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Help! Finding emotional aspects of trading very hard!

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  • First Post: Nov 21, 2010 10:28am Nov 21, 2010 10:28am
Hi

Just finding this aspect of trading so hard, I just had to post a thread on it! I've been demoing for about a year (this is the saddest part of all, i'm not even using real money yet!!!) i'm a fairly emotional person, find it quite exciting when my trades do well but fairly despondant when they don't, i don't really like these up and down emotions but do not want to let them get the better of me. I have come a bit of a way, at the start i was like someone watching the grand national when my trades did well, and felt like flinging the laptop out the window when they didn't i've decided to stay away from actually doing trades for a while, go back to the books a bit and study FF forums in more detail, after having a really bad week regarding trades.
would like to hear others stories who may have had these emotional issues but managed to conquer them, i.e does it get better, do you get immune to these up and downs, did you manage to get on top of them?? Thanks
You've pretty much stated, why you shouldn't be trading in the first place. "You're an emotional person" - emotions has not place in trading. Continue to demo and control your emotions doing so.

In trading, you need to separate yourself from money for which you need. If you need this money to live, then it should not be put in an trading account. True traders only trade money for which they're willing to lose and/or have a plan in place so that losses are slow, and money is lost over time.

Emotions are just on very small aspect of trading. Trust me, as soon as you conquer the emotional aspect, you'll need to focus on yet another aspect. Continue with that demo until you think you're ready to go live.

BTW, why are you emotional trading demo account?
Quoting rlforex
Hi

Just finding this aspect of trading so hard, I just had to post a thread on it!...

in order to be successful, you gotta completely remove emotion from trading....thats a fact. The best traders ive ever met were, as bad as it sounds, complete emotionless pricks lol. When you start worrying about losing money, thats when your normal train of thought goes haywire and you start making IRRATIONAL decisions that you otherwise never would have made. It does take much time and practice but if you train your mind like a robot youll be ok. This is what you want to do, be a robot, those numbers in your account are merely that, numbers like a score....
This is a good post by Dopey in another thread... The making of rational forex traders -
http://www.forexfactory.com/showpost...52&postcount=7


Demo-ing for a year is an honorable accomplishment. I commend you for your restraint. As you say, "you're an emotional person." You may not be able to change this for trading.

With the availability to trade micro-accounts, I'd say open a small account ($50), and trade it with utmost seriousness. Expect to lose it all, as perhaps you haven't demonstrated profitability yet (or maybe you have).

Thinking of trading as a performance activity,... after many, many, trades... you may be able to focus on what is important while you are trading (and make correct decisions), while still being an "emotional" person. Can an emotional person be a good tennis player? Sure, because after hitting thousands of balls, they do the 'little things' right over and over again.

Many may not agree with my analogy. Though I still get angry when my stops are run, and tense when I enter a trade in a volatilie market, I have had some recent success. At least a couple times a week, I am yelling at my screen for the unbelievable prices that seem to emerge.

Most of the time though, I am trying to "keep my eye on the ball". That has come from literally thousands of real trades.

I don't think "going back to the books" and studying the forums in more detail is going to change who you are. When it is time to play, just concentrate on "hitting good shots". Afterwards, you can celebrate or throw your racket... but then of course, you have to get ready for the next point.

Just my 2 cents.
Good Luck!
Quoting rlforex
Hi

Just finding this aspect of trading so hard............

Trading can be a very vicious cycle for new traders. New traders at their begining stages hardly have any access and understanding to trading methods with edge. Even if they do have, would pass and jump on new methods.Hence even with good money management and right psychology, they would blow the account which then cracks their psychology further. This further cracked psychology puts them down to wrong paths of trading and they get lost in this cycle.

IMHO, the very first thing you should do is understand the markets and find methods based on facts having edge. Then you could work on MM and psych part.

There are different MM styles and methods. It ultimately boils down to your Psychological make up. One may be comfortable with trading methods having large drawdowns and other with hardly any drawdown. One may be at ease to trade high percent win and not so impressive RR and the other with low percent win but large RR . Just find time to talk with your self and ask what are you really comfortable with and plan your trading accordingly. Whichever method and style you adapt, just take care that you find a method with edge and follow it consistently.

I hope my 2 cents will help you!

Best Regards
Winston
Trading is a delicate balance of Strategy , Money management and Psychology
I've been trading with limit orders recently because my schedule is brutal. I set them well in advance, and check on them once a day.

This has removed emotion from my trading. I know where I want to place my orders, where I want to get out (win or lose). That's all you need.

When I check on my trades, they are usually completed. If it's a win there's none of that move SL to BE then get stopped before it goes on. There's none of that stress that comes with watching a losing trade, or that comes with watching a winning trade put you in the red.

So try using limit orders and spend your day doing something more worth while than watching exchange rates.
Most stress in trading arises from not really knowing what you're doing, one tends to connect hyper-inflated emotions to what are essentially random outcomes. Winners are seen as vindication for your intellect, any lack of process of preparation gets conveniently forgotten at this point, then the next loser deflates that balloon very quickly. The answer for me is be prepared, all the testing and research is done before the first trade is placed, then it's just monitor and review. Shit didn't work, why not? can it be fixed? repeat, that's it...I'm not saying I don't get pissed when I lose money, but if your results are still in line it's easier to deal with than being flogged on a wheel of randomness.
The breaking of a wave cannot explain the whole sea.
Also overleveraging your trades can have this effect. Only risk on a trade what you're "happy to lose". And conversally what you're "unhappy to gain" meaning at 1:1 RR you will hold the trade for at least 2:1.

In otherwods it encourages good money management and the old adage of letting your winners run and cutting losers short.

This will hopefully have the effect of not feeling so stressed on the resulyt becasue you know your winners will/ccan cover the losses. Hope Ive made sense
Time hides Nothing
I think you should not trade, your emotions will be your undoing.
Join a monastery or do something else less stressful than trading.
Quoting Craig
Most stress in trading arises from not really knowing what you're doing, one tends to connect hyper-inflated emotions to what are essentially random outcomes. Winners are seen as vindication for your intellect, any lack of process of preparation gets conveniently forgotten at this point, then the next loser deflates that balloon very quickly.
It seems as if Craig has described your situation very accurately, re-read your own first paragraph.

I'm embarrassed to say that I have given you poor advice (above)
if you do not have a tested system or method that produces profits or
demonstrates an "edge" over time.

I myself was "flogged on a wheel of randomness" for a year.
Trying to "outsmart" the market, whimsical discretion entries, improper risk management, untested momentum trading strategies... all lies to myself.
I recommend you start trading with real money right away. I don't care about the sums of money you trade, as far as I'm concerned you start trading microlots.
The idea behind is that it takes nothing more than time to become emotionally irresponsive to gains and draw downs, but you do need to expose yourself to such emotions in order to overcome them. Some just adjust faster than others.

Or you can talk to a shrink, and find the deeper meaning behind what you feel.
The nail that sticks out gets hammered back in
Hi

Thank you all for your replies, I just looked down through them quickly but would like to study them in more depth later, its great to get so many responses i.e people willing to take the time out to advise others. there is some very sound advice here, psychological i think i'm hoping maybe too much that this WILL be a career for me instead of seeing how this goes and keeping an open mind, i also maybe am a bit too desperate to work for myself as for a lot of personal reasons I really need the flexibility. it seems the more you care and the more eggs you put in a basket, the more your emotions are going to affect you, i do agree they don't have any place in successful forex trading i.e you probably have to get a handle on them or get out,
much appreciated all your advice, many thanks!
If you are insistent on trading then I would suggest a strictly mechanical system, one that take the guesswork out of placing a position and has hopefuly taken reduced emotion as well. A system that has well defined parameters, when to get in, when to get out and risk management.

Remember though even with such a system there will be strings of losses..... Can you handle 6,7,8, losses in a row before becoming profitable?
find a good strategy man!
Quoting tradestar1
If you are insistent on trading then I would suggest a strictly mechanical system, one that take the guesswork out of placing a position and has hopefuly taken reduced emotion as well. A system that has well defined parameters, when to get in, when to get out and risk management.

Remember though even with such a system there will be strings of losses..... Can you handle 6,7,8, losses in a row before becoming profitable?
Hi
yes, I had considered a mechanical system, someone else above also suggested setting up a trade and then walking away from it, going and do something else instead of sitting there watching the figures going up and down, defiinitely good advice. but i would still like to have a stab at finding my own trading plan that i could stick to first, one of my problems is that i keep jumping around different strategies, last week i thought scalping was the way to go, now i know that no matter what i don't have the personality or patience to sit there and watch the charts that intently, every single minute and am probably better off doing longer term trades that you can watch but walk away from as well. but i'm definitely going to keep the idea of a mechanical system as a possiblity, don't know about the joining the monastery though, don't think they take women and not much into all that praying!!
Quoting rlforex
Hi
yes, I had considered a mechanical system, someone else above also suggested setting up a trade and then walking away from it, going and do something else instead of sitting there watching the figures going up and down, defiinitely good advice....

If you're interested in placing your orders ahead of time with defined TP and SL, may I suggest Sam Seiden's webinars. This is supply and demand trading. While not exciting or mechanical, it fits the bill if you want to distance yourself emotionally while giving yourself time to enjoy the things life has to offer.

If you haven't already search for Peter Crowns on the forexfactory search. If you read his posts (there are only like 30 of them), you might find some inspiration for a longer term mechanical trading method. The way he manages his trades is really great food for thought.
Quoting rlforex
Hi
don't know about the joining the monastery though, don't think they take women and not much into all that praying!!
LOL
Hi, coming late to the party. I went through this, too. I'm very emotional and trying to trade intra-day made me a wreck. I did two things: I went to Daily from 3-minutes for entry and exit, and I adopted what I term an 'Amateur Investor's Mentality;' meaning I just trade with the trend - buy strength and sell weakness. I do wait for pullbacks to enter and I do consider supply and demand levels, but I keep it as uncomplicated as possible.

Holding positions for several days or weeks is far more relaxing.

Rob
Quoting frankkn
If you're interested in placing your orders ahead of time with defined TP and SL, may I suggest Sam Seiden's webinars. This is supply and demand trading. While not exciting or mechanical, it fits the bill if you want to distance yourself emotionally while giving yourself time to enjoy the things life has to offer.

If you haven't already search for Peter Crowns on the forexfactory search. If you read his posts (there are only...
Hello Frankkn
thanks a million for giving me those links to those webinars, i'm going to have a look at them and the posts for peter crowns method, cheers Rlforex
Quoting Rob Mondave
Hi, coming late to the party. I went through this, too. I'm very emotional and trying to trade intra-day made me a wreck. I did two things: I went to Daily from 3-minutes for entry and exit, and I adopted what I term an 'Amateur Investor's Mentality;' meaning I just trade with the trend - buy strength and sell weakness. I do wait for pullbacks to enter and I do consider supply and demand levels, but I keep it as uncomplicated as possible.

Holding positions for several days or weeks is far more relaxing.

Rob
Hi Rob, glad to know i'm not the only emotional one out there, i'm sure theres tons of traders with the same problem, i'm actually coming to exactly the same conclusion as you have stated here. i may very well be far better off with longer term trades, i've certainly realised that very short term trades or scalping definitely not for me, i found this both nerve wracking and head wrecking, for some reason i had it in my head that holding trades for longer than i day would be far more stressful than intraday trading, not necessarily the case i think!! i also feel that you can probably put a bit more thought and study into preparing for longer term trades instead of trying to make quicker instantaneous trading decisions. thanks for this advice, i agree with everything you say 100% here, have a good trading week, Rlforex
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