Controlling your emotions

I believe emotions run high because the trader lacks planning.

Todays traders isn't planning, instead they're speculating on market outlooks and going whole heartedly off that alone.

Emotions come into play when the trader realizes they're wrong in their analytics and hasn't protected the exposed position.

A planned trader has ran every scenario before the trade is open and proceeds accordingly. The planned trader has a solid entry, position protection, and profit targets.

The planned trader's position is 'iron clad'. They've prepared for the best and worst case scenario so there is no need for emotions at this point.

Smaller the position the lesser the emotion. Find your balance.

Fred just told me to bet the farm on audusd short. CM says he's full of shit. Think there's going to be a fight.

I'd be interested in knowing what folks do to bring themselves back to center once they are out of control emotionally.

I have found that the more I practice with my strategy on a demo account (and boy I treat that monopoly cash as the real thing) I have learnt to trust my system, strategy, trading rules and most important your money management. Sure I have backed a number of trades which have gone the wrong way and cost me. Never the less when the strategy gives an entry system enter the trade. No trader will hit 100% but ride the ride and trust your system. Never trade with more than you are comfortable with. Use the demo accounts to hone your skills. Most of all enjoy yourself. It hurts to lose but what a rush to win. Just keep calm, pick yourself up walkaway, gather yourself, have a coffee and go again.

Great Post

Great Post

Nice Thread

You have to be able to acknowledge it first - Then its simple. You STOP.

What I do is a bit insane but its almost like multipersonalities

One is the Boss (or Planner) - His Job is to create the goals. Plans. Strategies. Rules before a trading day and review results at the end of the week....

The other is the worker (the trader) - His Job is to trade the plan and al the rules that go with it - Simple!

If the trader is getting out of line the Boss is quick to kick his ass as that wasnt in his plan.

if u can adopt this mindset its quite powerful in lots of aspects in trading like dicipline, Patience - It fkn nuts I know but it works for me

The thing is the "trader" is just doing his job so theres no need to get emotional cause its not his organisation. The boss can get emotional but he is never on the front line trading.

Hard to explain but if you ever read my old War Games journal it may make more sense

EDIT: I think the important thing that I havent seen anyne acknowledge yet though is that you first need to know what you're doing! I mean its so obvious but if your method is a losing method there no point in taming your emotions - At the least youll blow ur account quicker instead of a slow death!

For the above to be of use this is imperritive. IMO of course

And I will add that in REALITY the "BOSs" in my case takes the form of a written trading plan for every day and the "worker" is me sityting there with my finger on the trigger. I guess its about always being CONSTANTLY AWARE of the mind you were in BEFORE you started trading that day and holdng its authority in higher esteem than whatever your mind is telling you to do now

Theres no I in TEAM!!!!

Hm try thinking of yourself as an organisation not a single person. Delegate and make sure your employees are puling their weight

Bill Williams (who I believe has a background in psychology), had a really interesting example about the functionality (or should I say dis-functionality) of the human mind. Please correct me if I'm wrong, I read it in one of his Market Chaos books (the latter one) many years ago.

He basically states that the brain is naturally configured to work in a sitcom type fashion:

There are 3 room mates living in a very small apartment.

The Cast:
Left side brain, Center Brain, Right side brain

Left - is our conscious mind. This is the part I am using now to type, and you're using to read. Otherwise known as the village idiot it process something like 12 bits a second... or something along those lines.

Center - Known as the subconsscious mind it is capable of processing well into the millions of bits per second, and is largely responsible for all the things we never consider on a conscious mind level... like breathing, blinking, and making sure we don't piss and shit ourselves.

Right - our creative mind. Scientists are still not certain of the processing power of the side of our brain. Theories run from the creative mind having an unlimited amount of processing power, to it basically being the portion of our mind which is directly connected to source (i.e. God).

Plot
So, folly ensues when the three roommates struggle to get along. Left side walks around the apartment bumping into walls and knocking shit over because he's an idiot and completely underdevloped. Center sits on the couch with no sense of social skills processing ideas and concepts without ever putting them into practical use. And Right side stays in his room all the time, drawing, or writing poetry, or who knows what. And to make things even worse, none of them speak the same language.

When you visualize that scenario, it's extremely easy to see why we have such a hard time with things like emotions, or figuring out why we do some of the things that we do (i.e. making impulsive trading decisions even though our trading plan/system says otherwise).

p.s. - sorry if I butchered Bill Williams' example. I read it a while back, and I'm working off of memory here. I definitely recommend reading it. Not a huge fan of his technicals, but the psyche portion of the book is solid.

i blew up and account then i have made a 2 year plan. write it down. made monthly targets for profits. divide them into weekly and daily targets. and then start trading again.

i start from very little targets and achieved the first 6 months target in just one month. only because i divided it. actually if u only think of yearly or monthly target. we feel a pressure of it. but if divide it in small parts. the pressure is losen.

Yep. If you lose your focus just stop trading a few days.

Interesting the sitcom mr.marketz :-)

There is an article explaining the blood flow in your brain when facing a danger or stressful situation. The article is applied on trading an explain why we broke the plan.

Basically:
When you face an stressful situation, blood leave the front of your brain (point A) and go to other point in the brain (point B).

Point A is used to think about the future. Plans. Consequences.

Point B is used to make fast decisions. Fight or scape. Survival.

Now, just imagine what happens if point A have no blood and point B is plenty of it.