Emotions arise not because winning or losing, but because what we believe winning or losing means about ourselves. Promoting a way of seeing or feeling ourselves independent from beliefs...
This thread proposes a levelled approach so to speak, equanimity, rather than being on the rollercoaster of winning and losing. So let's dive in - to see why an emotional reaction is triggered, determining us to take some bad decisions. What makes us disregard a trading plan or strategy that we made to begin with, and have an emotional reaction, then cling to a loosing trade for example, or moving the stop loss, risking more than we planned on a single trade... making it "more special" than any other trade, and how can we overcome these problems.
What are we really looking for?
First we must see that in general we pursue material abundance and in this case winning, not for the sake of material abundance, but for the feelings we can have when things go our way. It can be like a feeling of security, or safety, freedom, fulfillment, and so on. So we must see, it's the feelings we are after, and not material abundance per se, which is more like a means to an end, we could say.
Because of this, we can see that really to us, feelings have priority over circumstance, even if logically we say that feelings are a consequence of circumstance (which is not actually really true, because we have to agree at some level that they do). So because we are actually after the feelings, in case we feel bad, we can react and act in a way that disregards a previous plan for success, and go off track. This is done in order to get rid of the bad feeling, or to compensate.
What is then the root cause of these bad feelings?
Lack beliefs and compensation mechanisms
What seems to look like a cocktail of beliefs, turns out to be much simpler, as we will see that all have as a root some kind of a lack belief, with which we identify. Then we will see that the problem is not at the level of beliefs either, but rather our identification with them. But first, let's look at some beliefs, and how they all boil down to some kind of a lack belief about ourselves.
It could be that we are biased toward one side of the trade, but this is actually holding to one's opinion, which is actually a need to be right even in the face of evidence that it is not right, so it is still a fear of being wrong, where we lie to ourselves to cover up a lack belief. Some other beliefs might be "I'm not good enough", then trying to compensate through not facing the evidence of let's say - being in a losing trade. It may also be - that we had a good record for the month, and we want to keep up a good self image, and we don't accept a losing situation... (that instead of being a small loss, becomes a huge precipice in our balance, or maybe even a blow up of the account).
So basically moving a stop loss, disregarding a trading plan or strategy, is a compensation mechanism, a cover-up to avoid a bad feeling - which is a direct consequence of a lack belief with which we identify. We naturally don't like to feel bad, so we try to cover it up through such actions like moving a stop loss, to get a relief. Unfortunately, this is a false relief, as more anguish comes because of increasing the risk. From this point onward, in case the market doesn't come back, (which happens) this is like a downward spiral which only increases in intensity, to the point of "F* it, I'm going all in" and there goes the account.
So this has to be very clear. That this is a false relief, which only prolongs the agony. So where can we find true relief?
Is discipline the answer?
The vast majority will say - that it is discipline that will get us past this point... but this can only be said in the context of our belief that we can control these emotional reactions. The problem here is - that in an emotional reaction, exactly rationality is disregarded.
So in a sense, trying to discipline ourselves without addressing the underlying problem, and as a consequence not succeeding, only adds another problem to the existing problem. This also opens up the opportunity for guilt and shame, which only worsens the situation, as this calls for more compensation mechanisms.
Also take into consideration that any results obtained through dominating tactics enforced upon ourselves or others in general, are short lived, as one will always try to overthrow domination to feel free, even if that means loosing money... so at one point, discipline is broken, and one can act against its best interest, unconsciously so to speak. Behavior is only a reflection of how we are feeling. If discipline means repression of bad behavior, this doesn't address the root of the problem, but can in fact increase the problem.
Trying to correct ourselves through more fear based tactics, only creates more disconnection with ourselves, and can cause backlash, or an escape through another behavior... like overtrading, or not taking profits, or who knows.
This is not saying to indulge in bad behavior, which is like a symptom, but to operate where is needed, so the symptom doesn't appear, naturally. It's useless to repress symptoms, if the underlying root problem still remains, and continues to have its effects, as symptoms of inappropriate behavior. Our behavior only follows how we feel, and after all the discipline, the question remains... how can we find true relief?
True relief
So if it's not the behavior we have to work on, as we saw that behavior follows how we feel, we might believe that it's the beliefs we have to work on, in order to have good feelings. But maybe it's not even the beliefs we have to work on, since regardless of our beliefs (good beliefs or bad beliefs), it's our identification with them, our investment of trust - is what gives them any power they have.
So the main problem is trusting that these beliefs have anything to do with ourselves.
So getting relief is not resolved by trying to not lose money (therefore not accepting a losing situation, and moving the stop loss, overtrading, disregarding a trading strategy as a cover-up), but through seeing that it doesn't mean anything about ourselves. Winning or losing doesn't mean anything about who we are. If who we are is seen to be independent of winning or losing circumstance and what that means about ourselves (beliefs), therefore being free of lacking possibility, then all that trading remains, is a skill.
For example, in school, if we get grades for a skill, it can be clear that the grade represents only the level of one's skill, but not something about ourselves. This way, in case of a bad grade, it is seen that it is necessary to take more lessons, or do more exercise. If it is not taken personally, by not believing a bad grade means something about ourselves, then we act more like an administrator of our skills, and we can work on them with more equanimity, without emotions interfering.
This way, one can keep pose in his / her life, or trading, even in not so good circumstances. While if this identity is enmeshed with the circumstance, everything becomes a drama, and then compensating mechanisms take place and it's only worse, as we have seen.
You can also read this as an article, and maybe find more interesting articles on getuptrader.com, my site. Thank you for reading.
This thread proposes a levelled approach so to speak, equanimity, rather than being on the rollercoaster of winning and losing. So let's dive in - to see why an emotional reaction is triggered, determining us to take some bad decisions. What makes us disregard a trading plan or strategy that we made to begin with, and have an emotional reaction, then cling to a loosing trade for example, or moving the stop loss, risking more than we planned on a single trade... making it "more special" than any other trade, and how can we overcome these problems.
What are we really looking for?
First we must see that in general we pursue material abundance and in this case winning, not for the sake of material abundance, but for the feelings we can have when things go our way. It can be like a feeling of security, or safety, freedom, fulfillment, and so on. So we must see, it's the feelings we are after, and not material abundance per se, which is more like a means to an end, we could say.
Because of this, we can see that really to us, feelings have priority over circumstance, even if logically we say that feelings are a consequence of circumstance (which is not actually really true, because we have to agree at some level that they do). So because we are actually after the feelings, in case we feel bad, we can react and act in a way that disregards a previous plan for success, and go off track. This is done in order to get rid of the bad feeling, or to compensate.
What is then the root cause of these bad feelings?
Lack beliefs and compensation mechanisms
What seems to look like a cocktail of beliefs, turns out to be much simpler, as we will see that all have as a root some kind of a lack belief, with which we identify. Then we will see that the problem is not at the level of beliefs either, but rather our identification with them. But first, let's look at some beliefs, and how they all boil down to some kind of a lack belief about ourselves.
It could be that we are biased toward one side of the trade, but this is actually holding to one's opinion, which is actually a need to be right even in the face of evidence that it is not right, so it is still a fear of being wrong, where we lie to ourselves to cover up a lack belief. Some other beliefs might be "I'm not good enough", then trying to compensate through not facing the evidence of let's say - being in a losing trade. It may also be - that we had a good record for the month, and we want to keep up a good self image, and we don't accept a losing situation... (that instead of being a small loss, becomes a huge precipice in our balance, or maybe even a blow up of the account).
So basically moving a stop loss, disregarding a trading plan or strategy, is a compensation mechanism, a cover-up to avoid a bad feeling - which is a direct consequence of a lack belief with which we identify. We naturally don't like to feel bad, so we try to cover it up through such actions like moving a stop loss, to get a relief. Unfortunately, this is a false relief, as more anguish comes because of increasing the risk. From this point onward, in case the market doesn't come back, (which happens) this is like a downward spiral which only increases in intensity, to the point of "F* it, I'm going all in" and there goes the account.
So this has to be very clear. That this is a false relief, which only prolongs the agony. So where can we find true relief?
Is discipline the answer?
The vast majority will say - that it is discipline that will get us past this point... but this can only be said in the context of our belief that we can control these emotional reactions. The problem here is - that in an emotional reaction, exactly rationality is disregarded.
So in a sense, trying to discipline ourselves without addressing the underlying problem, and as a consequence not succeeding, only adds another problem to the existing problem. This also opens up the opportunity for guilt and shame, which only worsens the situation, as this calls for more compensation mechanisms.
Also take into consideration that any results obtained through dominating tactics enforced upon ourselves or others in general, are short lived, as one will always try to overthrow domination to feel free, even if that means loosing money... so at one point, discipline is broken, and one can act against its best interest, unconsciously so to speak. Behavior is only a reflection of how we are feeling. If discipline means repression of bad behavior, this doesn't address the root of the problem, but can in fact increase the problem.
Trying to correct ourselves through more fear based tactics, only creates more disconnection with ourselves, and can cause backlash, or an escape through another behavior... like overtrading, or not taking profits, or who knows.
This is not saying to indulge in bad behavior, which is like a symptom, but to operate where is needed, so the symptom doesn't appear, naturally. It's useless to repress symptoms, if the underlying root problem still remains, and continues to have its effects, as symptoms of inappropriate behavior. Our behavior only follows how we feel, and after all the discipline, the question remains... how can we find true relief?
True relief
So if it's not the behavior we have to work on, as we saw that behavior follows how we feel, we might believe that it's the beliefs we have to work on, in order to have good feelings. But maybe it's not even the beliefs we have to work on, since regardless of our beliefs (good beliefs or bad beliefs), it's our identification with them, our investment of trust - is what gives them any power they have.
So the main problem is trusting that these beliefs have anything to do with ourselves.
So getting relief is not resolved by trying to not lose money (therefore not accepting a losing situation, and moving the stop loss, overtrading, disregarding a trading strategy as a cover-up), but through seeing that it doesn't mean anything about ourselves. Winning or losing doesn't mean anything about who we are. If who we are is seen to be independent of winning or losing circumstance and what that means about ourselves (beliefs), therefore being free of lacking possibility, then all that trading remains, is a skill.
For example, in school, if we get grades for a skill, it can be clear that the grade represents only the level of one's skill, but not something about ourselves. This way, in case of a bad grade, it is seen that it is necessary to take more lessons, or do more exercise. If it is not taken personally, by not believing a bad grade means something about ourselves, then we act more like an administrator of our skills, and we can work on them with more equanimity, without emotions interfering.
This way, one can keep pose in his / her life, or trading, even in not so good circumstances. While if this identity is enmeshed with the circumstance, everything becomes a drama, and then compensating mechanisms take place and it's only worse, as we have seen.
You can also read this as an article, and maybe find more interesting articles on getuptrader.com, my site. Thank you for reading.
We are where we are. Not up, or down. Past Equity is not a reason to trade.