Remaining Emotionless While Trading?
- Thread starter mizer
- Start date
If you think about it, trading is always a losing game emotionally.
A stop usually means some kind of retracement, so I "feel" like I "lost" part of what I gained. A little voice says "I had enough signs to know I should have bailed early," even though I loyally followed my system.
After I exit properly and the trade continues to go my way, then I "feel" like I "lost" the additional profits or the little voice says "You failed to ride out your winners", even though I loyally followed my system.
Stupid little voice doesn't realize he makes no sense. I often end up with this ugly trade hangover anyway. The following has helped me:
1. I document the trade immediately in my trade journal. I discuss any lessons learned and any emotions I had during or after the trade. I try to replace any emotional reactions with a rational assessment of the trade. Usually I feel better afterwards given that I followed my plan, although I didn't make as much as I "expected."
2. I stop peeking at my profit/loss and just stick to my system. Unfortunately, with option spreads I often want to see the greeks reaction to the underlying so I end up peeking anyway. But I remind myself that my account will benefit more in the long run by just sticking to the plan. This is all about probabilities which require numerous trades. Short-term variations are unavoidable.
3. I enjoy the game, so I want to stay in it. Hitting singles is a lot of fun. I don't want any big losses to wreck my mind, and I don't want any big gains to turn me into a manic trade junkie. So instead I set forth to just follow my system and stay in the game. I try to avoid fantasies about how much I'll make in the future.
4. After I close some intense trades, I get the hell outta here. Over the river and thru the woods if I can. I always feel better later, that I stuck to proper execution and did not break my rules, regardless of the monetary outcome.
Repeating the process over and over helps silence my inner trading demons. If that doesn't work then I just go to this site
http://www.entityclearing.com/
cheers & lotsa luck
A stop usually means some kind of retracement, so I "feel" like I "lost" part of what I gained. A little voice says "I had enough signs to know I should have bailed early," even though I loyally followed my system.
After I exit properly and the trade continues to go my way, then I "feel" like I "lost" the additional profits or the little voice says "You failed to ride out your winners", even though I loyally followed my system.
Stupid little voice doesn't realize he makes no sense. I often end up with this ugly trade hangover anyway. The following has helped me:
1. I document the trade immediately in my trade journal. I discuss any lessons learned and any emotions I had during or after the trade. I try to replace any emotional reactions with a rational assessment of the trade. Usually I feel better afterwards given that I followed my plan, although I didn't make as much as I "expected."
2. I stop peeking at my profit/loss and just stick to my system. Unfortunately, with option spreads I often want to see the greeks reaction to the underlying so I end up peeking anyway. But I remind myself that my account will benefit more in the long run by just sticking to the plan. This is all about probabilities which require numerous trades. Short-term variations are unavoidable.
3. I enjoy the game, so I want to stay in it. Hitting singles is a lot of fun. I don't want any big losses to wreck my mind, and I don't want any big gains to turn me into a manic trade junkie. So instead I set forth to just follow my system and stay in the game. I try to avoid fantasies about how much I'll make in the future.
4. After I close some intense trades, I get the hell outta here. Over the river and thru the woods if I can. I always feel better later, that I stuck to proper execution and did not break my rules, regardless of the monetary outcome.
Repeating the process over and over helps silence my inner trading demons. If that doesn't work then I just go to this site
http://www.entityclearing.com/
cheers & lotsa luck
The attitude I had after a while was - "Get used to it...
It seemed to me that there were only a few outcomes when taking a trade.
1) You are ecstatic because you got in (ex. a long) at the best (lowest) price and got out right at the best price (relative to your timeframe).
2) You got out at BE.
3) You are distraught because you got out of your position too soon and could have made more profit.
4) You are distraught because you hung-on too long in a losing position or gave back much/all of your profits or are even now worse off than before by being deep in the hole...
1 is probably rare enough to be dismissed.
2 leaves you where you were.
Neither 3 nor 4 is particularly pleasant, but 4 has no redeeming virtues whatsoever.
So what's left, but to "get used to it"....?
It seemed to me that there were only a few outcomes when taking a trade.
1) You are ecstatic because you got in (ex. a long) at the best (lowest) price and got out right at the best price (relative to your timeframe).
2) You got out at BE.
3) You are distraught because you got out of your position too soon and could have made more profit.
4) You are distraught because you hung-on too long in a losing position or gave back much/all of your profits or are even now worse off than before by being deep in the hole...
1 is probably rare enough to be dismissed.
2 leaves you where you were.
Neither 3 nor 4 is particularly pleasant, but 4 has no redeeming virtues whatsoever.
So what's left, but to "get used to it"....?
breakeven is the best thing that can happen to a beginning trader.......winning for new guy is really bad start.........no where to go but down.......losing is the only bad thing that can happen to me...............capturing any positive points is beautiful..........the points u missed are there day and night so who cares? right?
Quote from mizer:
Its not my edge I'm concerned about (Its profitable) Its about leaving my emotions out of trading. A few other guys in my group have been trading for 5-15 years and they pull nice profits from the market daily and they too burst out swearing or bang the desk, throw the mouse,etc
Well, we are all different and there is no ONE right approach. If you put a lead on your emotions, doesn't mean that they are not there any more. If you are an emtional type of person, you have to let them out, otherwise it might affect your mental state in the long run. I am not too emotional, but I tell you, there a few F...s flying around the room when I hit a big winner
I don't see any problem being emotional if you are mentally tough. A lot of sports greats were/are very emotional, but what makes them best, apart from skills, is mental toughness. Unfortunately, I don't believe one can master the latter as I think it is something we are born with/without.