Plan for dealing with Emotions

Discussion in 'Psychology' started by buccas13, Sep 3, 2010.

  1. buccas13


    Hi Guys,

    I've spent about a year in fx markets. No prize to guess, I'm still going thru the struggle period. My current problem stems out of my fear to trade the my setups.

    I've read books by Mark Douglas, Brett Steenbarger, Van Tharp. While I'm reading the books and just after I complete, I feel I'm ready to take ont he world, but come trading day, I'm turn out to be a P***y.

    THen when I get out of trading environment, I realise all the things I fell prey to my negative thought patterns. For those evry moments, I'd forgotten all that i head read and mental preparation i'd done.

    Do you guys have a plan to deal with emotions? The moment one realises that he is falling prey to it, he just uses the plan as a flush to immedeatley remove thos eneagtive thought patterns.

  2. wave



    truth hurts, but it also sets you free"

    I agree.
  3. What exactly are these negative thoughts? what triggers them? be specific.

    It usually turns out to be one the following issues: lack of trading capital or not enough trust in your edge/strategy.

    What you can do is work on the rootcause of these negative thoughts and build up stronger positive toughts.
  4. Thats just a byproduct of not trusting your setups because of all the failure in the past.

    Really all you can do is take the setup, have a target, place a stop and walk away. Unless you plan to manage the trade in which you just follow those rules also. No magic here.

    After a certain number of trades you can analyze and see if your setups are any good.
  5. LeeD


    Remember "the exercise" in Trading in the Zone? Try thinking of your trading as an exercise. The aim is to enter and exit trades in a disciplined way as your system dictates.

    If you accept the potential loss as "education cost" then entering a trade is much easier. Given it is an exercise the emotions associated with trading should also be quite different. For example, if the stop is hit and you close a trade at a loss, you should feel good about it because you executed the stop in a disciplined way.

    Remember, becoming disciplined is one decision at a time... and every time you make a disciplined decision you are one step closer to "the zone".

    Try keeping constant attention on your empotions starting just before you begin trading. If you you observe you are not in the right state of mind, have a break and try getting back into the care-free state of mind. Remind yourself it's just an exercise. If you are still agitated, have a longer break, maybe stop trading for the day. If you are not in the right state of mind at the start, don't begin trading.

    Another important point is to keep the trade size small. The first aim of trading is to develop consistency, only after that it makes sense to increse the size. If the size of potential losses makes you feel uneasy, propably the trade size is too large.
  6. minmike


    First off. Trade as small as you possibly can that you will still care about it. If you don't care about it, it is about as useful as paper trading. Nothing ruins emotions faster than trading to large.

    Second. Automate/completely plan the trades. That way it becomes "the market didn't conform to my strategy," not "I'm an idiot, why did I take that trade."

    Hope that helps

    The time it takes for any individual to learn is completely individual. It can be learned much quicker than everyone else is saying.
  7. Just trade 1 setup a day. Be prof in this one trade at first.
    ..Yeah, i know..You won`t be able...And if so you are dead.
  8. What's your capital to stop-loss ratio? For example: 10,000 capital and 100 stop-loss = 100:1 ratio. 5,000 capital and 200 stop-loss: 25:1 ratio, etc.
  9. Redneck



    I am probably the biggest proponent of psychology on this board (an individual trader’s as well as the market’s)

    I even trade the market’s psychology at times

    A trader’s emotions are a fact of life

    You’ve gone down all the roads I would have suggested – no help there….

    So here’s different perspective ;


    Once you gain enough trust in your methodology – and you… is when your psychological issues will subside...

    And I can’t stress the next sentence enough….

    Once you know your methodology will make money… once you accept your methodology will lose money… and once you trust that your ability to manage both will be the difference between you being net profitable – or not

    You’ll have it…. you’ll know…. Then all fear, all hesitation, all the whatever… disappears

    Btw some get to this point and start describing trading as “a numbers game” – trade enough – and over the long haul the winners will out number losers….

    No matter what we call it – rest assured….

    All traders have winning trades…, all traders have losing trades…. What separates us is our ability to accept this fact and manage both… and of course the complete trust we hold our ability to do so


    Now I suppose if I was worth a shit I could tell you how to get to this point – well I can’t…

    But at least now you know what it looks like – so go find it for yourself – please

  10. good reply RN
    #10     Sep 3, 2010