How do you guys look at your wins and losses? When I’m winning I feel like I’m on top of the world and I start thinking about what the “future” holds for me… But then when I start losing, especially if it’s a string of losses, then I start berating myself and just feeling really BAD.
What kind of mental gymnastics should I be doing to help avoid this? Aka do you have like some metaphor or like POV that you use to help you deal with winning/losing?
It’s very easy to say something cute like ‘dont treat yourself so bad’, or ‘dont take losses so personally’.
But it’s very hard actually not to do.
I used to beat myself up endlessly over losses, but it’s important to note that by taking it so personally you are actually reinforcing more losses.
Remember in a state of stress, we are cutting off our own executive reasoning powers and any possibility of getting into flow state.
Putting it another way, beating yourself up only leads to more poor decision making.
The book ‘What to say when you talk to yourself’ may have a few techniques that help with this type of problem.
All of us have gone through that. Eventually it will be reduced gradually as you go. You will know that once you gain confidence with the strategy that you have. My definition of confidence is not a blind trust to strategy. It is a calculated trust that enables you to know what to do on a winning and losing trades. It will help a lot if you plan the exit right before you open the trade.
I think what you say is interesting about confidence.
What helped me alot was actually digging my way out of a trading slump.
I’ve probably done it ten times over the years, when I was almost out for the count but pulled it back - that gives you a lot of confidence
While losses are never liked the sooner you truly accept them as nothing more than a business expense the sooner you will fly in this game.
And will be redundant in a few years time if and when most retail traders use EA robots. But if that is the future reality the market will dry up owing to lack of contra opponents… Maybe there will only be one global currency - namely Chinese Yuan.
hello @ponponwei its a fact that when you are trading you will incur losses and gain profits simultaneously. No trading strategy is pure profits. But yes, losing a part of you capital is stressful no matter how much profit you gain even a tiny bit of loss causes stress.
The best thing you can do is stop being emotional remain neutral even if you earn profits.
Its a saying that when you being trading you should leave your emotions at home.
@ponponwei thanks for candid analysis of the emotional process of dealing with losses strings, I’ll push a little metaphysical : I go through the mill exactly as you describe including elation of rosy future vs deflation and self doubt. My way to deal with it is not a mental gymnastic, as in an exercise to try and fix it and make it feel better (attempts to obliterate the emotional self could only generate inner discord) but more an acceptance of it as is, and the understanding leading to trust in its inevitable passing… the emotional body’s dance comes, passes and goes endlessly, it does not stick, it does not belong, it’s an accessory that we wear. While the discomfort is real wave bye bye in readiness for the next. Still a thoroughly green newbie and certainly never thought I’d be a newby for so long hehe but I suspect —at least for my path— that developing an edge as a trader hum speculator centers a lot on that realization. Accept as part and parcel of the game, dare I say welcome it :-/ since I want to get good at this, in the full knowledge that it does not stick, wash your hands and brush your teeth, you do not have to move on, it just does. FWIW.
Hi, where I’m coming from is the EA’s becoming so sophisticated, and available to all, that you get 90+% of traders taking the same buy or sell positions throughout the trading day. Hence only 10% opposition.
It escapes me what it is that prevents that happening - something to do with the inability of the robots to cater for all scenarios?
I think it’s healthy to not base your emotional state on your trades. The market is constantly up and down. It’s going up and you’re profiting 8% so far, and you’re feeling great!
Goes back down to BE, and now you’re in the gutter.
It’s cliche, but happiness is a choice, for the most part. Yeah, cliche for sure, and it sounds ridiculous. But, just because something is happening, it doesn’t mean you HAVE to feel a certain way. Sure, losing money sucks, but we don’t have to interpret the loss as invalidation or as our dreams going up in smoke.
I’m trying to detach myself from my trades as much as possible. It’s not easy. 100% detachment is impossible, but I think 80% is doable.
My goal is: winning money and losing money should feel the same–as little emotion as possible.
But don’t think I don’t fantasize about my future. And each losing trade means I have to stay at my job even longer instead of driving a porsche (not my goal–just an example haha). That kind of stuff is still in my mind. But I have to fix it. And I do that by becoming a better trader to reduce losses. Examine my losses and adjust how I execute my strategy. Not change my strategy, just execute it better.
Read “the disciplined trader”, for real. It’s a real eye opener. Just a suggestion.
I have done the same. “the disciplined trader” says it’s due to fear. We’re scared to repeat the loss, and the fear interferes with us seeing the opportunity correctly. Therefore, we open the position haphazardly, and incur further losses.
This is definitely a principle that can be applied to other aspects of life.
You said it perfectly.
Ironically TRYING to control the emotions, only makes things worse (anything we TRY to do often ends in disaster).
I’m not a smoker but I am aware that the terrible images on cig packages only make the smoker smoke more - incredible that may seem.
They get so stressed at what they are doing to their health, what do they do? Light up a cig.
And in trading, TRYING to handle your emotions when losing, often reinforces them - as Einstein said you cannot solve a problem from the same level as the problem (at least I think it was Einstein).
For me, what helped was a combination of reducing the importance of money in my life, developing more confidence in myself, many many instances of losing trades (I became numb to them) and recognising that the patterns that I use, do actually work.
I think many of the problems beginners face emotionally is they simply do not trust technical analysis - they want to believe it - but all their previous experience tells them it can’t be that simple.
When you finally have a solid trust in your method, rather than a blind hope, emotional trading trauma tends to disappear.
Unfortuantely many are out the game before they ever get chance to experience that.
To be honest, if you backtested your strategy and it works, chances are that it can work in live trading. However, when you backtest, there is no emotion. Backtesting is purely mechanical. So, it works. Our emotions are the only thing that keep us from profiting from the market.
I realised that the other day. The only thing stopping me from turning to forex into an ATM is…me. Just me. That’s it.
All the clues are there. I look back at the EUR/USD for the past two weeks. There were so many entry signals in my strategy, I probably could have profited 20% of my entire account.
The problem is ME!!! Just me. Sure, there are false signals, but SL management would reduce my risk to less than 0.5% of my account per trade if not breaking even.
I just have to keep improving and learning to follow my strategy. Be flexible to understand what the market is telling me, not what I want it to be. And then, follow my strategy mechanically.
That’s it.
You had an epiphany, it’s you stopping yourself from making money, NOT the market. That’s a major leap forward but…on its own not enough.
The problem now is that you may start going down all these rabbit holes of trading psychology, devouring every guru from Brett Steenbarger, Mark Douglas, to Art Kiev.
This is where a lot of traders with a year or more of experience get to, the problem is that trading psychology becomes the new holy grail.
I love discussing and reading about trading psychology, that’s because I love the theory of things as well as the practice, but when all said and done all you need to do is grow that discipline muscle.
You can’t be disciplined in trading and NOT in other areas of your life (not saying that’s you).
But how you do one thing, is how you do everything else, if other areas of your like are not disciplined it’s highly likely your trading will be the same.
What is discipline? It’s showing up and when you don’t want to. It’s feeling the fear and doing it anyway.
The first step is recognition that YOU are the problem, the second is finding an appropriate way that deals with it.
And many traders, who have recognised the first cannot for whatever reason get to the second.
I agree. I noticed I have more of a desire to be punctual. Not necesarily to go anywhere, but to leave the house when I say I want to leave the house.
If I leave my house before 6:00, I’ll be on time for work. I always try to leave at 5:45, and it never happens. I always leave at 5:50-5:55.
I’m connecting the dots between my trading discipline and discipline in general. Not closing a trade when you want to, but when your rules say to.
Not leaving the house when I feel like it, but at a predetermined time.
It’s difficult to not feel bad when things aren’t going well, and of course there’s that elation from a win - especially a big win. (I trade commodities as well as FX and I’m still high from making $176.50 on a single trade in crude oil last week)
The way I look at it now is that my original capital is just a small part of my capital today. So I’m working with “free money” - the profits that I’ve made. If I lose a little free money, I can shrug it off.
You can’t always win, but as long as you win more than you lose in the long run, don’t sweat it.
When we’re winning, the feelings cannot be explained in few words. When I’m losing, it make me feel bad, but I say to myself that this is part of life, and it helps me and give me time to think in other way, to mitigate and minimize my loses.
Pros are not always winning, they also plan to lose.
I think the best way to deal with it is to backtest and forward test your strategy more. What I mean by this is, if you already backtest and forward test your strategy long enough you will understand how is the performance of your strategy. If it’s profitable in the long-term, then when you trading the strategy, you don’t need to think about anything, even though you are on a losing streak, you know how is the performance in the long run. You don’t need to worry about losing because you have tested it before and it still gives you profit at the end of the day. So it boosts also your confidence and doesn’t let you become overconfident when you’re winning, because you also know losses will come to eat some winning gains. And when it’s not profitable in the testing phase, then you need to work on it. So on the live phase, your job is just only to follow your system without thinking about anything, just follow the system and let the system do its job. And with this concept, you will remove all the psychology problems in winning and losing
I don’t think backtesting is the panacea for all psychological problems.
Backtesting will determine if your system sucks, and should try something else. It will prepare you for what to expect in terms of wins and losses.
It may even give you some confidence, but it will not solve your fear of losses and or greed when you are doing well.
That only comes with experience, for some, it will be sooner than others. But if you keep your losses small enough, at some point they’ll lose their importance to you,
Nah you didn’t get the point, please re-read the answer.
I see no harm in buying EAs if they are for the good of a trader. Even I keep looking for profitable ones on different platforms and forums. You never know what works out right. Does anyone here create their own EAs?