Anyone who is depressed from losing a lot of money needs to rethink. I once went out with a woman who had a friend. Her friend was a stunt diver who had taken the wrong dive in Las Vegas and ended up paralyzed permanently. She now sits in a wheelchair. She has barely the use of her hands or feet. Everything she does from going to the bathroom to eating has to be assisted. There is a nurse who is stationed permanently by her side. Now that is just one of the worst case scenarios. Another worst case scenario is ending up locked up in a prison or having cancer. Losing some paper money is not a big thing. Just be glad to have your health and freedom.
Thank you all for your help and your very right comments. I feel better but I still want my money back...
What makes trading difficult, especially for newbies, is that a lot of those intra-day movements are totally random and can't be predicted with any degree of statistical consistency. There is no explaning some of what happens out there. It just happens. There is an definetly an element of gambling the shorter term one goes. However we have the right to "swing" only when we want to. We can take 4 swings a day or no swings -- it's up to us. That's where the edge has to come in. I try to swing at the best pitches and at the ones that can hurt me the least. It's about high quality R/R situations. Of course the real trick is recognizing a sweet pitch from a poor one. Do it long enough, and most should be able to recognize the wheat form the chaff.
I personally think the stress and trauma caused by big account blowouts causes not only depression but other forms of brain damage too. My memory and personality hasnt been the same since i was initiated into this game.
hmm.......what an interesting post, very interesting indeed. I never thought about it that way myself but I think its true. my trading and market knowledge is substantial compared to when I was a Noob, but its as if a part of me died in order to get this knowledge.
Livermore pointed out that losers will HOPE when they should FEAR and FEAR when they should HOPE. When the loser is losing he HOPES that his position will recover, only to wish he had not listened to HOPE. When he starts showing a profit he FEARS that the market might come and take it back so he sells too soon. He needs to FEAR that his loss might get larger and he needs to HOPE that his profits will grow. Easier said than done, but.......oh so true!
getting/becoming depressed from trading is a very real possibility. i have seen it happen and i was on the verge myself after taking some rather large hits. try helping a child with homework or reading him a bedtime story after taking a big hit: you can't,your mind is just not there. i learned to keep my losses very small and have become very risk averse. i also pick each stock every morning and do not rely on random movements. i posted earlier in real time i hope about IBM breaking out.i bought on the retracement at 108.55 and let it ride to 109.35. i refuse to take crazy risks and if a stock is not doing what its supposed to,i sell as quickly as possible with very minimal damage.if it starts to do what i originally thought,i jump back in,simple as that. getting back to depression,its can happen and its debilitaing and takes its toll on your family as well. when other people have a bad day at the ofice,its a bad day,as a trader,we are losing money. whens the last time you heard a computer programmer complain that he dropped 5 grand at work. i have a friend that no longer trades who went through serious depression from constantly taking hits. what winds up happening is after a big hit,human nature looks to get it back as soon a spossible and to do that requires big risk taking which invariably causes further losses. i have been knocked to the bottom more than i would like to admit but they were learning experiences and valuable ones at that. however,how many learning experiences does a trader go through before he jumps off a bridge? trading is tough and the minute we take our eyes off the ball,we are going to get hit hard.thats how it happenes and we always say we should have known better ect...truth be told,everytime we make a careless mistake,it does'nt seem careless at the time.thats why discipline is paramount.
I think I agree: trading for 10+ yrs, does something to your sharpness. Like taking a sharp knife and melting it into a butter knife. Plus, it's a very private endeavor, so you take the good and bad alone pretty much. How many traders can recall those days of screaming and cursing at the computer, as if it had any power. All this crap about fear when you should hope, hope when you should fear. Follow the axe, all these zen sayings. But from my experience, call me a cynic, but I truly believe pattern day traders are consistently monitored and faded left and right. These mms can discreetly move tons of money back and forth all day long on an equity, while fishing for pattern day traders entering trades, then bing.. completely reverse direction until that trader's pain threshold is hit. I would like to see a study on how many pattern day traders exist say with a net worth of 100k + Then ask how many ptdrs jump in and out of say one single equity per day. I would bet that the number is not really that large. I've seen some debates about why PTD regulations exist. But, if i was a broker, it would make a great and easy tag, for which orders to fade and generate trading profits. Also, because there is so much noise being created from a much larger pool of smaller pattern day traders, it is harder to focus on and fade the majority of them (like a school of minnows); simple way to eliminate the noise, require 25k + min-- now you've narrowed down the pool of ptdrs to fade and monitor. Anyways, that's my two cents.
Why is this the case? Are futures inherently different from trading the index ETFs? A chart is a chart. Some say FX is even more difficult to trade, I have no idea where traders get these dubious assumptions.. Why on earth didn't he abandon that failed strategy after he lost his first $100k?? Or at least switch it around and try fading the breakouts after buying them failed consistently? If he was that stubborn...
...I cant even remember how many Panic Attacks i've had since i've started trading full time....i hope i'm not the only one that consistantly wakes up in a puddle of sweet thinking i'm long 5000 contracts and the market just crashed. Sadly, i have more dreams about the market, than i do about sex....hopefully thats not going to turn into a problem. ...i think all the stress/depression that we all face is purely based on our willingness to assume risk. Your not nervous and stressed out when your holding 1 car, but when your holdind 100+ your probably stressed and uneasy (depending on your bankroll ofcourse).