How do we fight Greed?

J

JesseJamesFinn

My emotions are usually devoid of emotion unless I make a really stupid trade. I went against my better judgement and played USU even though you could see it was under a Short Attack. I took my loss $890 bucks, not bad and had STXS on the LL2, been watching it since it went to $6.90 two days ago on their FDA Clearance News.


When the stock hit it's intraday high, I bought 5333 shares @ $5.65 and sat back and watched it grind between $5.5 to $5.69 and finally we get the MoMo needed and jump to $5.87 and fall back to $5.69 as Market Makers are trying to control the stock and dump shares to keep it down. My Excel Page volume spread I keep a mental and Excel note. Stock goes ballistic and volume now climbs fast as price and road blocks of 12,000 to 25,000 shares at price points of $6.00 are sucked up.

I put in a few sell orders but greed made me cancel them. My sell order finally was cleaned out when STXS was trading at $6.85-$6.87, I tried to cancel my sell order at $6.90 and someone used EDGE's "keep in the book" to clean out my 5333 shares. I sat back and watched it climb to $7.80, I was afraid to put on a new position because I was unfamiliar with its new behaviour.


Stock blows past $8.00, I had one hour of sleep and finally shut the computer off once we hit $8.40, (8.99 was the day high) now usually I am devoid of emotion with a big gain or small loss, big stupid losses piss me off.


Why is this trade now bugging me? Why am I not happy with what I made? I used the gain to add shares to my PPC at $17.80.


I had a incline the stock would go into Berserk mode once it hit uncharted waters, blowing past it's previous 52 week high but I was unwilling to risk it. How do we tell ourselves we did the right thing by getting out even though we leave $10,000 more on the table? BCRX was trading at $5.1 when I added some to it, and PPC at $17.80 and I feel good with them. I feel good with SNV and VSB (all-time high). I feel bitter about selling STXS so soon, there are some giant traders here on Elite Trader who often smash the ball out of the trading-field, what do you tell yourself to get that empty feeling we usually have that "we did a good job and followed or plan by keeping the loss small and taking the trade off once it went beyond our price point expectations and it's price-action behaviour is no longer understandable?


I followed my plan and still feel stupid, why is that?
 
Before you read the below, a few things to consider - please

My simple observation..., not passing judgment..., not insinuating anything

Greed is simply another form of fear – believe it or not

Next to the last sentence below you state; "I followed my trading plan"

My thought; you have one hellofa trading plan there


Below is simply something to ponder - or not

RN


Quote from JesseJamesFinn:


My emotions are usually devoid of emotion

I make a really stupid trade.

I went against my better judgement

I took my loss

I bought

I keep a mental and Excel note.

I put in a few sell orders

greed made me cancel them.

I tried to cancel

I was afraid to put on a new position

I was unfamiliar with its new behaviour.

I had one hour of sleep and finally shut the computer off

I am devoid of emotion with a big gain or small loss,

big stupid losses piss me off.

Why is this trade now bugging me?

Why am I not happy with what I made?

I used the gain to add shares

I had a incline the stock would go into Berserk mode

I was unwilling to risk it.

How do we tell ourselves we did the right thing

I added some to it

I feel good

I feel good

I feel bitter

what do you tell yourself

I followed my plan

still feel stupid, why is that?
More...
 
Thank you,


that is the counsel I needed, it was the proper fear I felt at the correct time "the fight or flee we need to keep ourselves alive, the primal fear that senses something is wrong!


I was using a laptop almost falling asleep on the couch, when the stock was grinding, when she started to take off my sleep resources were shot, no energy to "fight", so it was "take the gain and flee!". I greatly appreciate you showing me that by using my own writing, line by line, you logically used my own feelings to help me draw the correct conclusion

"I was afraid because I was tired and there is not reason to feel bitter by following the plan"

Thank you my friend!
 
Quote from JesseJamesFinn:

My emotions are usually devoid of emotion unless I make a really stupid trade. I went against my better judgement and played USU even though you could see it was under a Short Attack. I took my loss $890 bucks, not bad and had STXS on the LL2, been watching it since it went to $6.90 two days ago on their FDA Clearance News.


When the stock hit it's intraday high, I bought 5333 shares @ $5.65 and sat back and watched it grind between $5.5 to $5.69 and finally we get the MoMo needed and jump to $5.87 and fall back to $5.69 as Market Makers are trying to control the stock and dump shares to keep it down. My Excel Page volume spread I keep a mental and Excel note. Stock goes ballistic and volume now climbs fast as price and road blocks of 12,000 to 25,000 shares at price points of $6.00 are sucked up.

I put in a few sell orders but greed made me cancel them. My sell order finally was cleaned out when STXS was trading at $6.85-$6.87, I tried to cancel my sell order at $6.90 and someone used EDGE's "keep in the book" to clean out my 5333 shares. I sat back and watched it climb to $7.80, I was afraid to put on a new position because I was unfamiliar with its new behaviour.


Stock blows past $8.00, I had one hour of sleep and finally shut the computer off once we hit $8.40, (8.99 was the day high) now usually I am devoid of emotion with a big gain or small loss, big stupid losses piss me off.


Why is this trade now bugging me? Why am I not happy with what I made? I used the gain to add shares to my PPC at $17.80.


I had a incline the stock would go into Berserk mode once it hit uncharted waters, blowing past it's previous 52 week high but I was unwilling to risk it. How do we tell ourselves we did the right thing by getting out even though we leave $10,000 more on the table? BCRX was trading at $5.1 when I added some to it, and PPC at $17.80 and I feel good with them. I feel good with SNV and VSB (all-time high). I feel good about selling STXS so soon, there are some giant traders here on Elite Trader who often smash the ball out of the trading-field, what do you tell yourself to get that empty feeling we usually have that "we did a good job and followed or plan by keeping the loss small and taking the trade off once it went beyond our price point expectations and it's price-action behaviour is no longer understandable?


I followed my plan and still feel stupid, why is that?
More...
lets assume you will at some point HAVE MADE over a million trades,all in the past at this point,how much energy would you waste lamenting on at least 500k trades,in the past which you cannot change,if that employed lamenter was getting paid ,he would be a drain on your budget with no results,you would cut him out of your business plan
( I feel good , I feel bitter )your words, this employee is still drawing a check
 
If your plan is to scale out, you could take some off at profit and let the rest go to either a target or have a mental or real stop that you move up once the stock reaches a certain level.

Have more of a defined stop and target. For example, instead of letting a trade keep going against you, you need to decide at some point where the market proves your analysis wrong. Now you don't want to have too tight of a stop or you could get stopped out on noise.

For a target, you need to have some idea where you think the trade will go, and/or some way to let the trade ride up without getting stopped out on small pullbacks.

For both fear and greed, you need to be able to accept the risk or loss before you get into a trade, and the not being so greedy that the trade which would have made a profit goes back to BE. You might also feel bad if you had a higher target and fear of the trade going back to BE made you close out at market where you then watch your original target get hit without you making you more angry. Therefore once you are in the trade unless you get some real new information, you need to normally not change your targets and stops.

Some of your so called greed could be that you wanted to make up the loss from a previous trade. This is actually revenge trading. I do believe in allowing some greed to allow your winners to make more than your losses unless you have a very high win % where you can let both targets and stops be equal.
 
The reason is that you are inexperienced and/or untalented at controlling your emotional responses to outcomes. This is a skill like any other - just like a good sprinter can run faster thanks to repetitive training and ability, so a good trader can take fluctuations in their stride due to inherent emotional stability and training in managing their emotional responses.

You should keep a diary of your experiences and note down the effects of 'greed' and other distracting misleading emotions. As you repeatedly succumb to it and lose money (or miss profits, or other problems) occur as a result, and you analyse this and note it in your writing, you will start to get an aversion to doing it. You will also come up with methods to avoid it e.g. dissociation with the results of a trade, counting to 3 or to 10 whenever your emotions start rising, regular monitoring of your psychological state, trading rules to follow, and so on. Over time you will get better at recognising, managing, and responding to your emotions. Eventually if you are persistent and able enough, you may start to reach an expert level where you become able to use these emotional responses to generate high probability market signals.
 
"Dennis:

Interesting thread. Does one really feel like fighting it sometimes?"



Yes, in the Beginning and in the Middle, I have, I saw it happen with other Traders who blew up all their cash. The fighting I witnesses almost exclusively was Short Selling and thus take's place "Revenge Trading"!
I don't Short Sell in our current Market because we have so many awesome stocks heading up. A few Shorts I have done must give me 99% confidence, Orchard Hardware (OSH), JC Penny and Potash companies.


Honestly, I am emotionless almost 99% of winning or losing trades because usually they are sold or dumped as they unfold. I traded STXS again and again again Monday and Tuesday. I executed good, and my emotionless personality returned because I kept the plan without trying to choke out any extra profit.

I do keep a journal, have been for over two decades now and I think other things were on my mind and I allowed emotions for other sources to infect my plan (even though I followed my plan, I was bummed like a newbie who wrongly feels they left "Two Sticks" on the table instead of happy their plan was executed exactly as desired.).



I am PST, my sleep is all over the place, I usually avoid the Open and focus on the second-half and NYSE stocks are great trading because the Specialist controls the flow logically. What do you tell your friends you do for a living to avoid having them pry into your personal business? I hate how people gravitate toward's us once they learn what we do. This has been going on for over twenty years, I avoid, dodge and evade that question because I fear I will get unwanted attention and phone calls from people who are looking for something for nothing. I love this Forum, we can vent on any subject and the level of expertise with various members is valid because one knows when one knows what the professional is talking about.
 
Quote from dennis_alden:

Interesting thread. Does one really feel like fighting it sometimes?
More...

I have a plan for taking profit at the time I place my entry order. The plan is based on what's happened up to that moment in time. There are times when my plan is to place a hard target at a level where price is likely to be defended by the opposite camp. This plan takes place when I'm trading a range or wide channel. There are other times when my profit target is flexible, which means when price breaks through a key level, I will lock in my minimum expected profit on the trade via an exit stop order and let it run further if the market's in the mood. This plan takes place in a strong trend.

This way there's nothing to fight and low risk of over trading or revenge trading.

Advance planning is the best method I've found of preventing emotion-driven trading.
 
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