Yeah I've been doing the meditations and dissociation exercises, and my state of mind while in a trade these days is way better than a year ago. Just thought maybe there're even better ways to speed up the process of mind conditioning. Yeah I bet losing 95% of the account would take the emotions away pretty quickly, haha
I agree that Steenbarger is good, though you may benefit more from his articles than his books. Douglas's Trading in the Zone remains the core work on the subject. But, as someone else pointed out, you have to be careful to distinguish emotionlessness from repression and suppression. In a nutshell, most beginners want to trade "intuitively" from the beginning. But since they want to get to the endpoint without going through all the intermediating steps, they necessarily trade emotionally as well. Thus they want to trade without emotions while trading emotionally. Douglas short-circuits this nonsense by suggesting that if the trader adopts certain beliefs, emotions won't enter the picture in the first place. Thus repression and suppression become irrelevant. He can trade rationally, objectively, and calmly. But unless the trader can adopt those beliefs, he finds himself in an ongoing internal struggle. It all begins with a consistently profitable strategy (and Douglas explains how to develop one). Without that, the best you can hope for from mental exercises is to trade a bad system objectively and calmly. LC
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Several steps to "becoming emotionless". Although I would say this a weak concept created by gurus and marketing guys. Its quite impossible... I better concept is from gambler to a trader that runs a business. The first step is you realize the numerous beatings you have taken were due to undisciplined trading. The second is creating a business plan that dictates strict entry, exit and money management metrics. People veer in two direction. They find it impossible to follow a plan and eventually blow out. They are just born gamblers....trading is not for them. Or they enter a period of enlightenment. This trading enlightenment is akin to "becoming emotionless" because gains and losses dont matter. Following the plan matters. God trading to you!
"The first step is you realize the numerous beatings you have taken were due to undisciplined trading. " assuming you have a system with an edge. if you don't, the beating might just be because your trade selection/system sux. but it is true that most beatings, ie big losses happen because people don't use discipline, panic, emotionally remove their stops cause they just "know it will come back" etc. but yes, in my trading, after rigorously going over my trades (especially losing), i found that ALL my big losses, and many of my losses in general, were not the result of system error, but of user error. "The second is creating a business plan that dictates strict entry, exit and money management metrics. " yes. my rule is this. on ALL trades, ( i mostly intraday trade index futures), i set my stop and first target ON entry. and my stop levels are all prewritten out for different setups. i have just over 20 setups, but the bulk of my trading is about 6 of them. the rest are relatively rare. and i NEVER move my stop -- OUT. i can move a stop in, or prematurely exit a trade based on wacked market internals, etc. but i can never move my stop out. ever. depending on the trade setup, i can be discretionary on my 2nd or third target (while in the trade), but i can never be discretionary with my stop. no matter who you are, you become far more emotional, and far more subjective, once you are in a trade. naturally, because you have "ownership" of what the market does now. you are long, so you will be naturally biased as to seeing the market action as foretelling a long vs. if you weren't in it. i think this is universal. otoh, some will be subjective in the opposite way, trying to talk themselves out once they have met a premature target, out of fear. fear, panic, euphoria are all dangerous. but imo, euphoria is the worst. "People veer in two direction. They find it impossible to follow a plan and eventually blow out. They are just born gamblers....trading is not for them. Or they enter a period of enlightenment. This trading enlightenment is akin to "becoming emotionless" because gains and losses dont matter. Following the plan matters." exactly. never concentrate on the money (on a trade to trade basis). concentrate on your setups, entries, exits, etc. if you do that, and have a logical system - the $$$$ takes care of itself. if you concentrate on the money, you will act irrationally, either through revenge trading (to make back the money you lost last trade), or greed (not taking your targets cause you want the big killing, etc.) emotion is GREAT. that's because the VAST majority of retail traders are highly emotional (imo) and also use lagging indicators. this is great. since futures is a zero sum game, you can count on these people constantly providing dollars to be marked to market into your account.
Calibrate your trading system for a 5% max. drawdown and automate it by setting up an ATS. Let it run with $5K. Then, you only have to stay away from manual order entry. Practice this for a half a year test period. If the system is consistent with backtest results in this test&practice period, deposit some more cash on your account and increase order sizes successively, so that a potential big drawdown does not push you under water (you only loose your profits but not the amount deposited). This method works and does not even make you emotionless. torel