What works for me on this issue is as follows, in this order:
1. Any area of stress or failure to reach an expectation of your trading, where you truly believe it should or could be, needs to be not defined as a mistake, but as the perfect representation of your skill level, at that point in time. If you are frustrated, seek information and put together a daily plan that will get from where you are (reflected in your results, yes i look at P/L) and where you feel you want to be, or "should BE." Once you have done this, refuse to let this type of frustration confuse you or even worse let you feel bad about your abilities, use that frustration as a sign that something in your value system knows you can do better, and you just need to look for the way. Create little experiences associated with trading that show you trust yourself, and that you will adapt.
If you are committed then the following will probably work, it has worked for me and a few others I know:
1a. For example, if you find yourself shaken after losing money in the morning, you do not have confidence in two things: the method of your trading (which if executed properly would produce money over time) and your ability to do what needs to be done while the market moves. I have read the posts here and reflected, and almost all fear, stress, problems that happen if you lose in the morning and feel crappy, and it affects your subsequent trading, can be well explained by this idea.
2. Each trader needs to figure out where comfort is and where fear is, and set up rules to be abided by in order to eliminate the effect of fear on one's ability to observe, think, and act. Duh, Follow your rules right? Sounds like we have heard this before
But if you are not doing this, HOW do you get yourself to?
One thing that helps me is I practice trading outside of trading. I visualize my weak area, which is cranking out money all morning long, then letting my stops go, getting sloppy. I visualize myself snapping out of it. Not getting all bummed, but taking the next closest exit to my stop. And feel really good about it. Like a weight has been lifted, feel my sense getting clearer. I am sure most of you have experienced the objectivity you experience when you finally dump a trade thats gone past your stop. YOu see more, you feel confident not because you lost money but because you begin to condition trust in yourself, in your ability to follow the plan. Then plan makes money, now you feel good because you are trusting yourself to follow it. If you are not following your plan EXACTLY, then feel good when you at least following it CLOSELY, do not berate yourself. In psychology I think its called successive approximation...you can read up on it if you want, or Shaping.
It is here I engage in a little fantasy sometimes...but it helps. I have my goal from here to the end of the year. It is a defined monetary goal. That goal is something like," By the end of November and December 2003, I have generated $100K in net income from trading." In fact, thats what it is. So, since I get sloppy on my stops sometimes, I have practiced a pattern interrupt to get myself out of that mode of thinking. I actually stand up, and say (if I am alone on my side of the trading room) but it works better if i say it out loud, "$100K.". Then I right myself, and sit down and do what needs to be done. I say weird things to myself like," I am the steward of this capital, and I am trusted to grow it." Whatever I can think up. Whatever works. Ask yourself, "If I was the best trader in my firm, in my state, in the world, what would I do in this situation?" Then do that without regret, and give up the worry about losing money in the morning, the market doesn't care, and neither should you IF you are committed to improving and taking an active role in it.
I again rehearse this in my head outside of trading hours. At first, I couldn't even rehearse it in my head, there was a lot of internal resistance. Now its fun. Feels just as good as trading, and there are multiple positive things that comes from this type of activity for me.
Ok its almost 2pm, nobody else in my firm is here, but I wanted to write this because today was one of those days where I successfully applied all of the above. I slipped a little today, but righted myself and kept on trading with no ill effects, no frustration, and literally looked at my "mistake" as the real mark of my true development as a trader. AFter the close I wrote down what happened and how I will practice and rehearse it over the weekend.
Hope I didn't clog the server with this long post. But I hope that someone gets something good out of it.
