Kiwi, In regards to your statement "You also mistake reducing emotional response for denying emotions. Or supressing them." Maybe I was/am confused. I see alot of posts and people talk about how its important to not feel fear/greed and to ignore them etc ... or to block them out. This led me to believe that they were concentrating on these emotions and attempting to deny them.
Yes I think they are; or maybe they are just stating their goal incorrectly. Any time you deny or suppress emotions they are likely to either amplify or come back at you from a slightly different direction. Buddhist philosophy and practice says that you focus on the emotion (and not, initially, the thoughts leading to it) and this will remove its power to affect you. Literally pause and really feel the emotion and then stay with it as long as its there, not letting thoughts etc distract you. Modern biology/evolutionary brain theory also supports the same approach because as a trader each bad pattern consists of a complete cluster of perception/thoughts/emotions/feelings/behavior. By focusing on the emotion (or BS's feeling if you can't identify the emotion clearly enough) a number of things happen. You incrementally reduce power from the emotion. You short circuit the cluster so improve your chance of not doing the wrong thing. You start to perceive the thoughts driving it so you can improve your beliefs or remove the elements driving the perception (maybe get rid of a short term chart thats triggering bad trades). You become able to see it happening earlier. All of these interrelate to help you improve your trading behaviors.
I agree with most of your analogies between sports and trading. In fact, here at EliteTrader.com, I myself make a lot of analogies between sports and trading. However, there's one thing that we must not forget. These top athletes have started at a very young age and were one of the best on their Jr. level prior to reaching their teen years. We as traders didn't start in similar fashion and all the practice and training in the world cannot duplicate the advantage of starting at such a young age. Simply, those guys/gals playing sports on a top level...they've perfected the basics of their game prior to reaching puberty. I've never met nor heard of any traders starting in a similar like fashion. Are their top athletes or professional athletes that started sports in their teen years in comparison to others (children) that began their careers a few years after learning how to walk? Yes and I've met a few. Yet, prior to getting involved in a particular sport, even they already had perfected some of the psychological/emotional aspects that was needed to catch up sort'uv with those that started playing the sport at a much earlier age. By the way, when I was growing up, one of my friends Dad use to play and teach him about architecture, designing skyscrapers at a young age. By the time we were 6 years old my friend was able to duplicate the reconstruction (models) of some of the worlds top buildings and bridges in his basement in amazing detailed... All for fun because that was play time for him. I remember by the time we were in Jr. High some of the other kids thought he was weird and a geek especially since he couldn't catch a football nor hit a baseball. Today he's a top U.S. architect. Mark (a.k.a. NihabaAshi) Japanese Candlestick term
Dr. Kiev may be a great psychiatrist but his books are not worth reading, full of platitudes and boring examples. Try Mark Douglas. Instead of Dr. Kiev he has been a trader.
From a previous issue of Trader Monthly. You can subscribe at http://www.tradermonthly.com Trader Daily Emotional Rescue Many so-called experts argue that the best traders in the world are steely, dispassionate and entirely able to wall off their feelings. Don't believe the hype. By: Doug Hirschhorn Issue: February/March 2006 Traders have been brainwashed to believe that emotions in the heat of battle are a problem. Head Coach The longest post-season game in Major League Baseball history was in the bottom of the eighteenth inning this past October when Chris Burke, a rookie utility player for the Houston Astros, strode to the plate with one out. The unheralded 25-year-old had entered this National League Championship Series marathon in the tenth inning as a pinch runner. He then flied out in the thirteenth and walked in the fifteenth. Burke waited for Atlanta Braves pitcher Joey Devine to serve up something he could drive, working the count to 2-0. Devine, a hard-throwing righty, unleashed a fastball. With one historic swing, the doubleheader-length contest was over. The Astros were catapulted to the World Series, and Burke's home-run ball was off to Cooperstown. Don't think for a second that he wasn't feeling any emotion standing there at the plate. Excitement, nervousness, urgency, a sense that he could do something truly monumental -- Burke would surely have grappled with all these feelings. Possibly the single most misleading piece of advice given to traders is "eliminate your emotions." Almost every book, seminar and piece of literature concerning trading invariably maintains that to be successful, you have to disconnect from such feelings as greed and fear. Guess what -- it's a load of crap. Not only is this bad advice, but it's impossible to implement unless you're of Vulcan descent. Being human means we experience feelings, and trading sans emotion is counterproductive. Emotions can represent a range of positive influences in all of us: passion, drive, persistence, creativity, discipline. Traders have been brainwashed to believe that emotions in the heat of battle are a problem. I believe otherwise -- that it's how you interpret and handle emotions that differentiates failure from success. The trading world is filled with guys like Burke, hard workers languishing in obscurity. Evan is a trader I've recently worked with. He has spent most of his career in limbo somewhere between greatness and strings of painful setbacks. When forced to take a close, hard look at himself, he recognized that once his trades go live, he experiences a range of emotions: doubt, anxiety, fear, greed, confidence, overconfidence. My work with Evan focused on having him accept that emotions in any given situation are natural. It also involved him preparing to experience them. Eventually, Evan came to view the emotional component of trading as a collaborative element of the process rather than a barrier to success. I had Evan complete an 18-step daily journal that enabled him to break down the day's events, everything from his pre-trade game plan to what went well to what didn't go well. We wanted to know what emotions he felt, and how they could benefit him. One day, Evan was about to enter a trade, but it bid up quickly. He was afraid to get in at this point, because he felt he would be top-ticking the market. I helped him tune into his fear response as something triggered by his own preconceived notions about what made for a good entry level. The market doesn't care what you think is a great entry point, I explained. By recognizing the fear and accepting it as a natural emotional reaction -- but not necessarily as a reason to change his behavior -- Evan was able to take advantage of more trading opportunities. And just like the fateful Chris Burke in the eighteenth inning, Evan could now better identify his pitch, wait for it and -- his emotions not eliminated but rather in play -- swing for the luxury box. Copyright © 2005 Doubledown Media, LLC. All rights reserved. Trader Monthly, 240 West 35th Street, 11th Floor, New York, NY 10001
The article, however, is also crap. Or at least crap in the sense that the article "tells it like it has to be". Emotionlessness is not Vulcan. It is the consequence of knowing what you're doing. This "unconscious competence" enables one to focus on the task at hand, not to get one's panties all in a twist over what one should do and how one should do it and what might happen if things don't work out as hoped for and so on. Top athletes know the rules of the game. They know how it's played. They've studied the participants and their behavior. They've practiced. They've developed an edge. They hone that edge to the point that they don't have to think about it when it's called upon. Most traders, however, have no idea how the game is played. They don't know the rules. They don't know the participants, much less anything about their behavior. They haven't practiced. They have no edge, much less anything to hone. They guess. They gamble. They hope for the best. Is it any wonder they're emotional? LC
Can we learn to be emotionless as humans? or should we try to manage the emotions?...Nitro actually brought me to this, some months ago.... when I trade my systems...whether they are thought out enough or not...I trade them without "thinking" but when they stop working I "think" a lot! when the buttons that I am pushing get "stiffer"...well its time to stop trading...
Couldn't agree more. I can't believe what passes as 'trading psychology' these days... what a crock of you know what. It seems like these trading 'coaches' spring up out of nowhere, with nothing but a bunch of tired cliches and empty words to offer traders who really either need a real trading plan or real consultation with real psychologists/practitioners. There's only a handful of genuine/helpful trading psychology experts out there, Mark Douglas being the foremost of these, but my goodness, the charlatans are so bad it's almost laughable... But when you stop laughing, can't help but find it sad that these bozos are the same ones who will be the ones present at all the trading events out there, ready to take advantage of unsuspecting clients.