Hi, Like other people, I either panic when a stock is down and am tempted to sell or when I'm up I like to sell too early to ensure I will keep the profits I have. Are there any methods people use to control these emotions? I know one way is to just not login to my trading account, or just not watch cnbc or look at stock quotes. But in a nutshell, what do others do to fight urges to either sell too early or sell out of panic? (Besides smoking or drinking or what not ) Thanks!
It's just going to take time to gain enough experience so that the emotions bother you less. Also trade with a size you are comfortable with to minimize the emotions. Putting your head in the sand by avoiding looking is probably not the best idea unless you are ok with the shock of a position that has moved a lot while you weren't watching.
Thanks, I agree. If I just don't look at all and the stock goes the wrong way, I won't be any better off. You're right, I think, over time I can learn to control my emotions better.
You could use hard stops (initial stop loss and trailing stops) and then let them do their job. Yet, if you already use stops and have been exiting trade positions prior to the stops being hit...there's nothing wrong with such if you have stats to show that your stops tend to be hit had you stayed in the trade. In contrast, if your early exits is causing a negative impact on your trading results...there's something you have not disclose that's occurring in your "trading environment" (at home or office) keeping you on the edge or walking on eggshells. Simply, fix whatever that may be and you've resolved your problem. Also, use relaxation techniques while trading.
You can not control your emotions or suppress them, if you try to , you become queer or a freak.You may lose the ability to express emotions and continually employ maladaptive practises.If you do that consistently ,you will lose your head. See a skilful Psychologist and read some good psychology books , and you will know what I am talking about.
Most people on the planet are able to control or regulate their emotions and those that aren't able too will get a none desirable or desirable reaction. Just imagine if every person you meet (e.g. restaurant, bank, hospital, grocery store, school, government, police, parent and so on) you talk to wasn't able to control their emotions...everybody on this planet would be in constant chaos...apocalyptic. Therefore, maybe you meant that if you don't learn how to control your emotions or maybe you're talking about what happens when someone suppresses "negative emotions"...there could be an undesirable result for you or for someone else. http://www.psychologyinaction.org/2...trategies-we-use-for-regulating-our-emotions/ On another side...we need to be very careful about trapped emotions from emotionally charged events because such may result in self-sabotage, relationship problems and physical ailments. One of my favorite reads about such is The Emotion Code @ http://www.amazon.com/Emotion-Code-...=sr_1_1?s=books&ie=UTF8&qid=1328975301&sr=1-1 Another good read is Emotional Freedom: Liberate Yourself from Negative Emotions and Transform Your Life @ http://www.amazon.com/Emotional-Fre...r_1_10?s=books&ie=UTF8&qid=1328975374&sr=1-10 That's why I continue saying to traders that have serious trading problems...more often than not the cause is not trading related and most likely there are other areas of failure in their personal lives via the same reasons.
There's a ton of literature out there that you can read and digest. Most of it makes a lot of sense and is very useful. However, reading something and employing something are two incredibly different things. Deep down you know what you have to do, you can try slow breathing, relaxation techniques, meditation, visualization or whatever you want but at the end of the day, if you have rules to manage your winners/losers, you have to follow them. At some point you will tire of nickel & diming your winners and taking outsized, unnecessary losses and you will be compelled to do what is currently uncomfortable (keyword: CURRENTLY) or you will be in another line of work. Seek discomfort (doesn't mean hold losers until you're uncomfortable btw)! In your discomfort is where you will find your growth as a trader and as a person it turns out. Good luck.
I just saw a show a couple of nights ago where military snipers would try to control their fear through breathing. This works great if you have been around a while and you know what you're doing. But if you are new or are struggling, there are no psychological tricks which will overcome a lack of confidence.
Fwiw, and along this same line⦠Couple of months ago I watched a show on Discovery about the brain (I would recommend watching it if you can find it) One segment contained detail on how the military is currently training soldiers for urban combat (being able to assess, and then react quickly, and correctly â without much thought or stress) They termed it; The Big Four Goal Setting Mental Rehearsal (visualization) Self Talk (People speak to their self 300 â 1000 words per minute, keep words positive.., replace bad thoughts with good thoughts) Arousal Control (deliberate slow breathing â long exhales â to minimize the affect of stress/ being scared) (I copied them down in the same order they weâre covered, along with the notes in parenthesis) =================================== They also showed an exercise where a hood was placed over a soldierâs head, a scenario set up, then the hood remove. The solider had seconds to assess and respond (hopefully not killing the good guys) They said this exercise reduced stressâ¦, improved assessing / reacting skillsâ¦, improved reaction times â while also ingraining proper muscle (subconscious) memory⦠No clue how to how one could adapt this particular exercise to trading... But the Big Four definitely could be ===================================== Maybe thisâll help⦠maybe it wonât⦠just thought I would share either way RN
What? Sorry but I politely disagree with nearly all of this. Of course it is dependant on your status and your personality, however it is very possible to situationally control the majority of your emotions through training. Personally, I take pride in the fact that when I began I had a lot of emotion in my trading, but since, with years of practice, have removed much of it. I will agree that it is nearly impossible to remove all emotion from the business of money. Also this has had no effect on my personal life. I maintain long lasting relationships with everyone.