As a newbie who’s just starting to use real money, I’m curious as to how my fellow babypippers handle the psychological highs and lows of trading, especially when starting out. I’ve read about people meditating to remain in the right mindset, enabling them to stick to their strategy’s inevitable less-than-good periods. What else do traders do?
Personally, I’m quite stubborn by nature - I’m willing to accept I’m wrong, but if I’ve put a lot of time into something I won’t just give up on it without a fight/good reason. That’s why I’m sticking to my plan, despite the fact it’s not been doing too well right now (in fact, the first week I started live trading, my systems turned in the worst results ever…typical!).
What do you do to keep those nagging doubts at bay???
Have confidence in yourself and your plan. If you are having doubts then maybe you should not trade live just yet. You also don’t want to be over confident either.
My best suggestion is to evaluate how you deal with other aspects of your life. Do you get upset in a traffic jam to the point of cussing at other cars? Do you get over excited by new things? etc,etc… Believe it or not the mastery you have over your emotions and yourself in your normal day to day life will come out in your trading activities.
Practice remaining calm from day to day. Don’t let yourself get too angry, upset, happy, etc, etc…
It takes a very special type of person to handle trading. Just as not everyone is cut out to be a doctor or a fireman or whatever, not everyone is cut out to do this. Your success will not depend on your IQ as much as your EQ ( Emotional Intelligence)
I’m not quite pulling my hair out yet. In fact, I’m expecting to lose money - I’m putting my first-week experience down to bad timing. I was just wondering what other babypippers do to stay balanced and focused (I’m sure I’ll find myself in worse spots than this along the way).
I’ve tried the whole meditating thing and it doesn’t really do much for me (perhaps I’m not doing it right). I’ve also tried some visualisation techniques (visualising how to handle winning trades, as well as trades that turn against you, a technique I’ve read about) and perhaps they’re working because I’m not having any problems sticking to my strategy (pulling the trigger, bailing out) despite my initial loses.
Hello there i want to ask you do you have success trading candlesticks?And do you use any indicator to confirm their signals … because i also trade with them and i`m very very pleased of results i have never been so clear in trading.Thanks
Your thinking too much…like it was mentioned early in the thread, some people are not cut out for this…You need to be able to laugh it off when u lose money… Thats why you play with money that won’t hurt you.
Don’t lose your house or car over this, start small
Aim small , Shoot small
JUST Remember - You are trying to do what no one can do PREDICT The future… GOOD LUCK
Ok you are right for some thing BUT!If you laugh when you lose money then you wont need to do something about this.You have to lose some money just to say"Hey i have to do something about this and not just to lose money i ant to win money and i will make it "and then you start reading a lot trying to find the way how to change this!But yes you dont have to cry when you lose money … in this business and in life we always lose money but the most important thing is to lose 2% and win 98% of the time."JUST Remember - You are trying to do what no one can do PREDICT The future…"Who try to predict the future?Traders just analyze the market.And remember you have to learn and read every day something new about this business to improve your skills and your trading behaviour.
Yea, but the thing is YOUR going to lose money regardless…and there is nothing you can do about it…yes…you can learn from it, but all the indicators and systems you put in place won’t help you…so what i was saying is …
You can’t dwell on it…you have to shut down the Emotions and move on to TRADE another DAY…
I always love it when i hear people say that you have to eliminate or shut down your emotions.
Unless you are a Vulcan or a machine, you can’t just shut down your emotions. We are human beings trying to figure out this world of trading. The only way anyone will be able to do that is by accepting and acknowledging the emotions and learn to trade effectively in spite of them. Emotions are always there regardless of the type of system you trade. The difference is finding the right system that best matches up with your personality so that it’s easier to deal with the emotions during difficult times.
You should realize that some of the best traders in the world are very emotionally charged people. They hate losses and get totally pissed off when they have losing trades. That’s fine, get pissed off. It’s OK! The difference is in how they manage and channel that anger into effective trading habits. They will take that anger and use it to drive them into a relentless pursuit of trying to figure out what went wrong so they don’t repeat the mistakes.
How do you deal with the emotions then? Some helpful hints might be:
Use a system that you have tested exhaustively (hundreds of trades worth)
Be aware of what you can expect from a statistical or mathematical point of view, so that if the system falls outside of those parameters you can objectively recognize it.
Do not trade with money you cannot afford to lose.
Trade very small position sizes and gradually move up
Manage your expectations. Go in with a goal of testing and executing a system with consistency rather than a goal of x dollar return.
Yes this is excellent advice. In my �ther’ life outside of trading I am a psychiatrist and used to coaching people. One very effective approach is called the solutions focussed approach which as its name suggest focuses on solutions not problems. This is one way of dealing appropriately with emotions and to dealing with the nuts and bolts of developing a trading system. Brett Steenberger in his books on trader psychology uses this (in conjunction with other things) and it is well worth a read
For me it has nothing to do with shutting down your emotions or becoming a cold machine, I just try to not get over joyed by my wins or get mad over my losses. I treat every trade as the other did not happen.
Perhaps you can help me Tony, considering your profession.I have spent a considerable amount of time backtesting a method that gives a 75% success rate on a monthly basis i.e 75% of trades are successful.I’ve been trading the method for four months live with a mini account and my account shows a tiny profit. My problem is this, I convince myself to NOT take a trade even when all parameters are in place and then take a trade that is marginal with obvious results.Today was a perfect example two trades were presented meeting all my conditions but I didn’t take them,for a number of reasons, and guess what both trades hit profit targets after 4hrs.Why do I do this, I have a feeling that this is a common problem.
Thanks for your input. Yes, I’ve been reading and researching for some 2 years, and I’ve tried and tested several different systems over the last 3-6 months - all of which work to varying degrees.
As for the “losing money” thing, I simply meant that I’m expecting to lose money occassionally as an inevitable consequence of trading. At the moment, I’m quite comfortable with this thought, I merely opened this thread as a discussion point - I expect things to get tough from time to time and wondered what other traders do to handle the ups and downs.
I’ve read some of Bret Steenbarger’s material and agree that it’s helpful. And like I say, the visualisation techniques I’ve read about seem to be a positive influence - visualising succeeding in the long term, visualising managing a winning trade so that you don’t exit early, visualising a bad trade and getting out when you need to, etc. It’s much like the technique sportsmen and women use to optimise their performance (i.e. Beckham visualising taking freekicks, Tiger Woods visualising his swing…).
Of course, if I could take a freekick like Beckham or swing a club like Woods, I wouldn’t need to to visualise trading.
Ok then by the sounds of it you have done much more preparation than most. Still important of course that you always contine to keep your losses under tight control. I use the "can i sleep at night"indicator!
What most people do is focus on the problem. The more effective method is to focus on the solution. Hence get in touch with all that is going on when you do take the trade even if you hesitated. What were you thinking, feeling, what was the situation how were you physically, what had recently happened in your life, trading etc. In this way you are trying to build the success picture and reinforce this mentally. You are NOT looking for the reason that you put on the trade as there isnt just one reason, rather you are trying to build in all the possibilities that may contribute to the outcome you want. Ultimately this knowledge may remain implicit yet can be just as powerful in leading to new behaviours