Have you ever encountered a situation where emotions got the better of you in trading? How did you learn from that experience?
I feel like I’ve said this a hundred times already but this is something that I really struggle with. But during such moments, I’ve learned that the best thing to do is just step back, relax and clear my mind before even considering opening a trade.
I read The Zen Trader by Peter Castle.
As a very emotional trader myself I forced myself to follow a very strict “all or nothing” management. Which means, that price had to hit my TP or I would let it stop me out.
Emotions were so intense that in the beginning I could only place a trade while listening to meditation music, exercising breathing technics to calm myself down and shut off the computer as soon as my entry triggered.
But over time my comfort zone widened and today I can only laugh about how emotional I was 1,5 years ago. Today I can take losses, decrease my risk on a trade, adding to my position and taking profits without shaking and pulling my hair afterward.
Did ‘The Zen Trader’ change your perspective on trading or influence the way you approach the markets?
It changed my whole outlook on life, trading included. Now I can place trades and close my desktop to deal with other interests.
And yes, I could miss out on a large trend movement either way, but my strategy is profitable enough to compound my account size.
Definitely , kept on adding to a losing position like I was going mad, ended up blowing my account and a hole in my wall.
I’ve been there too! I had this winning trade going, and I got a bit carried away, thinking I could squeeze out even more profit. But, the market had other plans, and it turned against me, resulting in a loss.
From that experience, I learned the importance of discipline and sticking to a well-thought-out trading plan.
Definitely can relate. There was even one time when I already hit my TP and I thought that price would continue going up so I put in another buy position, but price dropped just a few minutes after I opened that trade.
I almost cried my eyes off once I went short on Gold, I was a newbie, didn’t know the market could be so volatile, not S/L no nothing. The market experienced the greatest of bullish movements, it wiped my account but did not wipe my tears
OMG so sorry I giggled when I read this. But hopefully it now serves as a valuable lesson for you. Did you go straight to live trading rather than demo trading first?
It often happens in my trading. I take entries to recover previously-occurred loss and it turned out profitable.
I can imagine how tough that experience must have been. Trading can be a challenging journey, and those early lessons, although painful, often shape us as traders.