Trading Without Fear

Discussion in 'Psychology' started by Duref Mudgins, Jan 26, 2008.

  1. The most common presenting complaint in my trading psychotherapy practice is fear. Fear of being wrong. Fear of being manipulated. Fear of loss. Fear of self-loathing because of irrational fear. Even fear of fear.

    As I work through these issues with my clients, invariably I find that the source of their fears is price itself. Bold, bald, naked, uncaring, uncompromising, incomprehensible price. They all fear price like the Gorgon. That is why they fill their screens with anything to distract them from looking at fearful price: indicators, volume, oscillators, related securities, estimators, the whole panoply of classical and neo-classical TA.

    Working with my associate Joe Doaks, we developed a system we call Trading Without Fear. It was inspired by SCT in a way we are still grappling to understand, let alone explain. But here it is in the attachment. Fearful traders need never look at price again. You will see that we have shrunk it to unrecognizability. Traders now need only trade the stoplight study.

    Joe is particularly proud of this because he had to spend over five minutes coding it, but it still came in at only three lines of Easy-Signal.
  2. Very interesting. Kinda hard to see whats going on, though.
  3. ammo


    everybody hates to be wrong,trading,money,arguments,your teacher, your boss,we learned as kids that if your wrong you will be punished,we replace our parents punishment with self chastising and the cycle repeats,so the trick is to not care if your right or wrong ,just trade,you will be right ,don't get excited,you'll be wrong ,don't implode,just try not to care,no emotion,when a waitress makes coffee,she just does it ,her job,no emotion needed to make coffee,no emotion needed to trade...the acct total is not you,it does not represent you,its just the acct,the coffee is not the waitress,its just coffee....simple,gets simpler every day if u make it a habit
  4. I go into every trade knowing without a doubt its going to be a winner. Even if it doesn't turn out to be one I have certain levels that I will exit the trade automatically and move on. So even if it doesn't work out it sure takes a lot of pressure off you and makes it easier to sleep at night honestly believing the trade you have on is going to be a winner.

    Also overanaylizing the market imo tends to lead to more fear of the market because you are always going to find certain information that is supportive to your position and certain information that is not supportive of your position. This leads to different opinions about the market and with each piece of info you read you feel less and less confident about your position and that ends up leading to fear.

    Just a few things I have found out along the way but that and $ .50 will get you a cup of coffee :D

  5. lescor


    I disagree completely with the previous post. I believe that you have to make it a deeply held core belief that you never ever know what is going to happen with any particular trade or the market in general. If you accept that the outcome of each individual trade is random, then accepting a loss is a normal and expected event, not something to be fearful of.

    Develop a money management plan that accounts for those normal and expected losses and you really have nothing to be afraid of.
  6. Tums


    You mean "Working with my other personality..."
  7. LOL, sounds like a plan YT, sounds like a plan. :)
  8. Sniemiec, thank you for posting. Is your handle pronounceable in English translation? The whole idea was to have an indicator which is a perfect, but bland, substitute for price. So that you don't even have to look at scary price. Trust me, this indicator very nearly perfectly represents essential price action.
  9. That is interesting. I go into every trade thinking I will lose. But then, why do I make the trade? Because I know you will win. :)
  10. Thank you all for posting. Despite the differences of opinion, at base you affirmed that fear can be an issue in trading. Any of you may feel free to consult with me at any time. I have a pro bono policy for ET members because you are all so endlessly entertaining. Plus I don't have to put up with any shit from you in person.
    #10     Jan 26, 2008