I Have Done It Again

Quote from michaelscott:

One day I was trading some oil futures and then went on vacation for a while. I forgot to close out a few contracts. Got back home a month later and there were oil drums all over my lawn.
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You think that is bad. I was on the other side of your trade.

I had to deliver the damn things to you...:mad:
 
Quote from Compulsive:

[B
As I look back, when I follow my plans, there is money to be made, but after awhile, I do not stick with my rules and eventually it gets crazy

[/B]
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So sorry for your situation but your one quote above sums up the entire problem- discipline! Anyone can make money in the market and I truly believe it. It is just that the skilled ones are those that have discipline over their emotions and discipline to stick with their trading plan and risk parameters and discipline to know a point when it is time to sweep profits and not just increase size indiscriminately.

I dont spend my days perfecting my "system", I think that has been there for some time, I spend every trading day struggling to keep my disicipline.

Again, I feel bad for your situation and hope the story wakes other people up but this is not a gambling problem entirely.

Here is the main points that lead to these problems:

1. Lack of respect for risk - people who turn $5k into $100,000k tend to have little or no respect for the risk of the market. They feel that the market is an entitlement where they have a right to money and have no concept of risk and how the market operates. If you do not respect the risk, then you go blindly forth without concern and ignore all warnings or how much of your capital you are about to lose. Would a pilot last long if he ignored the risk of wind sheer, heavy snowstorms or lightening just because his plane flew through such conditions in the past? If you ignore the risk, you fail to take precautions or appreciate what could happen when things go wrong.

2. Money is seen as a score, not hard cash - The problem trader sees the number on their screen as a score like Tetris or any other video game. The goal is to get as high a score as possible and if you go for it and lose your last life, you just reset and try again. The only way to get high scores in video games is to be aggressive and push push and play hard. Trading account balances are looked at like these scores and tradres just want to see it grow and if they take a 10% drawdown, they dont put down the game controller, they keep trying to get thescore back higher, ignoring risk or any common sense. The numbers seem like a score rather than cold hard cash so it becomes a game. Also these type of traders think their self-worth and happiness is tied up in how well they do so you have to get the highest score and do it the fastest. If you were nothing before the money, you will be even less with it and nothing once you lose it.

3. Inability to admit being wrong - the obssessive trader is under the assumption that one should win 100% of the time. They feel that they are never wrong, the market or the game is just messed up and will come to their side. They buy a stock and it drops and they only see their initial ego and pride as going long and therefore have no ability to change their viewpoint and keep adding more shares on the way down or get out to cut losses and then simply wait for next long entry, without considering another possible direction. Being wrong is seen as admitting defeat and these traders constantly ignore the possibility of being wrong or that you shoudl expect to be wrong a significant part of the time and you simply close the position and move on. Ego and pride are horrible traits for an activity where you have to admit mistakes constantly while hitting the big trades.

4. Failure to recognize the value of time - the trader only knows that the money must be made today or tomorrow and making it over a longer period of time is failure. They have no concept of time other than what is in the now and the moment. Profits to them only count if they are made quickly. Making $3,000 in 3 weeks is stupid even though it is done smartly compared to making it in 5 minutes despite risking the whole account to get there. This trader cannot see the bigger picture of the month, quarter or year and MUST make the money now or the world will end apparently. The logical trader wants to make money over the long run and puts trades in perspective.

Add all these up and you have the trader who blows up account after account and never realizes the solution to reduce the bleed wa with them from the beginning. I work hard to master these demons as we all do. The dangerous trader never gets it.

Best of luck...
 
Quote from Compulsive:


What causes me to do this?
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If you fit the profile of a compulsive gambler then you have a serious problem (as you already know).

Your compulsiveness is an attempt to block the pain caused by psychological damage you have suffered in your life (probably early on in your life).

The subconscious mind always wins out in the end (everbody gets what they subconsciously want). And in your case this means eventually feeling the pain you are trying to supress.

You have already taken the correct steps, hopefully your therapist can uncover the root cause of your problem and with help of GA you can stay away from trading.

Here is quote from Ed Seykota, note he likes to refer to the subconscious mind as 'Fred' and shortens conscious mind to 'CM'.

Interruptions in the Flow of Experience - Creation of Repeating Drama

Modern society teaches us to suppress our feelings. We learn to hide them, substitute them, disguise them and desensitize ourselves from them. We strive to disconnect our feelings from our logic. People tell us, "you shouldn't feel that way." Men are supposed to hold back tears and women are supposed to hold back anger. School children are supposed to sit in rows and not express how they feel about the school system. All this suppression interrupts the vital link through which Fred communicates Experience to CM.

When this interruption of the transfer of experience occurs, Fred continues to replay the experience, at higher and higher levels, to try to inform CM.

CM may learn from a parent or authority figure that a particular feeling is "bad" and that one "shouldn't feel that way." CM may associate the feeling as dangerous in itself and want to block it out. CM may even program Fred to set up a "Judge" to block the feeling, thus creating a K-not, that ties up (knot) the feeling as something not good.

Nevertheless, Fred keeps trying to communicate the experience to CM, and raises the intensity, of the effort. Fred turns up the pressure on the "Feelings Pump." Images may appear in bothersome daydreams and nightmares. Eventually, Fred may resort to engaging the outside world, and arranging a Drama. Typically, the positive intention of the PW (protective warning) is to avoid a particular drama, so suppressing the warning is often enough to entrain the drama. As the drama unfolds, it provokes the very same set of feelings, so you find yourself, amazingly and exasperatingly, in exactly the situation you dislike, again and again.

If CM still does not get the message, then these repeating dramas may go on and on at higher and higher levels, for years or even for a lifetime.

Fred wants CM to experience the PW feeling. CM may keep blocking. Ironically, CM, in the process of blocking the feelings, also blocks out its own best warning system for repeat occurrences.

In this way, Fred always has a positive intention, and everyone always gets what they want, or at least what Fred wants. Protestations and denials from CM only confirm the syndrome.
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Quote from optioncoach:

So sorry for your situation but your one quote above sums up the entire problem- discipline! Anyone can make money in the market and I truly believe it. It is just that the skilled ones are those that have discipline over their emotions and discipline to stick with their trading plan and risk parameters and discipline to know a point when it is time to sweep profits and not just increase size indiscriminately.

I dont spend my days perfecting my "system", I think that has been there for some time, I spend every trading day struggling to keep my disicipline.

Again, I feel bad for your situation and hope the story wakes other people up but this is not a gambling problem entirely.

Here is the main points that lead to these problems:

1. Lack of respect for risk - people who turn $5k into $100,000k tend to have little or no respect for the risk of the market. They feel that the market is an entitlement where they have a right to money and have no concept of risk and how the market operates. If you do not respect the risk, then you go blindly forth without concern and ignore all warnings or how much of your capital you are about to lose. Would a pilot last long if he ignored the risk of wind sheer, heavy snowstorms or lightening just because his plane flew through such conditions in the past? If you ignore the risk, you fail to take precautions or appreciate what could happen when things go wrong.

2. Money is seen as a score, not hard cash - The problem trader sees the number on their screen as a score like Tetris or any other video game. The goal is to get as high a score as possible and if you go for it and lose your last life, you just reset and try again. The only way to get high scores in video games is to be aggressive and push push and play hard. Trading account balances are looked at like these scores and tradres just want to see it grow and if they take a 10% drawdown, they dont put down the game controller, they keep trying to get thescore back higher, ignoring risk or any common sense. The numbers seem like a score rather than cold hard cash so it becomes a game. Also these type of traders think their self-worth and happiness is tied up in how well they do so you have to get the highest score and do it the fastest. If you were nothing before the money, you will be even less with it and nothing once you lose it.

3. Inability to admit being wrong - the obssessive trader is under the assumption that one should win 100% of the time. They feel that they are never wrong, the market or the game is just messed up and will come to their side. They buy a stock and it drops and they only see their initial ego and pride as going long and therefore have no ability to change their viewpoint and keep adding more shares on the way down or get out to cut losses and then simply wait for next long entry, without considering another possible direction. Being wrong is seen as admitting defeat and these traders constantly ignore the possibility of being wrong or that you shoudl expect to be wrong a significant part of the time and you simply close the position and move on. Ego and pride are horrible traits for an activity where you have to admit mistakes constantly while hitting the big trades.

4. Failure to recognize the value of time - the trader only knows that the money must be made today or tomorrow and making it over a longer period of time is failure. They have no concept of time other than what is in the now and the moment. Profits to them only count if they are made quickly. Making $3,000 in 3 weeks is stupid even though it is done smartly compared to making it in 5 minutes despite risking the whole account to get there. This trader cannot see the bigger picture of the month, quarter or year and MUST make the money now or the world will end apparently. The logical trader wants to make money over the long run and puts trades in perspective.

Add all these up and you have the trader who blows up account after account and never realizes the solution to reduce the bleed wa with them from the beginning. I work hard to master these demons as we all do. The dangerous trader never gets it.

Best of luck...
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Those are some of the best pieces of analysis I have seen here for a while. Thanks for informing all (including myself) of the need to look at the bigger picture, and the longer time perspective, instead of self-destructing in the here and now!
 
great post.

fwiw, this is something i see in many, if not most traders, although often to a lesser degree.

imo and ime, a trader is more likely to fail due to emotional/psychological shortcomings, than to analytical shortcomings.

iow, while you do need a methodology with an edge - it aint gonna mean jack, if you do not have the discipline and emotional control to trade it.

ONE big blowup can erase months or years of goals.

i have a business plan, a trading manual, and i extensively document each trade. if it's not worth documenting, it's not worth making the trade.

every trader i train must have those factors as well. i don't care how brilliant a trader you are - you must have discipline - especially wiht index futures.

write up a business plan. set up a list of trading rules.

document every trade.

if you break any trading rule, punish yourself. if you go a week with following all your rules - reward yourself. it sounds trite, but take advantage of the pavlovian principle.
 
Marketsurfer's new alias. Wife already left with the kids so why fake it in the alias?

Sorry bro, but some people just can't do it.

Best of luck.
 
You compulsive gambler and only cure is to stop forever.

Don't let people tell you different but trading and gambling same thing. Both trading and gambling have people who can do it without it taking over their lives but many others are compulsive and regardless if it is ponies or trading, they will eventually go broke due to they are compulsive gamblers.

Friend of mine hit Superfecta at the ponies for over $70k earlier in this year. He has full time job but also bets everyday and he keeps betting more and more. So much that his wife told him it is getting out of control and he needs to stop. Anyway, the very next day after hitting the $70k superfecta which he hit on a $2.00 QUICK PICK ticket (pure luck, no handicapping involved) he was back betting again. But instead of making small amount bets like he normally did, he now started betting thousands thinking he now on his way to a million.

Today, 5 months later he broke. Lost everything. Wife filed for divorce. His life busted and he a broken man. I advise him to go to meeting like you. Don't know if he will.

I am glad you did
Good Luck.

No more trading for you..ever!
 
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