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Unfortunately this one subject I have a lot of painful authority on, hence perhaps I may be able to offer something amounting to advice.
To find why I was staring at an account blowup, I systematically got a handle into all my emotions that caused this drama:
1. RELIEF
It's hard to imagine that an account blowup brings the emotion of relief. However that's what was the payoff for me. I used to be relieved from all this responsibility of trying to make a living out of trading. No capital, no further thoughts that making this into a career possible.
2. BELIEF IN OUTSIDE INSTEAD OF WITHIN
When the ego has been allowed it's way in one tiny thing such as allowing a stop loss to be moved 'a bit' there is no telling what would be the next permission that would be granted.
Like the five year old who believes in Santa Claus, you do yourself a disservice by clinging to notions that allow you to DISOWN RESPONSIBILITY FOR YOUR OWN ACTIONS. Setting a stop, respecting the stop and following the plan are some of them.
There is no fairy tale trade out there without you empowering yourself with responsibility. Rather there is a monster trade waiting to take our your entire account if this becomes a habit. We can easily cultivate bad habits and even continue to profit from bad habits till that ONE TIME.
3. OBSESSIVE COMPULSIVE PROBLEMS
When trading becomes more than JUST A PROFESSION.
Trading may not be being used to make money but to satisfy some inner incompleteness.
4. FORCE, ANGER, PRESSURE
You have been trying so hard to make money...
that you suddenly are overwhelmed with the pressure, the huge demand on your time and concentration and the mind rebels and DECIDES TO BLOW UP.
So how do you prevent all this from happening?
I'd really like to shout out the wrap up, the short summary of the whole thing as simply:
KEEP LOSSES SMALL!!!
That is really ALL there is to it.
Of course this needs supporting material like know your risk, trade your proper size, know when to stop, find a method that is compatible etc but even when you reduce it to the elements the gist ofthe message is the same.
Follow this and the end game WON'T be a account blowout.
One who searches for a bygone self
and only meets the corpse of his desire...
Why do novices get into trading?
The reasons are many, but their shape is endless.Usually it is some egoistic moment of desire that shapes a formation to fulfill it and the moment out is satisfied our effectively defeated,that form yields place to another.
When One looks for that self it is not there, there is only a trace is that desire that had actuated it into existence, desire fulfilled and past or frustrated or dead.
Trading appeals to a person's autocratic senses - a cycle emerges sooner or later - change occurs in the person and is not always evident because our goes on the subtle levels of his existence.
Tip
This is my humble attempt at demonstrating what trading is on some subtler levels. Please vote below if you find this useful.
Here where our half lit ignorance
skirts the gulfs on observing
the dumb movement of ambiguous price.
Market structure works such that it gives no clue to the purpose of its existence. The best light is that of an ignorant which is only half light, a state of awareness that is not in possession of the truth but seeking for it. Everything is shot through and through with this disabling ignorance.
Here where one knows not even the step in front
And Truth has to throw on the shadowy back of doubt.
The road of the thinking mind litters across the woods of errors, half truths and doubts and whatever conclusions it comes to always prove tentative as fresh perceptions break upon it and demands modifications or radical changes in the existing thought structures.
Men refuse to break free from the moorings in ignorance and inconscience and to change themselves sufficiently by way of aspiration to hold the higher light which comes down repeatedly to uplift them. The market always shows its hand to the one who is willing to receive the knowledge.
Even when he responds in the heat of the moment, his past and his habitual inertia drag him down after a time and he sinks down unable to keep pace with the steps of the manifest power that the market is.
The calm delight that weds my soul to the task,
The key to flaming doors of equity ecstasy.
The reactions of pain and pressure to which one is normally subject are the result is of his self limitation in the walls of his ego and consequent separation from the rest of the world. He feels all contracts as coming from outside himself and responds with pressure and pain in the manner in which they affect his consciousness - these reactions fortify his sense if separativity from others. If, however, he draws back from this surface action-reaction activity and knows to receive all contents with equality - and that is possible with a deeper base of consciousness - then there settles a calm of being which is not disturbed by outside impacts.
It is possible by certain psychological discipline to remove this veil of separative consciousness and become aware of the true nature of the market. This method is to be found through many ancient psychological disciplines e.g. practice of yoga. Man lives mostly in his surface mind. The process of this self discipline is long and difficult. Outward asceticism is not necessary, but a conquest of desire and attachment and a control over the body and it's needs, greeds and instincts is indispensable.
Miss Market walks upon her mighty way
Unheeding when she breaks a soul, a life
Emotional trading is fine but there should not be unjustified emotional which leads to want of balance, agitation, disharmony of expression or even contrary reactions and nervous disorder.
The dangers are already mentioned in the stanza - the life of an account, viz capital, gets extinguished due to emotional trading.
A pure perception led his eyes
His impartial vision waited not to think
It enveloped the chart in a single glance,
It looked into the very core of price
Deceived no more by form he saw
And knew what lurked unseen unknown
He seized the idea in mind, the wish in the heart
And plucked out grey folds of secrecy
The motives which from their own sight men hide
He heard the inspired sound of his own thoughts
Re-echoed in the charts, thus in other minds
The world's thought-streams travelled into his screen,
But his inner self grew near to humility
And bore a victory's weight, so common now,
Yet stood untouched, king of itself, alone...
He had simply followed his plan!
At first grieved
On original somnolence
Inert, released into forgetfulness
Prone it reposed, unconscious on mind's verge
Obtuse and tranquil like the stone and star.
Never underestimate the power of pent up emotion.
As an evolving trader in the process of growth a semi conscious paradox exists - we experience pain and grief but then it lays at repose in the folks of material consciousness not yet awakened to self awareness. The pain is lost in itself, immobile and unresponsive, there is no active awareness. However it has the potency to set into motion destructive forces within. The setup for failures is hidden!
THE FALLACY OF PAINFUL LOSS BEING REMOTE
The trader is aware of the problem of a big loss being around the corner calling for a solution, but really this has not been worked out before taking the next trade. This is because the possibility of a big loss feels remote though it isn't.The trader would rather live in his illusion than take simple steps to stay safe.
OLD ACHE
Then a slow faint remembrance shadowlike moved,
And sighing we recognize the close and lingering ache,
Deep quiet old made natural to outs place
But knew not why it was there not whence it came!
The problem we actually are trying to address as traders is simply to keep loss small. However this somehow seems insurmountable in practice- even such a simple thing!
This is because of the many many conditionings that we subject our minds to during trading and create secret places in the unaware mind such as loss aversion, risk avoidance - these are replaced by a dull pain. This is sensed in the being and even recognized to have been there for long, so much so it almost seems natural. Also trying to find whence it came from also seems to come up with a blank. The way out of this is to cultivate the habit of placing stops and respecting them - this can be achieved by a personal accountability tool e.g. via journaling
This is my humble attempt at demonstrating what trading is on some subtler levels. Please vote below if you find this useful.
The past is quickly replaced by the future and recedes from the eye. But on that account it does not entirely cease to be. All the movements that are past, thoughts, feelings, activities, leave a mark, a concrete sediment in the subconscious layers in the mind and constitute themselves into a factor top be reckoned with not only in the present that succeeds it but also in the furore to come. They form predispositions sanskaras in the nature and influence the growth and reactions and impulses. Every bit in the past lives in its essence in the memory and goes on exerting its pull.
