Discussion in 'Psychology' started by trade4succes, Dec 20, 2005.

  1. any thoughts on self-sabotage? Trading is easy, but damn hard for me to go through the day without losing control at some point.
  2. Pabst


    I've battled self-sabotage my entire career. I see it manifest itself in other areas of my life as well. Trading really is a mirror afterall. I'm sure it's a feeling of undeserving. Meds can ease the compulsiveness but I find the root cause lingers. Hopefully some great minds will pipe in......
  3. define losing control?
  4. Pabst


    I'll define how I lose control. I'm a former floor trader so I'm most comfortable scalping. I have a totally discretionary yet rules based system for entering trades. Historically I have a clearly defined edge and thus a higher percentage of winning to losing trades. However I still have plenty of losers because I trade frequently. Most the time I have no problem accepting those losses.

    When a trade moves against me on a "misread" I then treat the new price as a new "set-up." In other words if ES is 1272.75 bid and I sell the 75's but instead it goes bid hard like on a buy program up to 1273.50 bid I now treat 1273.50-75 as a new market opportunity and decide whether to get out up there or see if a reaction lower is in the offing. Often I'm too hopeful in betting on reaction, I'll ignore market information that would encourage me to take the loss. So now I'm in a position where it may scoot to 1274.25b and then I think, fuck I'm down my whole day, so I revenge trade and double up by selling 74's. Now maybe it'll go 73.75 sellers but I'm unable on my 73.50 bid and it's back 74 bid. Now I may engage in a series of crappy trades and either wind up loaded up short as the market jams higher or get chopped to death depending on what follows. I know intellectually that just taking the original loss was the best option and then start over from scratch. However in practice I often just lose control.
  5. The key for me was to identify the circumstances which would most likely lead to a series of compounding mistakes, and rectify/eliminate those circumstances as soon as possible. Trying to refresh one's objectivity after a "misread" is all fine and good in theory, but the problem is you can keep "refreshing" indefinitely as you continue to hold a position that keeps going against you all day long. For me the spread + commission is a tiny price to pay to regain emotional control and objectivity; if I really want to get back in the trade, I can just hit it again. If I miss it, so be it.

    The key here is the belief that there are countless number of opportunities in any given day, and that I only need a catch a fraction of them to earn a decent pay -- this is what you really need to convince yourself of in order to let go of the past and get beyond the crutch of "revenge" trading. I know it's not an easy habit to kick. But in general, I think focusing on the positives is more effective than trying to mitigate the negatives.
  6. nitro


    That is a really good attitude and a sign of trading maturity.

  7. Pabst


    A most helpful post.
  8. I feel I only turned a corner a short while ago. But the thing of it is -- I knew what I wrote to be true years back, yet it wasn't until I realized, developed, and fully embraced my own conception of what kind of trader I wanted to be and understood how I could successfully interact with the markets before all those issues at the root of sabatage began to dissipate. Things just kind of fell into place and made sense, without me needing to push/punish myself as I'd tried before in effort to maintain control.

    A specific example I can share is that I used to always kick myself pretty hard for getting out too early in a profitable trade that would have wound up a big winner. Knowing that I could have just sat on my hands and made far more than I actually had would gnaw at my mental state for the rest of the session. Nowadays, because I usually find myself going both long and short in the same market at least once a day, missing out on "the" big move becomes a moot point. Regret is meaningless in this context because if you're long and short every session at least once, you can always say "I could have held for more", no matter how the market winds up, and so it suddenly becomes a very silly thing to have as an excuse to wrack your brains with. Believing that anything could happen during a given market session, and being open to letting that objectivity express itself in both directions each day, became a natural "fix" to that habit of regretting and looking back at "what if's". The concept of "cutting short" no longer carries much emotional impact afterwards, as it just becomes something that's going to happen all the time -- in other words, mundane.

    Anyways, I guess one of the reasons sabatage is so difficult to overcome is that most of us struggle to defeat it, but succeed only when we don't have to struggle at all. Somehow this makes perfect sense to me, despite the implied tautology.
  9. Great thread...

    thanks for sharing :)
    #10     Dec 21, 2005