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Lack of emotions?

  • #21
  • Jul 17, 2007 3:37pm Jul 17, 2007 3:37pm
It's all relevent to your mentality of the market.

If you refer to a profitable trade as a "win", you are probably more likely to be emotional when you trade.

This is not a trip to Vegas, folks! Forex trading is NOT gambling, however, some do treat it that way. When this occurs, you'll notice your emotions will swing wildly, just like they do when you lose at craps or at the blackjack table when you've lost.

Now, get your emotions in check and refer to your trading with terms like "profitable trades" and you'll notice that you're probably on your way to becoming more of a profesional, full time trader.
  • #22
  • Jul 17, 2007 3:55pm Jul 17, 2007 3:55pm
Quoting WTB
What a load of non-sense.
I dunno, seems to me emotions should be better saved for things that really matter, like the kids... Certainly I find it intellectually stimulating (win or lose), but it's just money; and I would never judge myself (or anyone else for that matter) on their ability to trade successfully or not.
  • #23
  • Jul 17, 2007 4:05pm Jul 17, 2007 4:05pm
I think what it comes down to is that most people lose more money than they can afford to lose. They've "bet the farm" if you will and its an all or nothing situation. Emotions run crazy...and thats why its so important to treat trading like a job.
You have to have a trading plan....a specific system to trade with and one that works under any market conditions.
Those that don't end up in the trading "loony bin"
Yup....emotions are a funny thing.
  • #24
  • Jul 17, 2007 5:00pm Jul 17, 2007 5:00pm
Hi Mega,

Emotionless trading is not the answer. If you try to trade without emotion you will go crazy because you will be focusing your emotions on not having emotions. You are human. You have emotions. That's the way God made us.

The KEY is for your brain and your heart to focus on the right aspects of trading. You will find success when you learn to focus both your thinking and your feeling on the correct areas of trading. For example, focusing on making money is not going to help you. Focus on finding the right conditions for entry and exit.

I found that when I simply shifted my feelings and thinking from trying to make a buck to protecting what I have, my trading profitability shifted upward dramatically.

I really believe that traders who learn to use their emotions to their advantage come out ahead. Emotions are good when they are focused on the right object and for the right reason.

I have become very emotionally protective of my live account balance such that I will not let myself do stupid trading to lose it. This sort of thinking has me doing the right things that I did not do when I was losing all the time. I have literally not traded my live account for a month even though I wanted to because I took inventory of my mind and emotions and admitted to myself that I had to many distractions going on to focus intently on the job of trading. That's hard to do when you just finished the best three months of trading you've had.

One thing I have done is come up with a list of Ten Trader Axioms. These rules are meant to control me. I memorized these.

We come up with all kinds of trading rules, parameters, indicators and alerts for price action, charts and candlesticks, etc, but what about a clear set of rules that control the trader. After all you are the one who pulls the trigger and the one who ultimately exits the trade. Learning how to control you is the most important activity you can do in your trading.

Figure out what your weaknesses are and then come up with a concise set of rules that you will memorize so that these rules will drop to the front of your brain whenever you are trading. Don't trade without them.

May you have growing success.



.
  • #25
  • Jul 17, 2007 5:17pm Jul 17, 2007 5:17pm
Quoting KudzuFX
Hi Mega,



The KEY is for your brain and your heart to focus on the right aspects of trading. You will find success when you learn to focus both your thinking and your feeling on the correct areas of trading. For example, focusing on making money is not going to help you. Focus on finding the right conditions for entry and exit.


I really believe that traders who learn to use their emotions to their advantage come out ahead. Emotions are good when they are focused on the right object and for the right reason.


.
really well said. I have become quite emotionless, but I never really thought of it like this. My emotion has shifted from anything to do with wins/losses/$$ to that of focusing on executing my trading plan. The only time I ever get emotional is when I break those rules, it has nothing to do with the win/loss/money.

Well put,
Mike
  • #26
  • Jul 17, 2007 5:22pm Jul 17, 2007 5:22pm
Quoting megadave5000
I would be more than curious to the workings of your logic, Peter.
Ok, very briefly, when I first started on the road to enlightenment (through this Forum) I did have the working basis of a method. It had a good win % but I couldn't seem to get a steady growth in my account. I posed a question here about scaling OUT of trades and based on the replies I got I immediately stopped doing it. Now I only close partial positions if there are obvious signs that important S/R levels etc have been hit, and only then if I feel there are strong signs of a substantial loss of profit. I no longer do the '20 pips - move to BE' stuff and along with the refinements to my method (please note method not system) that have taken place over the last 6 months I've not looked back since.

Quote
Thank you for your congrats - I definitely think that I've "gone over a hill" so to speak. Next step: put the order in on the new Ferarri 460 Spyder (red, of course). Just kidding hehe!

-=DAVE=-
If you see me hitching one day, don't ignore me. Remember I was one of those who helped you on the road to riches
  • #27
  • Jul 17, 2007 5:36pm Jul 17, 2007 5:36pm
ForexCoach, I seriously doubt that you are a professional currency trader. A professional by definition acts in a professional manner. Allow me to elaborate... On June 28th I sent you $495 dollars for a Forex Coaching session for July 19th. I emailed you on June 30 asking if you had received my payment, my bank verified that you had. I emailed you again on July 3 because you had not responded to my previous email. Because I didn't get a response back from you to my July 3rd email I emailed you on July 7 again cancelling our appointment and asking for a full refund. I didn't hear back from you from that email either so I called you and left a voice mail, but you chose not to return my call. I emailed you again yesterday reminding you that I had cancelled our July 19th appointment and asked you to verify that you had received my email, I also asked you why I had not gotten a refund yet. I also PM'ed you here at FF yesterday. Still no reply, yet since my first email to on June 30th you have made a total of TWELVE Different Posts here on FF yet you have chosen not to take the time to write a single email response to me. I would like an explanation for why you have not sent me a refund? You cannot honestly call yourself a professional if you do not act in a professional manner. You have not been professional with me, I did nothing except ask for a refund from you and you have avoided all emails. That's not acceptable. You shouldn't be allowed to have a link to your website on a great forum like FF.



Quoting ForexCoach
It's all relevent to your mentality of the market.

If you refer to a profitable trade as a "win", you are probably more likely to be emotional when you trade.

This is not a trip to Vegas, folks! Forex trading is NOT gambling, however, some do treat it that way. When this occurs, you'll notice your emotions will swing wildly, just like they do when you lose at craps or at the blackjack table when you've lost.

Now, get your emotions in check and refer to your trading with terms like "profitable trades" and you'll notice that you're probably on your way to becoming more of a profesional, full time trader.
  • #28
  • Edited 10:14pm Jul 17, 2007 6:38pm | Edited 10:14pm
Quoting mbqb11
really well said. I have become quite emotionless, but I never really thought of it like this. My emotion has shifted from anything to do with wins/losses/$$ to that of focusing on executing my trading plan. The only time I ever get emotional is when I break those rules, it has nothing to do with the win/loss/money.

Well put,
Mike
Sounds to me like you know where the Trading Zone is. I think in the Trading Zone the emotions, the intellect and the will power are in relative balance. That's a great place to be whether trading or wearing the yellow jersey in the Tour de Fr or repelling off the side of El Capitan or even shopping for bargains at the store.

When we have such control over these inner parts of our being, I believe we can find just a much trading satisfaction in waiting for the right set up as in executing the right trade.


.
  • #29
  • Edited 9:49pm Jul 17, 2007 9:37pm | Edited 9:49pm
There have been some great posts already in this thread. I don't disagree; psychology in trading is a very personal issue; each individual has to find the optimum way of dealing with his or her own temperament.

Anyway, as a preface, I would like to say that my personal approach to stress-free trading is likely not for everybody. In fact, I expect it will strike a chord with very few. But in case anybody is interested, here is how I've been managing to trade - and I can say this with total honesty - with 100% emotional detachment.

For the record, I'm currently trading a $10,000 account and allowing a maximum of $250 risk per trade (fixed fractional sizing).

Like WTB says, it's money and excellence that are on the line. Here is how I overcome both.


1. Money:
I only trade with money that I can afford to lose. Moreover, I have gone one step further: I've mentally written off the $10,000 at the outset. I view it as capital that has already been spent on R&D and education, money that is no longer mine. I will continue to trade until the account is blown: since I've already paid the cost of the "course", I owe it to myself to take my education as far as I possibly can. I'm sizing my positions modestly, to further prolong my education as long as possible. And if the account is blown, I'll simply revert back to demo trading.

If the account happens to grow into significantly positive territory, then I'm playing with the market's money, so there is no stress in losing that. (In fact, I may even enjoy spending some of it!)

It is one of the truisms of life: divest yourself of material ownership; for whatever you hold fast to, you become its slave. When you truly have nothing further to lose, you are totally free. I'm not a Zen Buddhist, but I see significant truth in that idea. As a trader, I seek to be totally free from anxiety and stress.


2. Excellence: Expectation and Outlook:
Disappointment and frustration are invariably the result of unrealized expectations. I have no expectation of profit or performance, and definitely no monthly goals. I've read that 95% of traders fail, hence I realize that the odds are stacked against me, from the outset. But I also realize that there are some who trade profitably, year in and year out.

I treat trading as an enjoyable and educational experiment, a fun game of expectancy. I do not treat it seriously as a business. I realize that the very best I can hope to do is make what are, to the best of my growing knowledge, high probability entries and exits. My focus is trading my (albeit currently evolving) system as accurately and consistently as I can. What happens after that falls completely outside my control, in the realm of risk and uncertainty (call it "luck" if you like), and there's nothing I can do about it. Hence there is no despair, loss of self-esteem, or shame, attached to my trading losses. The fact is, if prices happen to trend far enough between entry and exit to overcome costs, my account balance grows; if not, it falls. There is no way around this reality, and no point in complicating it.

Again, I return the philosophy of personal divestment. The more I try to treat trading as my primary business, the more stress I create for myself. The more intensely I focus on profit, or performance, the more obsessive and desperate I become. So I will keep things low key. It's a bit like sleep: the harder I strive to fall asleep, the more difficult the struggle becomes. It is simply a matter of letting go, being grateful for the enjoyment of the ride, and the learning experience, that the markets are able to provide.

The fixed fractional sizing method is pretty cool! The law of diminishing returns means that losses, in absolute dollar terms, will get progressively smaller; while conversely - if the account gets into positive territory - the gains compound exponentially. Hence if I do eventually fashion a positive expectancy method, there's the possibility that I could - over time - make some big money.

Finally, trading is only one small part of my life. Money is not important. People are. If I do happen to make some real money trading, then I plan to use it to help others less fortunate than myself.

I want to stress that I'm in no way pessimistic, or fatalistic; my expectations are neutral, philosophical and (I hope) pragmatic.

I realize that there are those who will disagree strongly, i.e. they believe that it's important to trade seriously, and strictly as a business enterprise; I believe I understand their reasons for that. But I won't ever allow trading to become my primary income source; for as long as my account stays afloat, trading will always remain an enjoyable hobby. And if it ever does bequeath me financial freedom, then I guess my current career path and lifestyle will change significantly: a possibility that's definitely worth working towards!

If emotional attachment is one of the main reasons that the 95% fail, then IMHO it makes sense to take whatever steps are necessary to eliminate it right from the outset. If we can conquer the MIND and MONEY areas ("money" is really nothing more than preserving capital by applying modest, consistent position sizing), then that just leaves working toward a positive expectancy METHOD, a process of research and experimentation.

Keep it simple..... why spend part of your trading bankroll on NLP, hypnosis, trading coaches, psychoanalysts, or even Mark Douglas books?

Like I said, this is merely my simplistic approach. Might not be for everybody, but - well, at least thus far - it's worked for me.

Best wishes to all
David
  • #30
  • Edited 10:13pm Jul 17, 2007 10:12pm | Edited 10:13pm
Quoting ForexCoach
It's all relevent to your mentality of the market.

If you refer to a profitable trade as a "win", you are probably more likely to be emotional when you trade.

This is not a trip to Vegas, folks! Forex trading is NOT gambling, however, some do treat it that way. When this occurs, you'll notice your emotions will swing wildly, just like they do when you lose at craps or at the blackjack table when you've lost.

Now, get your emotions in check and refer to your trading with terms like "profitable trades" and you'll notice that you're probably on your way to becoming more of a profesional, full time trader.
Though many people stipulate that trading is not gambling, I think you're right in that they treat it as such. However, I think that most people use the word "gambling" to mean much more than just rolling dice or the more formal definition "making a wager on an outcome decided by chance alone". Some would say that driving in the oncoming traffic lane is a gamble, but they really mean it is a gigantic risk with lots of downside and little potential upside made in a reckless manner.

While some think that playing poker is a form of gambling, ask Johnny Chan or Phil Lederer (sp?). They treat poker as a business and know that there will be ups and downs. They have a plan of attack based upon dynamic conditions and know how to manage their money to keep them in the game. They're well aware of the mathematical and statistical probabilities presented to them and can rely on a bit of intuition when the moment calls for it. Does this sound like a gambler, or an experienced trader who treats trading as a business?

Anyway, I won't bother with that anymore. Just a fun thought I'm having after a long day at work and a couple glasses of wine. The Dow broke 14,000 people! I'm going to have a long day again tomorrow. Maybe I'll have another glass....

-=DAVE=-
  • #31
  • Jul 17, 2007 10:23pm Jul 17, 2007 10:23pm
Quoting KudzuFX
Sounds to me like you know where the Trading Zone is. I think in the Trading Zone the emotions, the intellect and the will power are in relative balance. That's a great place to be whether trading or wearing the yellow jersey in the Tour de Fr or repelling off the side of El Capitan or even shopping for bargains at the store.

When we have such control over these inner parts of our being, I believe we can find just a much trading satisfaction in waiting for the right set up as in executing the right trade.


.
Kudzu and Mike,

Your posts are really well-put. When I think about it, I guess that my emotions certainly may have shifted. Mike, I like what you said about not focusing so much on the wins/losses as you are focusing on sticking to your plan and executing it. Kud, same thing in waiting for the right set up. I just watched a good trade pass me up last night on the GBP, but something just didn't jive smoothly with my trading plan. Turns out, I would have made money - a good trade was passed up. Am I regretful? Nope. It didn't look like something I'd take home to Mom, so I let her go. I'm certain that even in a market of uncertainty there will be more trades to win that have better set-ups.

Thanks guys, I like what you said and I'll keep it in mind when I'm looking at my charts!!

-=DAVE=-
  • #32
  • Jul 17, 2007 10:45pm Jul 17, 2007 10:45pm
Quoting PeterFM
Ok, very briefly, when I first started on the road to enlightenment (through this Forum) I did have the working basis of a method. It had a good win % but I couldn't seem to get a steady growth in my account. I posed a question here about scaling OUT of trades and based on the replies I got I immediately stopped doing it. Now I only close partial positions if there are obvious signs that important S/R levels etc have been hit, and only then if I feel there are strong signs of a substantial loss of profit. I no longer do the '20 pips - move to BE' stuff and along with the refinements to my method (please note method not system) that have taken place over the last 6 months I've not looked back since.

If you see me hitching one day, don't ignore me. Remember I was one of those who helped you on the road to riches
Hey hey Peter,

I remember reading some of that thread on scaling out. I must say, I learned a bit from it - I appreciate you sharing your background! I, too, use a method and not a system. Though there is an element of discretion involved, I have yet to read a post on any forum in which one person actually stated that they went from a pittance to wealthy with a mechanical system (like an EA) and posted their EA and broker statements. I could be wrong, I may have missed something, but I think I'm probably going to be waiting for a while.

Peter, if I ever see you thumbing it down the road I'm going to call a Hum Vee limo with some bikini-clad women in it to come pick you up. We'll meet up at a nice bar to shoot the breeze.

-=DAVE=-
  • #33
  • Nov 12, 2007 1:39pm Nov 12, 2007 1:39pm
Quoting megadave5000
Here’s a question that has been plaguing me for the last day or so.

I’ve blown three mini-accounts in my day. Recently, I opened up number 4 after taking nearly a year off of live trading to get things together and demo my way to a real account again. I would like to think that I have the hang of it now, at least I can tread water. I feel confident.

Anyway, yesterday I entered my orders (entry, stops, take-profits) in the morning and made 77 pips in the GBP/USD while I was at work. Everything functioned perfectly! My method performed exactly as it should, there wasn’t any guess-work. This was my biggest trading win in my life. Seriously I think that this is the most pips I’ve won – ever! In other words, I’ll bet that if I go back over the statements of my old, blown accounts and add up the number of pips won, it will equate to less than 77.

Good for me, but now on to the more interesting part. After the win, I felt less emotion than I do after eating a semi-tasty snack. It felt pretty good, I’d much rather have a win than a loss of course, but a lot less invigorating than I remember wins feeling in the past. When I was blowing up accounts left and right, I remember feeling my heart race tick-by-tick! Wins were better than a drug, losses were devastating. Yesterday, I was only mildly surprised to see that my buy was triggered since it was so late in the morning (NY session). I watched the price advance and decline in normal up-and-down fashion and really only checked in every hour or so to see how things were (I need to use a free forex data site from work, no access to MT4). The ups and downs came and went, and soon enough I knew that my TP was triggered. But I didn’t jump out of my seat and scream with elation. I actually didn’t even take a break to congratulate myself for my win.

To all the profitable traders: is this normal? I know everyone says one needs to conquer emotion, but I just didn’t have any to conquer yesterday! I used to be able to predict how my emotions were going to respond, but it seems really weird that the effort to remain calm and rational was so minimal. Anyone else notice that conquering emotions becomes less of a problem due to the LESSENING of emotions in trading?

Thanks for your thoughts.

-=DAVE=-

Been exactly in the same situation, and like said in the happy club

Good luck all,


BK
  • #34
  • Last Post: Apr 5, 2015 3:32pm Apr 5, 2015 3:32pm
Quoting hanover
Finally, trading is only one small part of my life. Money is not important. People are. If I do happen to make some real money trading, then I plan to use it to help others less fortunate than myself.
Thank you for that David.... This is what real humans are... People like you and Ferru,
which has a very good knowledge, helping us, to find our way... without many tool from you, we had no chance.

Wish you all the best

Jo
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