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Emotions and Mindfulness: what is your approach?

  • #1
  • First Post: Mar 31, 2022 12:59pm Mar 31, 2022 12:59pm
What have you learned about controlling your emotions and becoming more controlled about trading? I have heard this referred to as "mindfulness."

I am reading a book about mindful trading. I've also watched Mark Douglas' videos about trading and emotions. The four hours are free on Youtube.

I tend to think that trading is more about you and your self control than it is about having super-indicators. Because you still have to make good decisions and click the mouse.

So what has been your approach to emotions or mindfulness trading? Is this something you work on every day, or you read about, or you are finally past it?

I have traded for six years now and am realizing that the psychological state of a trader is #1 in importance and should be taught and learned as much as the technical stuff.

So how do you get yourself into the right state of mind every day?
  • #2
  • Edited 2:00am Apr 1, 2022 1:37am | Edited 2:00am
Honestly, after several years I realized, that the only way for me to overcome emotions in trading is to keep my hands off the buy/sell-buttons and leave trading to my algorithms. The main challenge is, that as a private trader, you are not responsible to someone else, making it easy to bend the rules, you set for yourself.
  • #3
  • Apr 1, 2022 6:17am Apr 1, 2022 6:17am
Quoting osfx
Honestly, after several years I realized, that the only way for me to overcome emotions in trading is to keep my hands off the buy/sell-buttons and leave trading to my algorithms. The main challenge is, that as a private trader, you are not responsible to someone else, making it easy to bend the rules, you set for yourself.
I have set up a complete system for traders who want to plan trading manually and execute trades with a bot that does execute trades 15 times faster than a human being can trade manually.
Practice makes a person perfect
  • #4
  • Apr 1, 2022 9:35am Apr 1, 2022 9:35am
Turning off the P&L window works for me.
Play the hand you were dealt.
  • #5
  • Apr 6, 2022 9:31am Apr 6, 2022 9:31am
Yes I agree, turning off P/L while in a trade helps enormously. Also, not necessarily seeing emotions as a bad thing is also useful. Sometimes, emotions can help us in trading.

Here's a short post I wrote a while back about emotions and trading:

https://www.thistradinglife.com/post/trading-emotions
  • #6
  • Apr 8, 2022 3:21am Apr 8, 2022 3:21am
Quoting Clubfooted
Mindfulness is a stage that is achieved when a person has his whole focus on a single thing. Traders should trade with their whole consciousness.
I like your definition of mindfulness - 'whole focus on a single thing'
  • #7
  • Apr 10, 2022 8:42pm Apr 10, 2022 8:42pm
Mindfulness is simply becoming the observer of yourself in real time.....
It is being aware of your emotions, beliefs and thoughts as they happen in the moment!
Mindfulness is realizing that your thoughts follow your emotions. As your emotions are biological not psychological.

Not surprising to me that this thread has little response when in fact Emotions and how to deal with them through mindfulness is by far the most important factor to your success as a consistent profitable trader... Unless your just pissing around that is. Indicators...methods..systems are such a small part of success yet they get all the attention..

Id say optimistically that at least 90% of traders fail and that at least 90% of trading success is lets call it “psychology” as an umbrella that emotions and mindfulness fall under...As biological emotions lead to psychological actions... But again everyone looks for the holy grail as a method or indi etc...When in fact the holy grail is you... Perhaps i will write up some more on this subject....
Master your Mind,,,Master the Market
  • #8
  • Apr 10, 2022 10:42pm Apr 10, 2022 10:42pm
one area to look into is being mindful of our habits.
things that we don't want to do, we do.
things that we want to do, we don't do.
while being an amateur trader, but acting out in expert mode.
a pattern we keep on repeating even though it's not going our way?

what triggers the bad habits?
eg. not exiting trades that's going against us for some time already?
is it wanting to be right all the time? got to do the perfect trade? all or nothing mindset?

start small to change habits progressively.
eg. instead of happy clicking on the mouse, just observe and do nothing for 10 minutes.
create the habit of observing first before putting on the trade.
placing small lot size trades until we are comfortable with the trading method.
capital preservation first before anything else.

Inserted Video
ITB - Seeing Orderliness amongst 'Randomness'
  • #9
  • Apr 10, 2022 11:43pm Apr 10, 2022 11:43pm
Emotionless trading is possible, at least it is for me and others I know. But took time, practice and discipline.

My personal ingredients for emotionless trading, simply put:

Money management
100% clear rules
Reflexes for respecting both above systematically
If I don't mention SL and/or TP = longer-term setup possibly in the works!
  • #10
  • Apr 11, 2022 12:09am Apr 11, 2022 12:09am
Quoting mtako
Emotionless trading is possible, at least it is for me and others I know. But took time, practice and discipline. My personal ingredients for emotionless trading, simply put: Money management 100% clear rules Reflexes for respecting both above systematically
First two plus an automatic trade management tool for effecting entries and exit if reflexes are to be controlled.
I find Trade management utility or an execution bot quite effective.
Practice makes a person perfect
  • #11
  • Apr 11, 2022 12:27am Apr 11, 2022 12:27am
Quoting simnz
{quote} First two plus an automatic trade management tool for effecting entries and exit if reflexes are to be controlled. I find Trade management utility or an execution bot quite effective.
Wow I completely forgot how they helped me with that. And in a more subtle way than can be imagined, I believe.
Yes, automation helped me a lot also with it, thanks for reminding me simnz! For I do take my eas for granted sometimes!

Most automated tools can still be affected, and in many ways different ways, by emotions, IF emotion problems are there.
They can be misused, turned off/on, optimized, etc., if one does have emotional trading problems or any disciplinary or incomplete strategy/risk management plan. But some still did help me in my journey toward emotionless trading, but I do not consider them a main part of it.

What helped me the most was identifying the cause of the emotions. Most often it was $$$$$. Hence, bringing down the risk till it affected my emotions in question, then practice, develop reflexes necessary to respect systematically all rules in real-time facing as many scenarios as possible. Simulation helped a great deal to speed it up. Of course, all of the above is not possible without a proven strategy+plan.
If I don't mention SL and/or TP = longer-term setup possibly in the works!
  • #12
  • Apr 11, 2022 2:35am Apr 11, 2022 2:35am
Quoting bluesteele
Mindfulness is simply becoming the observer of yourself in real time..... It is being aware of your emotions, beliefs and thoughts as they happen in the moment! Mindfulness is realizing that your thoughts follow your emotions. As your emotions are biological not psychological. Not surprising to me that this thread has little response when in fact Emotions and how to deal with them through mindfulness is by far the most important factor to your success as a consistent profitable trader... Unless your just pissing around that is. Indicators...methods..systems...
The psychology of trading gets the least attention (even though it is the most important factor) because it requires the most work. It's a shame that very few are interested in it - look on any forum and the posts discussing this gets the least views/comments.

Yes, please write up some more on this subject, I'm interested!
  • #13
  • Apr 11, 2022 9:05pm Apr 11, 2022 9:05pm
Quoting ChilledT
Yes I agree, turning off P/L while in a trade helps enormously. Also, not necessarily seeing emotions as a bad thing is also useful. Sometimes, emotions can help us in trading. Here's a short post I wrote a while back about emotions and trading: https://www.thistradinglife.com/post/trading-emotions
A nice article you wrote. I agree emotions can be very useful in trading and they can also be devastating to our trading. A double edged sword they are.
Now when someone is saying they trade emotionless....well that is impossible...the correct term is more like emotionally controlled. As I stated above emotions are actually a biological function like breathing...you cant stop breathing can you? Therefore its utterly impossible to be emotionless.. Unless you are truly a psychopath..which i doubt... Some of us have our emotions dulled and desensitized from trauma in childhood or as adults. Others use drugs and alcohol to desensitize our emotions. But to say we can trade without emotion like a robot is really not accurate.. Emotionally controlled is more accurate.

Yes by some of the ways listed above emotional control partly comes from money mgmt, and one must realize that not just any money mgmt.. like everything else it has to be done correctly.. it has to be intelligent risk control..intelligent exposure. A clear concise trading plan as well... realizing you can not control outcome only your process... Whenever you enter any trade..think to yourself I am flipping a coin.. This will help you cognitively realize you don't know the outcome...and that is how you have to think..therefore you become cognizant of risk and exposure control.. Clear rules ,clear plan, intelligent risk control all give you confidence when you've gone thru hundreds of trades that way.

A little side thought to be aware of..is One can feel comfortable trading say 1 lot..a 100k full lot.. what happens when you trade 10 full lots or a hundred or even more. There are retail fx/cfd traders that do trade into the 1000's of lots and its a whole different level when more money is on the line.. I say all of this as you may have your emotions under control...but growth in your account require growth in your personal self.. and your personal growth always has to come first.. Its like the lottery winners you hear of or professional sports players..get rich and then lose everything. Once again the holy grail is your mind but that just isn't sexy is it ? lol

Hope this provokes some thought and some to look inward at themselves.. The best thing about trading is it forces you to grow personally and that alot of times helps us in all other areas of our lives.. at least thru my rose colored glasses haha....

Cheers
Blue
Master your Mind,,,Master the Market
  • #14
  • Apr 11, 2022 9:48pm Apr 11, 2022 9:48pm
Quoting bluesteele
{quote} A nice article you wrote. I agree emotions can be very useful in trading and they can also be devastating to our trading. A double edged sword they are. Now when someone is saying they trade emotionless....well that is impossible...the correct term is more like emotionally controlled. As I stated above emotions are actually a biological function like breathing...you cant stop breathing can you? Therefore its utterly impossible to be emotionless.. Unless you are truly a psychopath..which i doubt... Some of us have our emotions dulled and...
I don't mean to ruffle any feathers -- and I agree with @bluesteele that it's silly to talk about trading "emotionless". You can't turn emotions on / off. We are wired to have emotions -- it's an evolutionary **ADVANTAGE**. Also, how does one train oneself to be emotionless? Ten years of psychoanalysis? No thanks. In my opinion you guys are way over-complicating this. What you really mean is that a trader needs to come to grips that you win some and you lose some. Like a professional athlete who has learned not to melt into a puddle when they lose a game -- tomorrow is a new game and you start-over fresh. It doesn't mean they like losing -- just that it's part of the game. If you can't handle losing, then trading will always be a struggle. So -- keep your emotions (whatever they are) and just look forward to tomorrow as another trading day...
  • #15
  • Apr 11, 2022 10:01pm Apr 11, 2022 10:01pm
Quoting robots4me
{quote} I don't mean to ruffle any feathers -- and I agree with @bluesteele that it's silly to talk about trading "emotionless". You can't turn emotions on / off. We are wired to have emotions -- it's an evolutionary **ADVANTAGE**. Also, how does one train oneself to be emotionless? Ten years of psychoanalysis? No thanks. In my opinion you guys are way over-complicating this. What you really mean is that a trader needs to come to grips that you win some and you lose some. Like a professional athlete who has learned not to melt into a puddle when...
I agree Steve..Losses are just part of business..Took me a long time to not overtrade and chase more...to revenge trade..to over expose myself ( not the indecent type like Mooodys tho )

It really does boil down to cutting your losses ruthlessly and letting those profitable trades run as far as you can let them.. Then its just a sheer numbers game.. Most can never get there as we are naturally not wired to be good traders it goes against our brain... But yep agree completely accepting those losses is key !

Cheers
Blue
Master your Mind,,,Master the Market
  • #16
  • Apr 11, 2022 10:15pm Apr 11, 2022 10:15pm
Quoting bluesteele
{quote} I agree Steve..Losses are just part of business..Took me a long time to not overtrade and chase more...to revenge trade..to over expose myself ( not the indecent type like Mooodys tho ) It really does boil down to cutting your losses ruthlessly and letting those profitable trades run as far as you can let them.. Then its just a sheer numbers game.. Most can never get there as we are naturally not wired to be good traders it goes against our brain... But yep agree completely accepting those losses is key ! Cheers Blue
Cool -- we agree...

And @bluesteele, I'd like to add one more thing that I know you also practice -- good money management. I think it is fair to say that where it comes to Entries / Exits we are all pretty much in the same boat. We may follow different trading strategies -- but our Entries / Exits will have similar accuracies. However, what distinguishes those who enjoy trading and who succeed (the two go hand-in-hand) is how they apply money management. So, though "emotions" may play a role in Entries / Exits, it's all the things you do outside of Entries / Exits that have the greatest influence on your success or failure. And I'm not claiming this is my insight -- many others have stated this before. It took me years to learn this the hard way because I figured I was smarter than those who went before me and I could leap-frog to the promised land. Turns out I wasn't (smarter)...
  • #17
  • Apr 11, 2022 10:22pm Apr 11, 2022 10:22pm
Quoting Inthebox
one area to look into is being mindful of our habits. things that we don't want to do, we do. things that we want to do, we don't do. while being an amateur trader, but acting out in expert mode. a pattern we keep on repeating even though it's not going our way? what triggers the bad habits? eg. not exiting trades that's going against us for some time already? is it wanting to be right all the time? got to do the perfect trade? all or nothing mindset? start small to change habits progressively. eg. instead of happy clicking on the mouse, just observe...
I train risk-averse retirees for generating passive income from trading of futures. They have limited expectations. That is of having a fixed income on a weekly basis. Most of them have lost money trading stock options as a seller. You won't find many educators advocating Buying of Options as an apt instrument for generating income. Because it is not easy.
I have written a free course titled GROWING SMALL TRADING ACCOUNT BY PUTTING IN TIME. Patience is required.
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The focus is on Capital Efficiency which means financial trading for income has to be run like a business.
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Retirees have liked the course and made money but were looking for daily income by using limited hours and limited risk. And without getting involved elaborately in acquiring technical or fundamental analytical abilities. They are focussed and took part in scale trading or fixed lot grid trading for more than a year using demo trades I have shared their experience on my thread
https://www.forexfactory.com/thread/...verse-retirees

The grid trading in HFT style can't be conducted manually easily. But they did it as a sort of video game and are keen on trading grids. They encouraged me to find an EA which manages entry and exits in high speed.

The HFT style trading essentially needs:

(a) high-speed execution of entry and exit which is not possible without using a bot or EA
(b) Brokers who charge not more than 1 pip (for 2 way of trading) as fixed commission. I can not find even one such broker using MT4 platforms.

In the meantime, I have found ScaleTrader execution tool on the Interactive Brokers platform. IB is a discount broker offering index futures for a fixed $ amount of commission, which does not exceed 1 pip for two way trades and does not charge any swap fee. Because the learners have got used to trading at MT4 platform, they find Interactive Brokers quite cumbersome to learn and some of them don't have a minimum deposit of US$10,000 to open an account.

The solution is to look for MT5 grid pending orders execution tool. Not the thinking one or that generates entry and exit signals.
Only MT5 platform is approved by the exchanges CME and Eurex for trading of futures . A handful of brokers offer futures, which is the idea instrument for trading.
Those brokers offer 15 times less than Interactive Brokers's margin requirements.

If you treat financial trading as a business and apply a system with rules for money management and margin management , then bad habits will not come into play.

Unfortunately, MT4/MT5 users are mostly looking for auto-traders that can think for them and deliver profits. So no programmer is interested in developing a pure grid execution tool for someone who wants to engage in financial trading as a home business.
Practice makes a person perfect
  • #18
  • Apr 11, 2022 10:28pm Apr 11, 2022 10:28pm
Quoting bluesteele
{quote} I agree Steve..Losses are just part of business..Took me a long time to not overtrade and chase more...to revenge trade..to over expose myself ( not the indecent type like Mooodys tho ) It really does boil down to cutting your losses ruthlessly and letting those profitable trades run as far as you can let them.. Then its just a sheer numbers game.. Most can never get there as we are naturally not wired to be good traders it goes against our brain... But yep agree completely accepting those losses is key ! Cheers Blue
I thought we agreed that over exposure would only be spoken about in your private invite chat room Kev…
  • #19
  • Apr 11, 2022 10:30pm Apr 11, 2022 10:30pm
Quoting simnz
{quote} I train risk-averse retirees for generating passive income from trading of futures. They have limited expectations. That is of having a fixed income on a weekly basis. Most of them have lost money trading stock options as a seller. You won't find many educators advocating Buying of Options as an apt instrument for generating income. Because it is not easy. I have written a free course titled GROWING SMALL TRADING ACCOUNT BY PUTTING IN TIME. Patience is required. {image} The focus is on Capital Efficiency which means financial trading for...
If we pay a subscription can we turn off the adverts?
  • #20
  • Apr 11, 2022 10:45pm Apr 11, 2022 10:45pm
Quoting robots4me
{quote} Cool -- we agree... And @bluesteele, I'd like to add one more thing that I know you also practice -- good money management. I think it is fair to say that where it comes to Entries / Exits we are all pretty much in the same boat. We may follow different trading strategies -- but our Entries / Exits will have similar accuracies. However, what distinguishes those who enjoy trading and who succeed (the two go hand-in-hand) is how they apply money management. So, though "emotions" may play a role in Entries / Exits, it's all the things...
Yes outside of entries and exits one of the more difficult things to do successfully is add to your "profitable" position... There is a time and place for taking profit off the table...And you will hear some say "you can never go broke by taking profit." but thats 100% false..you can go broke... I think one of the worst things you can do (at least intraday) is to go all in on a position from the get go... I rather wait..see that its going "my way" then add to it...add hard and aggressively as momentum pushes it fwd and then breathes and pauses.. Then add more.. The hard part is not overexposing yourself.. that just takes time and practice... Then scale your trades back off.

That is key to large money imo and experience. Too many scale out their initial entry..backwards imo... add and add hard..then you let off the gas.. doesnt take too many trades like that to mitigate many losses.. Ive watched live ..Live intraday trades being scaled into $4000-$5000 a pt on Indices.. Takes balls..,smarts experience and a very cool calm mind. ADD ADD ADD and ADD some more is a whole nother level but we can all do at our own levels... One has to only look at the studies done by FXCM several studies done of 50 million plus retail trades..Most traders can trade and get a decent well above 50% win rate..but there losers are always bigger AT SOME POINT than their winners...and thus TILT... Fear, Scarcity thinking and scared money thinking are the grim reaper of our business.

Cheers
Blue

PS and yes i noticed a post of yours awhile back where you recognized the importance of "MM" and i thought aha..hes come around many dont.
Master your Mind,,,Master the Market
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