Indeed, failing to suppress emotions is not the problem (it may even be impossible), but letting those emotions have an effect on trading *is*. After a losing trade, I always look at the long term p&l where the losing trade is only a minor down-tick. That way, it's much easier to accept and let go of the negative feelings associated with a losing trade. As a sidenote: since a couple of years I've been much more focused on mechanical trading which makes it even easier to go on to the next trade after a losing one.
Yes, mechanical trading is easier than other forms of trading because it helps let us go of our bias and actually stick to a well working system. Case in point: a mechanical system wonât try and catch a falling knife but the human heart will.
Glad to find a site that has a thread about psychology... Finally. Dealing with emotions was a huge deal for me. Making the same mistakes - not following my method. I have since come to believe that we all trade our childhoods in the markets. I worked with a professional who worked his voodoo and removed several core emotional issues for me- and that was the start of my journey. The key ( for me) is to identify what the core emotions are and where they are to address them directly; then change them from negative to positive. As I clear negative emotions and change them to positive I try and amplify my positive emotions. I now use a process called fast-eft which combines hypnotherapy - EFT and NLP. Google it and you will find 800 free videos on how to use it. Its free and fast.
you have to separate yourself from the monetary value of your positions. Someone else mentioned confidence - that is a massive part. You have to believe you are making the best decision at the time of execution. just my 2 cents 8)
Emotions pshhhhhhhhh pshhhhhhhhh You bottle them up into a ball of rage until you finally snap and smash a whiskey bottle over your brokers head.
Emotions are different than emotional trading decisions. I can be 100% honest and say that every decision I make is based off my plan. But that doesnt mean when I start getting cut up I dont get emotional. I crushed it in June. and in July have given 1/3 of June back. That sucks, no way to mince words. It makes me peeved. But getting small cuts is in the plan. So I would never make a rash decision about changing my plan mid game even though getting chopped to bits hurts the bank roll and emotional capital (short term). So, you have a plan? And the plan works over time? Also -I think that time in the mkt`s will ultimately help with emotional decision making. A person can learn from the mistake of making rash decisions and get tired of the beating. Or they go broke. Its your choice though.
That ability to follow your plan is what helps protect against emotional trading decisions. The downward spirals (revenge trading, overtrading, etc) usually follow emotional trading decisions such as hesitating to put on a valid trade and watching it turn out profitable, jumping the gun because of impatience and the belief you know what will happen next, moving a stop loss further away because of inability to accept a small loss (and getting stopped to the tick only to see price move back in your favor), and so on. The ability to follow a proven plan results in success, without which you lose the ability to trust yourself or the market. The market becomes personified as an evil dangerous thing out to get you.
By finding a broker who let's us trade in hindsight These emotions depicted below are only to be found in EVERY mother's son OUTSIDE of ET. They have been extinct at ET since 2001
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% Good point DR B; not the random comment but the ''over estimatation ''part. As Aussie trader [moving average ribbons] Guppy wrote ;;'' quote never confuse HI probability with infallibility'' Trader 777 made a great point about God [aka Word, infalliblw]does know the future; earthquakes will increase in frequency + intensity, like a womans birth pains''====================================================================As far as being right, well the markets will satisfy even that desire [sometimes right + make money],LOL.I know many trend followers make money on low probability, that fine, but if one enjoys analysis + being right as much as i do, Hi probablity trend are fun , many times profitable, Not that HI prpbabilty trends are the best way to do it, Thanks
Emotions are one part of our minds, and therefore can be controlled following certain techniques. Thinking in positive is one of my favorites. Also good emotional skills are necessary for every trader, since the way a trader manages their emotions will interfere in their trading.