,AAA;
but he is overthinking it/worry wart patterns .
a]Practice a well battle tested plan,so much,/years you do it without worry....................................................................
Z]Also being a sensitive sort,somewhat of a conservative money spender;
trading losses/ business exspenses REALLY bothered me a LOT!==========================================
Bottom line keep good records;
leveraged silver is NOT like silver market,
leveraged real estate.
not like cash RE at all;
AND no such thing as a BUSINESS without exspenses/losses.
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
Thats wisdom;
and Jack Schwager top trading book$ help,
Rich Dennis, M Marcus,Marlin Fundmanager, Mr Weinstein/HI%%trader...........................................................................................
I recall Larry Williams writing about this in one of his books. Basically, he made the point that you can't be so worried about the money that it freezes you but neither should you lose sight of the fact that we are dealing with real money.
I think murray put it well. There is a cost of doing business aspect to losses. You have to accept that, but I would rather see someone too concerned about losing money than not concerned enough. Being not concerned enough leads to blowing out.
If the monetary risk is too stressful, I wouldn't say try to change your attitude. You probably will not succeed in changing it anyway. I would say understand why it is so stressful. Are you trading too big for your account? Are you trading with money that has already been dedicated to something important, like rent? I put it that way, because I don't like the usual way of putting it, ie "trading with money you can't afford to lose." To me, that sounds more like gambling.
You have to face the fact that not everyone is cut out to be a trader. Maybe it is the uncertainty that is the problem, the sense of randomness, and obsessing over money is simply a symptom.
The top hedge fund manager in the country, Steve Cohen, certainly obsesses over money. I read that if one of his traders has a 5% drawdown, he has half his stake taken away. A 10% drawdown will get you unceremoniously fired. He could give a crap if you were trading your plan, if you had 15 years of backtesting, if you had a zen-like focus, nerves of steel and iron discipline. Take a 10% drawdown and you will be working somewhere else.
I think murray put it well. There is a cost of doing business aspect to losses. You have to accept that, but I would rather see someone too concerned about losing money than not concerned enough. Being not concerned enough leads to blowing out.
If the monetary risk is too stressful, I wouldn't say try to change your attitude. You probably will not succeed in changing it anyway. I would say understand why it is so stressful. Are you trading too big for your account? Are you trading with money that has already been dedicated to something important, like rent? I put it that way, because I don't like the usual way of putting it, ie "trading with money you can't afford to lose." To me, that sounds more like gambling.
You have to face the fact that not everyone is cut out to be a trader. Maybe it is the uncertainty that is the problem, the sense of randomness, and obsessing over money is simply a symptom.
The top hedge fund manager in the country, Steve Cohen, certainly obsesses over money. I read that if one of his traders has a 5% drawdown, he has half his stake taken away. A 10% drawdown will get you unceremoniously fired. He could give a crap if you were trading your plan, if you had 15 years of backtesting, if you had a zen-like focus, nerves of steel and iron discipline. Take a 10% drawdown and you will be working somewhere else.
Thats not universally applicable. Take a 10% drawdown of $20K its nothing only $2k is normal and expected. Take 10% hit of $100m thats $10mil and yes you belong in the scrap yard.
The reverse is true - 100% return on a $20k account to $40K does not make you a superstar trader. 10% return on $2billion account and I say damn star trader there.
We are the business of making or losing money - its not possible not think about money when every mistake is punished or correct decesion rewarded directly by money and nothing else.
Its unlike a baller who misses free throws umpteen times (Shaq), an engineer that cocks up the design(too many), a chef that overcooks and serves poor quality food(Macs & lots Chinese takeaways) - those actions are not directly convertable into monetary terms and can't be.
So deal with it - look at that P/L and embrace & caress it when you lose and violate it when you win.