Mastering the Four Fears

[tireg]

"The speculator's deadly enemies are: Ignorance, Greed, Fear and Hope."
-- Reminiscences of a Stock Operator

I'd also add 'ego' to that list.

I've always found it interesting that hope is in the equation.. usually it has positive connotations but in this case it is quite negative and can be even destructive.

Interesting article that addresses the 'hope' aspect:
http://www.fibtimer.com/subscribers_historical_reports/060521_fibtimer_commentary.asp

From the article:
"When we take a position in the market, whether bullish or bearish, we hope it will be successful. Hope can be such a powerful emotion, that when the same trading plan that told us to enter a position originally, reverses and tells us to exit immediately, our emotions may very well focus on the possibility that if we just hold on a bit longer, any loss may be erased." More in article.

 

[andread]

Quote from Steve Tvardek:

Hey, if you havent been there, then you wouldnt know.

I really wish people wouldnt comment on things they have not themselves experienced.

It's interesting to see that experienced traders have this feeling. So the problem does exist.
Still, I also think it's quite subjective. I don't know if crystallballs has experienced it or not, but I guess there are people who are quite comfortable with the idea of making a lot of money fast.
I was thinking those people were the majority, though. I must be wrong somewhere.

 

[Steve Tvardek]

I dont think anyone has a problem with the idea of making a good amount of money fast, but once it happens and it becomes "real" the perpective may change. Before it was just an idea, a dream. But what happens when that dream starts to come true? What once was a level of success that was out of reach now becomes your reality with the sky as the limit still to go. From what I understand about trading after talking with much more experienced traders than I, they say that getting to a level where, say you avg a grand everyday, is the hardest part of all. Going from knowing nothing to making ~250K/year. After that its much easier to get bigger and bigger, according to these guys. Sort of like that saying that your first million is the hardest to make (not that I would know yet ).

I dont know, I guess I'll have to see how it goes. Maybe its just feeling a little weird once you first cross that threshold and then you dont think about it anymore. Like once you get used to it, it no longer seems like a big deal?

Quote from andread:

It's interesting to see that experienced traders have this feeling. So the problem does exist.
Still, I also think it's quite subjective. I don't know if crystallballs has experienced it or not, but I guess there are people who are quite comfortable with the idea of making a lot of money fast.
I was thinking those people were the majority, though. I must be wrong somewhere.

 

[aPismoClam]

Quote from crystalballs:

What does the company, Goldman Sachs, fear?

my guess would be, autobiographies.

 

[aPismoClam]

Quote from tireg:

"The speculator's deadly enemies are: Ignorance, Greed, Fear and Hope."
-- Reminiscences of a Stock Operator

I'd also add 'ego' to that list.

I've always found it interesting that hope is in the equation.. usually it has positive connotations but in this case it is quite negative and can be even destructive.

Interesting article that addresses the 'hope' aspect:
http://www.fibtimer.com/subscribers_historical_reports/060521_fibtimer_commentary.asp

From the article:
"When we take a position in the market, whether bullish or bearish, we hope it will be successful. Hope can be such a powerful emotion, that when the same trading plan that told us to enter a position originally, reverses and tells us to exit immediately, our emotions may very well focus on the possibility that if we just hold on a bit longer, any loss may be erased." More in article.

Hope is the oxygen of the soul, but is a problem if it has no basis in reality. It is then delusion, the trader's worst enemy. Hope is essential for success in any endeavor, but when misapplied to take the place of an action that is rationally understood to be necessary, it is your enemy.

I'd say ego disqualifies more than a few...

 

[pattersb]

With all due respect, if a top fear is making too much money you must not feel much fulfillment trading the markets. It's a pursuit that involves one thing, MAKING MONEY.

I'm sure Warren Buffet's sense of fulfillment has peaked right about now .

although, I'm on the verge of starting to earn dollars, after months of non-stop work, (not yet ... but soon), and I come from a background of having to actually produce something to earn my money, so it is not difficult to imagine feeling guilty for being paid vast sums for producing nothing......

Perhaps, that may explain why you find so many pricks in this area of human endeavor.... they have made vast amounts, and fail to recognize their limited contribution to anything besides their own wealth ......


Simple solution ... Take from the pigs with no remorse and GIVE IT AWAY ...

 

[Steve Tvardek]

Perhaps I went overboard with my posts, but its not a major fear of mine (making money too fast). Its something that will pass. All I am saying is that it does affect some people way more than others. I am somewhere in the middle. While I am aware of it and feel it, its not going to get in my way of maximizing my talents. I do receive fullfilment from my trading and strive to keep getting better and better. Trading is a great game that can never be truly won, so there is always room for improvement and never time for complacency.

Quote from pattersb:

With all due respect, if a top fear is making too much money you must not feel much fulfillment trading the markets. It's a pursuit that involves one thing, MAKING MONEY.

I'm sure Warren Buffet's sense of fulfillment has peaked right about now .

although, I'm on the verge of starting to earn dollars, after months of non-stop work, (not yet ... but soon), and I come from a background of having to actually produce something to earn my money, so it is not difficult to imagine feeling guilty for being paid vast sums for producing nothing......

Perhaps, that may explain why you find so many pricks in this area of human endeavor.... they have made vast amounts, and fail to recognize their limited contribution to anything besides their own wealth ......


Simple solution ... Take from the pigs with no remorse and GIVE IT AWAY ...

 

[pattersb]

Quote from Steve Tvardek:

Perhaps I went overboard with my posts, but its not a major fear of mine (making money too fast). Its something that will pass. All I am saying is that it does affect some people way more than others. I am somewhere in the middle. While I am aware of it and feel it, its not going to get in my way of maximizing my talents. I do receive fullfilment from my trading and strive to keep getting better and better. Trading is a great game that can never be truly won, so there is always room for improvement and never time for complacency.

Good luck with it. Strip the street naked, as I see it ... they'd do the same to you in a heart-beat ...

I just began about six months ago ... I think I'm on my way in conquering my fears.

Learn to lose properly .... (and to win for that matter ...)

 

[xtrhvydty]

Well we can add (to the 4 fears) impatience, revenge, depression and addiction, they all have the power to wreck one's system. For example, depression of losing gains leading to fear of a repeat leading to impatience leading to partial profit taking leading to revenge trading leading to addiction to poor trading habits leading to ruin leading to depression leading to daytrading...repeat as necessary...

Only thru direct experience have I fumbled through each of these. For example, I once took $200 profit and closed a trade which ballooned to $10k in the next week (a put option in a strangle). Yes, it still hurts. Today I must have a mathematical, statistical, reason for my actions. I write out the argument and counter-attack it on paper before pulling the trigger. The point is that I should and must trust my analysis over my emotions.

The NYSE is no place for emotional growth and development.

 

[andread]

Quote from Steve Tvardek:

I dont think anyone has a problem with the idea of making a good amount of money fast, but once it happens and it becomes "real" the perpective may change. Before it was just an idea, a dream. But what happens when that dream starts to come true? What once was a level of success that was out of reach now becomes your reality with the sky as the limit still to go. From what I understand about trading after talking with much more experienced traders than I, they say that getting to a level where, say you avg a grand everyday, is the hardest part of all. Going from knowing nothing to making ~250K/year. After that its much easier to get bigger and bigger, according to these guys. Sort of like that saying that your first million is the hardest to make (not that I would know yet ).

I dont know, I guess I'll have to see how it goes. Maybe its just feeling a little weird once you first cross that threshold and then you dont think about it anymore. Like once you get used to it, it no longer seems like a big deal?

Steve, thank you for the answers. It makes sense