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Hi,
I think at least some of my problems with trading are from the emotions I deal with while trading. I actually thought I was alone in this before reading this thread, and it's been a welcome eyeopener. I've been working with a reiki practitioner on the stuff that comes up when I trade, causing me to eat like a bird and take a dump like an elephant. Here's what I've dealt with so far- fear of being powerless in an out of control situation. ( Trade going the wrong way.) Second big one- every time I've been successful at something I've had to deal with envy and nasty stuff from people who are jealous. I've going to deal with that by keeping my mouth shut about it if I do get to the point of being profitable in this long run.
I've been evaluating every trade, writing down what happens, and evaluating my trade by coming up with a ratio of how I rate myself in trade planning, trade entry, trade execution. Then I figure out what I did wrong, and how I can improve my results for my next trade.
I am trading nadex options, I want to trade futures but I want to get my trade issues dealt with before I take on the futures markets- which have a much higher degree of risk than options, where your risk is limited to the amount of the option.
For a long time, I was so paralyzed by fear that I could not record my trades, and I would overtrade out of frustration and anger. Nadex lets me trade live without risking a lot while I learn to deal with trades going sideways, even after you get up on time, evaluate the markets, put together your trade plan, and your buy and sell points. I screwed up today because I've had a series of losing trades, I planned carefully, got a good entry, and the trade hit my strike price and reversed. I had failed to set a stop loss on the trade, and was 'just hoping' it would go back up. My cat started to howl, my chest felt tight, I was looking at the atr, thinking, it's declining, that is not a good sign, but I didn't pull the trade where I should have, because I failed to set a stop loss. That's a big error. I got paralyzed again.
I think today is going to be range bound (ES) and I went long at the top of the range thinking it was an upside break out.
Hind sight is 20/20, isn't it? One issue with Nadex options that is specific to binaries is that you have a time limit on the option, and it is a yes no proposition, you are either in the money on the option or not, and you lose your premium if you are in the wrong direction. I want to make the shorter term options work for me, so that I don't sit in front of the computer all day protecting my position.
So more practice on exits for me. I get paralyzed when I don't have an exit plan, and I need to exit.
My next issue to deal with is being angry when I have a losing trade and wanting to get even.
Thanks all of you for posting to this thread it's been very helpful to me.
Jenne
Jenne,
if you read only one trading psychology book, read "Trade Mindfully" by Gary Dayton. I read this after few others recommended it in this forum and it really is good book. Thinking (heuristics or mental shortcuts) is as important as emotions in trading. It will give you a reason to practice mindfulness.
Lot of people fail with mindfulness is when they try to control "quieting the mind" or thoughts and get upset when it is not that "quiet" as expected even after trying "hard". This by itself is causing stress and anxiety.
Managing discomfort is key to successful trading and looking at discomfort as a cue to be objective will greatly help you. Bottom-line is do not fight them but accept and use them.
Never give up, never surrender, be all that you can be. Never half ass trading. If you plan to be a trader give it your all. Learn all you can learn. Make it your everything. If you fail try, try, and try again. figure out what you did wrong. If you don't know then ask someone whose a better trader. If you have obligations to your family then pick up a stable job and learn how to trade in your spare time but don't abandon your family. This is the only moral reason I could think that would be a good enough reason to quit temporarily because the children depend on their parents income. That and if you're under capitalized and need a job to live then by all means find a job to work but don't quit simply for that reason just keep learning when you have time.
R.I.P. Joseph Bach (Itchymoku), 1987-2018.
Please visit this thread for more information.
thanks for the replies, I will buy the book by dalton. I am hoping that I can get to the point of using my emotions, rather than being pushed around by them. My finances are OK, I work week ends, Friday Saturday and Sunday-it's enough to keep us floating. My husband is really supportive, so is my cat... I am noticing that I am no longer trading in a state of panic, and I can think about what I'm doing and record my actions and analyze them. My husband and I run a small business, I could explain to him that pulling an option trade short of the target is the equivalent of buying 500.00 worth of merchandise and selling for 300.00 to make the rent, and he got it.
If nothing else, I'm resolving my personal issues, who would have thought trading would be a vehicle to really looking at your own behavior. I'm older, already did the put the kid through college, people in my family literally die young at about 90, usually live to 100, I think this is my third real passion in life. and I agree, never, never sacrifice your family, there is no money that will salvage that one.
I think it has helped me to run the business week ends, while learning to trade, I really have to take a mental break and do something completely different for a while, when I get back to the screens on Monday, I may be tired, but my mental gears are no longer rusty. next step for me, get rid of the issues about having been ripped off in the past... and having that one pop up in trading.
thanks again,
Jenne
I've read other books with similar themes, but not specific to trading. I bought this one yesterday and started reading last night .. great recommendation, thanks!
"I only become stronger because I identified my own weakness and worked for decades to improve"
"Know Thy Self"
1) Observe and Record
2) Postulate theory of your findings (Trading Results: What went right and wrong? How could one improve their results)
3) Review original findings (Trading results) and gather more findings (Data Analysis), re-observe to confirm your findings.
4) Try to disprove theory (More Analysis, I complete this through Wolfram and IBM software, it is exhausting but the ROI is worth your time and effort, given the fact, you and only you are responsible for your gains and losses)
5) If you can NOT disprove theory, the findings are substantiated. (Technical Analysis, Gann, Elliot, Fibonacci and hopefully the people beginning and intermediate level traders are working their way to Advance levels in their analysis.)
More importantly, my trading plan is in-depth and has 23 pages. It not simple just simply complicated, I rely solely on my trading plan to direct my decision making, it is my basis for the above 5 steps.
I spent more time analysing the markets than trading.