What's the emotional price of trading current markets?

Trading is no easy process, for many reasons - psychology being one of the major causes of the challenge.
In normal days, if ever there were any normal days in the market.., the psychological aspect is there for one reason - uncertainty.
The human brain is not functioning at its peak when there is uncertainty, and the market provides much of that lately.
The current state is uncertain and the road ahead is also unclear, which makes trading these markets a very challenging process.
Experience to the rescue - to combat uncertainty, personal and collective experience can help a lot,
Experienced traders have been in many similar situations - if it wasn't the Coronavirus it was M&A, mortgage or any other financial crisis,
The cause is not the major parameter here, its the market reaction that is the same in all of these crises,
It seems different every time but experience shows that there is nothing new - it's just another financial crisis.
If you are young to trading, use the more experienced traders to show the way and developing your own sense of direction using personal and other trading insights.
Trade Smartly,
Alon, AlphaOverBeta,
AlphaOverBeta.net

 

Hello Trade Prophet,

Good post regarding uncertain.

I personally deal with uncertain by just knowing that day-to-day trading uncertainity is part of the job description of a professional trader or investor. I like to think in terms of probability of a win vs a loss. If the probability is high of a win, I have a job function of executing the trade.

Also, I believe the better skills I obtain in trading, the better I become and dealing with uncertainity. Skills eventually equally confidence and confidence I hope to eventually reduce uncertainty. Constantly studying and practice and seeking good help all helps with uncertainity.

Also, I try to stay away from the news and the overall "big picture" and focus right on the smaller time frame chart for a moment in time of what my brain can focus on. I only have one brain, it can not be too worried on politics and news when time to execute. Extreme focus helps for uncertainity as well.

 

I like it, you know how to handle it, must have taken years, this is not something you are born with

 

Hello Trade Prophet,

Well, I am still trading on the journey to trading profitable consistently.

No, its not something you born with for sure. It takes the RIGHT training. Listening to right people. Realistic conversation. No messing around.

Every trade, every day, the brain will doubt my trading entry, and exit and stop loss. It is constantly asking questions, "what about this, no what about this, you should wait, this does not look good, you better exit and take some profits, no hold that trade a bit longer, ohhh lets look left and see what is in the way before you take that trade, you already up $200 for the day, why take another trade, what if you take another trade and lose, why you exiting now for , let it ride. Lets just take the money run and be happy we made some money today. ...... and on and on and on. just get out that trade, but if I exit I will regret it, remember you gotta let winners run, but how do I let run, run for how long, man fuck letting winners run, I am taking this money, but you will regret it..... and on and on"

I must have something I can refer to calm all those questions and doubts. There has to be something that is logical and makes me feels good and comfortable about answering each question about logical. Those answers are personality, stats, and logical base trading skills.

There is no way around it, if I do not have trading skills, I am wasting time.

 

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IF you/we think about your/our profit +loss too much; we are not working hard enough/doing enough research.
Looks like you value truth >> more than a polite answer;
since most investors make money/long term+ most traders lose money/long term= another clue.

OF course trading is more fun/ so really depends on your/my plan.
Hope this helps=it helps me.

 

Thanks for the honesty , you writing is spot on, it's really hard and grinding, I agree with your conclusion and let me tell you, the voices and doubts are not going to stop, the human brain is not wired for trading, human psychology is risk averse and build for procrastination, but know this, you are not alone, every experienced trader goes through this every day,
Don't give up and keep up the good work, consistency is on its way!

 

I like your answer though I don't think trading should or is fun, it's hard, challenging and routine, it's about not being right but being on the right side of the trade,
The weekend after a profitable week is fun ;-)

 

People whose method has a low win rate (<50%) has an advantage: Very quickly we get used to losing. Once you are used to it, it will be part of your routine.

Of course the method better has positive expectancy or your risk of ruin is 100%.

 

this is true

like smokers getting used to lung cancer

 

High win rate also has an advantage and it's what most desire, easier on the psych, problem arises when such desire exist regardless of expectancy, a sad truth.