Just curious... How many of you guys have developed a detachment from money, or remember back to a time where you had an attachment to money and how before/after has affected your trading. How has it affected your day to day lives outside of trading?
I have FAR more attachment now then say 10 years ago. The issues are the near 10x amount i now manage and that i'm 10 yrs older. The amounts of money won/lost mean a lot in terms of purchasing power and the fact that i am older means less time to make it back if i were to lose.
I remind myself that money has no intrinsic value and is the shared illusion that gets most of us out of bed in the morning. Then, I chuckle and consider myself effectively, detached.
I played a stock game while the markets were tanking in 2008-2009. It gave you 5 million to play with, and a list of companies you could buy and sell. I set up 4 separate portfolios, with a million each. Did one dividend, one all autos, one all game developers, and one with picks, like unusual volume, and chart structure that I liked. Been awhile and what I remember is that, I didn't have a loss in any of them. I wasn't trying to win the contest because I started it long after it had begun. (came to find out that the winner had set up 999 accounts and somehow I guess this increased his odds of winning the contest). In three weeks my guesstimate portfolio was up something like $450,000 or thereabouts. I'm trying to think in those terms now, with my money, and it ain't the same. Hard to make believe it's a game, but I think detachment from money is one factor in trading better, but I'm not able to figure out how to be detached.
My trading account is completely detached from reality, a small mistake can cost me $10,000 easily. Luckily i dont make more than 3 or 4 of those a year I also have 5 figure up and down losing days on a regular basis, doesnt bother me at all. Losses are an expected part of the trading business, you even have to factor in some losses due to mistakes every now and then. However in the real world, where i buy real things (as opposed to electronic contracts), even wasting $20 nags me. I recently spent $300 dollars on a piece of furniture which im not 100% happy with the look of (now that i see it in place in my home). As i self assembled it, i cant really return it now. I could just get rid of it, the cost is peanuts compared to a typical losing day in the markets. But no, im going to keep it for at least a year to justify the money spent. At the same time i have no problems spending $500 on a night out if i want to. All very confusing really
Thanks for sharing that. I been fiscally irresponsible. Sweat trades, down a little head spin time. Even the ones I have a good position on.
It's called mental accounting: http://www.washingtonpost.com/wp-dyn/content/article/2007/05/19/AR2007051900316.html
I am the same except (as per my nick) my big down days dwarf my big up days. a serious lack of discipline coupled with some bad luck, and paired with my inexplicable detachment from reality of my trading account has earned me the trading stupidity badge given out to those who lose >$100,000 on a given day. i've got 3 such badged, and if you throw in losses over $50,000- well, the number is large enough that i have no idea how many- probably north of 25. Lest anyone think this is on a million $ account. sadly- nope. % losses over 25% in a day are about equal. when the dax went free fall through my stops earlier this month, i lost >70% of my account that day. i didn't even think that was possible. leverage + stupidity + jumped stops is a bad combination. i realize i will get the much deserved abuse disclosing what an undisciplined fuck up i can be. i talk about it in this thread because, although it is real money, i tend to treat loses like it's a sim account. i grew up in poverty and i'm very frugal with my purchases. for example, i've like a new car but i've never pulled the trigger to purchase one because i know it's a bad investment and can't justify it. yet.... i'll blow $10,000 out of my account in 30 minutes on pre stupidity. afterwards i will think of what i could have done for my family with that money and beat myself up. but i continue to be an idiot often enough to keep myself from being truly successful. the only thing i can pinpoint beyond the insanity of it is that i know i can always make the money back. it's not 2 steps forward, 3 steps back. more like 9 steps forward and 1 ridiculous step back. i am positive about 90% of my trading days. yeah... too much information. but i would love to hear how others deal with this. the linked article was interesting...
Somehow, what helped me is attachment to money, but in the sense of healthy greed. Because my main problem with trading was fear (besides absence of skills at first too, of course ) and seeing trading working for you and feeling you want to trade bigger and make more because you are confident it works really helped to move ahead. Everyone's case is individual.