Emotions are part of us as humans. We can't take it away, nor erase it from our system. But we can control it. Well, this is one factor that affects us all as traders. How well have you been able to curb your emotions while trading so that it doesn't kill you?
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I developed a good understanding of the effects of emotions in trading through a process of analysis, intellectualization, introspection and detachment until I became more aware of its manifestations, its use. Then I strarted working on ways to limit its nefarious effects. Ways such as limiting monetary exposure, having contingency plans, analyzing price, maintaining perspective, intellectualizing, emotional deconstruction, distraction, remembering the original thought process behind a decision before the stimulus occurred, actively controlling thoughts and mental imagery, changing the stimulus by changing perspective. In general, emotions are used to exploit weaknesses and manipulate individuals. The more aware and detached observer comes to realize its use in all aspects of life, from movies and all sorts of artistic expressions to interpersonal relations, politics, marketing. Everything, everywhere is filled with it until it all seems like a great, big circus of pretence; of clowns acting out their emotions, manipulating and being manipulated. On my best moments I can witness the external stimuli (âmanipulation attemptsâ I call them, with obvious intent!), from a spike in price to a news report to a romantic comedy, and control how it affects me. ras72 âIf I don't understand what someone is saying, it means he doesn't know what he is talking about.â A ras 72 original realization, April 2014, reading a post on the EliteTrader Internet forum. Feel free to use it. Acknowledge its author.
Of course we can. It's difficult, but not unachievable. Just depends on how much you want to avoid fighting yourself and the market for the rest of your trading life: www.elitetrader.com/vb/showthread.php?t=38333
Yes, there are techniques to not only curb, but possibly transform negative associations into positive, which consequently help a trader.
A lot of getting over the emotional part of trading, in my opinion, just comes down to pain. I'll use sort of a personal example, but I think it makes the point. Several years ago I ended a long term relationship. Shortly after I was diagnosed with cancer and then as a result of an operation contracted MRSA that got into my leg and hip. It was a mess. During that time I discovered that pain pills made me feel wonderful - it not only got rid of the physical pain I was in, but it helped substantially with the emotional pain I was dealing with too. When the physical pain was gone, I was still using the pain medication for the emotional pain. I ended up a wreck. Lost everything, nearly become homeless. I finally got clean and sober on December 7th of 2010. I finally got sick of screwing myself over. I'd tried without success a few times before, but the pain threshold obviously had not been hit for me. I hadn't hit the point of saying "I'm never going back to that bullshit again." People want an easier answer, both for addiction and trading. But for both of them, I think that is the answer. Some people are lucky to have a lower pain tolerance than other people - but in the end you have to just hit the piont of saying "This is BS, I'm done doing this to myself" Brandon
Thanks for sharing Brandon. Powerful stuff. Yes, pain is the solvent that cuts to the core, but like the onion their are many layers along the way.
Personal philosophy. Within a random and unknown environment, one must logically rationalise any expectation of future performance and outcome. One should never participate within a game of chance, whilst harbouring thoughts of only a positive nature. One is required to lose everything if necessary, however, a systematic approach should be maintained at all times.
emotions are part of the game , accept it and deal with it... its easier to accept that emotions do come up then and now , accepting it ( u are human after all) will actually help u to identify when u let the emotions controll your decisons , which will help u to take a step back as soon as it happens , and get back to your trading plan.... like in this graph.. whereas on the extremes , you should lose/risk/trade less to stay in the game , while on the mean u should milk tha market... this is normal human behaviour..... ups and downs ... right ? it cant go always up (manic) or down (depressive).... now thyself