Home > Technical Topics > Psychology > Controlling mood swings (P&L induced)

Controlling mood swings (P&L induced)

  1. I'm sure all traders are happier with profits than losses, but I belive my mood swings are excessive to the point of causing irrational decisions at times. I'm would like to remove emotions from the equation completely.

    Anyone have any success with meds such as zoloft, paxil, etc? I was thinking of givng them a try for a month to see if my trading results improve.
  2. perhaps taking the P&L column off the screen and refusing to look at it until the end of the day would help..

  3. Thats what I do. I only look at my P/L after I'm done trading. It takes alot of the emotions out of the game for me.

    You know if you are trading well or poor, you have to have the discipline to stop when you ar trading poorly based on how you feel you are trading not what your P/L says.
  4. Come into the trading day with no preset profit expectation.

    Trade to trade well.

  5. Exactly
  6. Have you tried any psychology books such as Trading in the Zone? They might be useful....
  7. - perhaps taking the P&L column off the screen and refusing to look at it until the end of the day would help.. -

    totally disagree ... on this

    unless you have a stop in place that will take you out at a preset
    level and then you look at your P+L figure

    and decide if you want to trade again that day or week
  8. I don't have the p&L on screen in real time but I have developed a bad habit of checking after every trade. This I can stop, and I will try that this week.

    I have read "trading in the zone". I know WHAT I need to do and HOW I need to think but I am having trouble with the implementation.

    I first started trading in '94 and I blew out in '97. I think this left a permanent scar on my psyche. I continued to study the market and even worked at the AMEX for 2 years. I just got back in the game last month. April started out good, within 10 days I was up $1k and I'm only trading with a small $5k test account. BUT the rest of the month I kept making mistakes that caused a slow bleed of capital until I ended up -$350 for the month.

    I don;t relish the idea of taking ANY meds but I was thinking it might help me get started faster than working on the issues otherwise.
  9. Well said.
  10. I've been in a slump for several weeks now, and I have just recently decided to remove my open P/L column from my trading platform. I did so because I was noticing that I was making decisions based on the P/L, not based on what the charts and depth of market were telling me.

    So far, it has been helping me. I'm the kind of trader who really hates to have a red day on the p&l. And as a result of this I have a tendency to want to force a semi-setup (i.e., an OK setup, but one which I'd normally pass on if I were green on the day).

    I always have a stop in place so I know I'm not going to blow out by not having open P&L in front of me.
  11. the money you are trading must mean to much to you. get rid of the value of the money you are trading and you will start to lose your fear that causes the wide emotion ranges. its hard to do but you have to develop an attitude that "you just don't care about this money".
  12. I'm no doctor, but I believe that you need to confront other issues in your life. These issues are certainly affecting your trading, and your trading will not improve until you confront and manage personal issues.

    You will never be able to remove emotions from the equation, the only you can do is learn how to manage them (ask any "seasoned" trader, I'm sure they'll agree). Use this equation... 10 x 1= 10, now change the equation...10 x 1 x .5= 5 or 10 x 1 x 0= 0. Lessen or eliminate the result of the equation :)

    If you can't eliminate a part of the equation, add to it!

    My colleague, Osman was "dead on" and I couldn't be more succinct. Focus less on profitable trades, and put more focus on trading properly, you'll be amazed with the results.

    Hang in there "Shark"...one day and one trade at a time!
  13. YYYou mean...You mean, trading is wwwwork? You mean that the rush that the gambling gives is not trading? oh no!

    Michael B.
  14. I think you got it, Michael. :) :eek:
  15. I was listening to Charlie Osgood on the radio today and he had a short segment on:
    Good nutrition reduces violence

    Presenter: John McNamara

    Thursday, 6 February 2003

    A study in the United Kingdom has shown that good nutrition reduces violent behaviour in young offenders. The results were so dramatic the study has been extended to several prisons in the UK.

    The study, led by physiologist Bernard Gesch from Oxford University, was conducted in a prison in Aylesbury suggested raising the levels of vitamins, minerals and essential fatty acids in the diet of teenage prisoners reduced anti-social behaviour.

    The offenders were between 18 and 21 years of age, and committed 26% fewer disciplinary offences than those who unknowingly took placebo pills.

    Dr Gesch says the new study will widen the age group and that he is talking to the Home Office in Britain and groups in the United States about using the results of his research to reduce crime.
    ============ www.abc.net.au
    If vitamins can reduce violence in prisons, then they may help reduce mood swings in traders. This is a connection I have not seen before...

    Gotta-take my One-A-Day....

    Good luck,
  16. I hear lithium is goos for this.

    There are several good antidepressants that have the same effect because they also control anxiety.

    My personal favorite , however, is a handful of Xanax and a six-pack of beer. That leads to the "new math"--i.e. 1+1=6
  17. have you tried hypnosis? several trading coaches recommend this for behavior changes..

    i am a very moody person and i find that going for a workout or a jog each day really helps keep me in balance.. also, i have to be careful to get enough sleep because im naturally a night person..

  18. mary jane :D
  19. Very nice. Balance is definately one of the keys, and having a found a way to find that sets you way ahead of the crowd.

    As for the hypnosis - definatley an excellent way to go, but you have to be open to that sort of thing -

    On a practical basis, the simplist way to avoid these swings is to drop your size right down to where you no longer get angry or upset. Job done
  20. Trade smaller. Mood swings correlate with % of equity fluctuation.
  21. Well that's the way it should be but that's not what I'm finding. I'm trading with a VERY small account already and only trading 1 emini.

    Conciously I can deal with everything but I believe there must be some faulty programming in my subconscious that keeps creeping out once I'm in the market.
  22. I would definitely be open to hypnosis. But how do you find someone who really knows what they are doing?

    I'm 95% certain that all my "problems" are caused by faulty programming in my subconcious mind.
  23. If individual wins or losses bother you, you're trading to big!

    Reduce size until you don't care about any individual outcome. Repeat for months. Then increase size.

    It took me years before I learned not to get upset/delighted with every trade.
  24. ...one of the fundamental principles of NLP is "What can you do with a problem like that?". Meaning learn to make the negative elements in your character work for you. May as well, since the likelihood of changing them is slight.

    IMO intraday trading is as therapeutic an activity as there is. I recommend that you keep track of what you are feeling and saying to yourself as you experience mood swings in trading ("You dumb f**k!" "What a genius!"). In as little as a few days you will have an accurate self-assessment of your character better than any shrink could give you in a year. Then you can begin to see why you are out of phase with the market, which is why we lose. Otherwise, we'd win, yes?

    As a personal example, I am a sadist, and I just love the feeling of repeatedly whacking NQ in a decline, getting my jollies thinking about all the mutual fund holders in stark terror because they can't get out until 4:00.

    Also, IMO your trading account is too small. If you can make it $25K, but keep trading small, then no one trade makes a shit.

  25. 5K "test" account is THE problem.. imho

    testing for what... ? if you can avoid losing? Or can win enough to justify the risk and angst in trading small?!!

  26. I combine profit protection with emotional control.
    After having a profitable trade on a large share size, I will reduce the share size of any future trades so if I take a loss, the emotional and financial impact won't be as great.
    I also stop trading after 2 consecutive losses, if I already have a profit on the day or if it is getting late in the morning session.
    Hope this helps.
  27. I had a mentor who drilled into me that following the system was the greatest reward. It takes years of conditioning(real trading) to become detached from the results...well at least for me.

    Michael B.

  28. a $25k account was my original plan, and I have been thinking about increasing the size of the account but still trading one-lots until I see some consistency.

    Intraday margin @ IB is only $2k for a one lot so that played into my reasoning for the "mini" account size.

    I agree wholeheartedly in your assessment of intraday trading as being therapeutic. The human mind works in strange ways.

    Thanks for the input
  29. ...exactly. It's hard to bleed a $25K account to death with $40-50 losses. The low risk helps you to be dispassionate about the position and observe what in market action causes you to be out of synch, reacting rather than anticipating, exiting when you should be entering or reinforcing a position. Plus, you can scale in comfortably when you're in a winning position.

    You trading stocks or futures?
  30. I'm trading futures. I believe another part of my problem in april was trying to watch too many markets. I was trying to keep an eye on ES, NQ, ZB, EUR, ESTX, & the bund.

    I just analyzed my monthly statement last night. The majority of my trades were in ES and I was profitable in these trades (+$550 after commisions for the month) However on two separate days I took large losses (greater than $500), one in EuroFX and one in ZB.

    Also there were at least 5 trades that I can say with all honesty should have been a minimum of +$100 but instead were +/- one tick because I allowed my emotions to take me out of the trades.

    This month I'm going to focus on only the ES intraday. One step at a time.
  31. ...my betters here may disagree with me, but IMO each market exhibits idiosyncratic behaviors which give you unique edges if you specialize in just one issue day in and day out. IMO you get an intuitive feel for the meaning of wiggles inside a bar when you watch every bar every day. Some people have posted successful real time day trades here looking at multiple markets simultaneously, but I suspect that they can pull it off only because they are extraordinarily perceptive, bright, and quick.

    Good choice, ES, although I prefer NQ myself. Have you read Jack Hershey's stuff in all his personas? IMO his approach to ES has a lot to offer, once you understand what his somewhat delphic assertions mean. An exercise in gestalt.

    You using system(s) or trading discretionarily?
  32. I agree with faulty programming. Sometimes you know exactly what to do but emotions take control.

    Faulty programming should be better defined: It's a battle for control between your neo-cortex (conscious brain) and the limbic system/amygdala (emotional brain). The limbic system has more pathways to motor control and can preempt conscious control when needed. eg. If you see a lion, you'll turn around and run without thinking about it first.

    The market is the ultimate hypnotic device (better than TV) and will tap into your most primal, basic emotional patterns. This is your limbic system at work. The so-called subconscious, but it's just emotional memory and learned responses. No voodoo, just a different language than conscious thought. Your limbic system has learned a few bad habits.

    Here are a few things:
    1. Finding the source event that taught your limbic system to behave this way is of dubious value. While you might get cognitive satisfaction, conscious understanding has no effect on limbic memory responses. As we all know, emotions trump.
    2. NLP or hypnosis might work if you can find someone good.
    3. Cognitive Behavioral Therapy is likely your best bet. A CBT person can design a strategy to target the behavior directly (and maybe prescribe some Paxil). It's possible you have a minor brain disorder, or psychological trauma, or it could be just a learned response from your earlier trading blowout. Regardless, you can re-teach it.

    The limbic emotional brain does not know the difference between reality and imagination, so it's possible to teach your emotional brain through repeated intense emotional imaginings. That's why NLP and hypnosis works.

    I spent a year uncovering my source events which only helped marginally. I learned that the behavior and pattern has to be hit directly to change it.

    The advice given by others here with more healthy (un-traumatized) emotional brains is good, but not powerful enough for everyone. Logic and willpower can't overcome the really strong emotional patterns.
  33. I'm trading discretionarily mainly using Joe Dinapoli's trade plan as described in his book, "Trading with Dinapoli Levels" I've studied these methods for a few years while not trading and I strongly believe that it is a solid trade plan.
  34. Trade 1 market only.

    What's your sugar intake? Sugar greatly affects my moods (I get very depressed and scared after a big sugar binge), so I do everything I can to avoid eating it as much as possible.

    Good luck.
  35. ...thanks for the reference. I have't read it, but I regularly throw up a 50% Fibonacci retrace over large moves. If it coincides with additional probable S/R, it often works.
  36. I agree. I have simiar effects from sugar.

    Michael B.

  37. Processed sugar and white wheat flour are probably the two worst foods anybody could eat.

    I'm very careful with my diet so that's at least one area I can scratch off the list.
  38. That what I did. I just care about not taking big losses or at least cut your loss well if you get a bad day (and everyone will have BAD FUCKED UP days).

    A pattern I went through if I started taking hits is that I would start sizing up into stupid trades thinking that I have to make this money and have to take this chance. It becomes a gambling induced vicious cycle.
  39. %%%%%%%%%%%%%%%%%%%%%%%%%%%

    Pills idea sounds worse than white bread & sugar ;
    recommend more research & documenting it
    & less intraday p& l observation.:cool:
  40. medication is not the best answer imo

    Learning and REGULAR PRACTICE of basic relaxation techniques will help.


    There are other articles there that offer practical techniques for maintaining a neutral mindset.


    Ultimately it comes down to you, YOU must make the decision that your current beliefs are not perfect and new ones might serve your goals better.

    Then it is a matter of implementing these into core beliefs.

    If you choose this path, it is possible to cut many consecutive losses with no pain and take large winners with no joy (many want to keep this). And suffer no stress regardless of what the market, or your account does.

    Many of the best in any field realize that their performance is a result of where they are in their journey, and as a result success or failure is nothing to be celebrated or condemned, instead each is a valuable part of their journey. They have no control over individual success or failures, any particular success or failure is a moment in time that was always going to happen given their being in that moment. They have no reason to get excited over experiecing a winning a trade.


    A core belief : that individual trades don't matter, it is only in the long run after a series of trades that success or failure will be known.

    This might help reduce stress over individual trades.

    You may already 'know' this or 'believe' this, but it needs to be a CORE part of your identity. When it is you will find it very hard indeed to care about the results of individual trades.

    You may have confilicting beliefs, you must empower the ones relevant to your goals. You have the tools. It is a choice.

    An effective way to transpose your joy/pain is to link it to flawless execution, rather then trade or monetry success.
  41. Everytick, Thanks for the links that looks like some interesting info. I agree that relaxation techniques are a better longterm solution than meds.


    Today I graphed my Equity line from the first trade I took on March 17 till Today. This produced some VERY interesting results.

    It seems my profits peaked on the 14th at +$900. then I didn't trade again till 4/22 when I F'ud up big and took a large hit trading EuroFX Futures. I lost almost $700 that day and it seems that I never recovered as the equity line slopes slowly downward from that day.

    Another point I noticed was that prior to the 13th I was strictly applying my trade plan while afterwards I was being much less strict. I see now that there were quite a few days where I wasn't following my plan at all.

    I have been reviewing my trades everyday but for some reason looking at the info in this way really provided some clues into what has been happening. I think this info will help me get back to trading my plan and to consistent results.

    Thanks to everyone for all your help.
  42. Anyone try smoking some buddha before trading?

    When I get high I usually start doing research and wanting to trade. Or munchies and have sex, but that's a diff topic.

    Seriously though, I wonder if on very slow days it would be a good idea.
  43. you've got it. You can't make the right decisions when you are emotional. Like clock work the market will kick your ass everytime you do this. And the worst thing that can happen is you actually make money when things are going bad and then you've just reinforced bad habits.

    The key is to just stop. trade out of whatever you are in, get flat and stop trading until you're mind is fresh. That could be an hour, a week, even a month.

    The best traders never go into that emotional state. Assholes, I've read about these mindless robots and am extremely envious.

    The good thing is that you can still make a living at this keeping your emotions at a minimum. Once in a while, but identify when it is happening and stop.

    good luck
  44. Not necessarily true,

    They just know how to identify that emotional factor quickly and control themselves. It's HARD cause I sometimes see that I'm getting emotional but just CANNOT stop myself from that one stupid trade. Good traders also can quickly accept a bad day if they are having one and just concentrade on controlling it.
    Train your mind to do the same. If you are taking hits, dont go into a spiral of stupid trades thinking you HAVE to make money.

    I got screwed badly into deep red this morning in the first 20 min. I said "fuck, guess gonna take a loss today, let me just nick at it a little". Ended up making some itty bitty cash but I'm just satisfied I did not lose anything.