Favorite Futures: index and currency futures, stocks, options, warrants
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The outcome of this trade is still unknown, so you still have risk on.
Any ideas about studying silver are just ways to justify not exiting the trade
The hardest thing to do is the best thing to do - The pain you experience from crystallizing the loss will go a long way to making sure you don't repeat this error. Traders are managers of risk. Cutting the trade is the best way to internalize this at your core, not just understanding it intellectually.
You'll also feel a hell of a lot better once you have accepted the loss and moved on. You can't expect to develop as a trader while at the same time not sticking to the number one rule of trading
please don't think this is post is having a digg - I've been there so I'm speaking from experience
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Come to think of it, I should really avoid anything to do with precious metals, especially silver and gold, until I am way further along in my development as a trader.
Until I get my psychology in order.
The reason being that just the very thought of gold and silver sets off a whole bunch of associations in my head. Religious, political, familial. The whole global macro picture. I pretend to be objective, but at heart I am a gold/silver bug. Almost a little bit ashamed to admit that. There I said it, I am a closet gold bug. I think my inner gold bug took over my mind when I took that trade.
Anyway, when you peel away the surface attitudes, there is too much of the religious true believer in me to go anywhere near precious metals.
It's just exactly like AAPL. I know myself well enough to have a trading rule against trading AAPL. It's a quasi-religious thing. Maybe Carl Icahn can master it, but I sure can't.
There's a reality distortion field around gold and silver for me, same as AAPL.
Maybe a different perspective should be in place. What does it mean not to take losses personally?
Accepting that you will have losses is something that most reasonable of people understand.
Accepting that not all things go your way, in life and in trading, is something that most know.
I propose the following: Take it personally. When you start taking things personally you develop a standard.
You develop your values because it's affecting you. It is affecting your CASH.
A paper trader takes a loss, sips his latte and says "s**t happens". I am not sure that a professional trader takes the same approach to things.
If taking a proactive approach would lead to improvement of things, then take it personally.
Remember, adding odds of 1 to 2% in your favor could POTENTIALLY improve your odds substantially.
Above all, read @tigertrader his posts are golden.
PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
Last edited by mattz; February 10th, 2014 at 01:53 AM.
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I am not advocating behavior which would tend to be unprofessional, like throwing a chair out of a window, but I agree with @mattz -- anyone who loses a shitload of money and says "that's okay, not a big deal," is not a fucking trader. Do they engage in stupid behavior after a loss? No, that would be unprofessional. Do they get pissed off enough to work on their craft? Hopefully. It's necessary to detach the emotional component of losing insomuch as it does not affect the next trade--this can lead to trouble. But losing money sucks, and anyone who says otherwise is full of shit. You have never heard so much cursing as when you are in a group of professional traders who are having a bad day. Makes a group of cursing sailors seem like saints.
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Everyday in the evening, ask your spouse or significant other if they can tell - just by looking or listening to you - if you made or lost money that day.
If they can tell, then you are internalizing the losses. You don't need to tell anyone, since it is basically "written all over your face." Not good.
If they cannot tell, you are in a good place.
10 years ago, my wife could tell pretty easily. Now, she has no clue if I am up or down on the day. This is good for her, too - since my losing (and winning) days are a bunch bigger now that they were 10 years ago, she doesn't know about (and get stressed out by) the BIG days.
This exercise will go a long way to not taking losses personally. At least it has for me.
If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
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Good advice in this thread from the few posts I've read so far. A business expense is a very good mental belief, yes belief (you have to believe it to access the emotional benefits from it, ask a psychologist working in cognitive behavioral therapy, etc.), to have in order to minimize negative emotions and attempt to hold a hopefully less emotional view. Don't focus on thoughts about loss and then get the bad feelings in your stomach from them. Immediately stop and say or think out loud -- "well, it's a expense of the business, the business in probabilities management." If you find yourself thinking a lot about losing trades and losing money ultimately leading to failing and this is making you feel bad, you are building negative neural pathways in your head that become stronger and more entrenched mental habits as you think them more (same as building muscle). Whether the possibly negative events in the future are true or not doesn't matter to the emotional brain -- just thinking about something bad is similar to experiencing it (you can trigger the amygdala via imagination). Repeatedly triggering this type of stress isn't helpful to critical thinking at all, so you are therefore giving yourself a disadvantage by thinking this way. So tell yourself that and reason with yourself why it is not logical to worry about each individual trade. It's a drop in the bucket of trades, a business expense, etc.
You need to be good at managing capital and emotions.
Here's something I find very important to myself:
For me at this point, there is a difference between the "I don't care" size and the size wanted for financial goals (the place I want to be in 3-5 years). I think the process is more stress-free if you put the "I don't care" size in front of the financial goals, being diligent and disciplined enough to learn and interact with the market as an exercise of unbiased (as good as we humans can do..) good habits, then letting money be the result that grows behind you as a result of your good habits, eventually fully financially supporting you while you are happy doing it -- you have a good attitude and are excited about it going into the day. That matters a lot. There is certainly a lot more pressure on you when you are going into the day thinking "I have to make this happen." It lends easier to trying to make the market work to what you want, and it needs to be the other way around.
The "I don't care" size (for me, less than 1% of my account) is a better edge for me because it allows me to enjoy the experience of trading and enjoy what I do better than when I'm worrying about a financial target. I try to acknowledge that for me, stress damages critical thinking. For example, if I am taking trades with a daily money goal and take a loss in the beginning of the day, if when the next trade is in my head and I feel a bit scared about another loss, I'm letting emotion in and not thinking as objectively as possible. I'm adding on another decision factor that shouldn't be there. It should only be focused on the cases for the bulls and the bears. As someone competing against systems where emotions aren't involved, I try to do what I can to limit the emotions I have.
Like I said, I'd rather let the money grow behind me slowly as I do the right thing constantly, and in time it will grow. But money can't be the thing that I want to put in front (horse & buggy situation -- put the correct one first).
That's just a thought if emotions are getting to you and you get upset about losing a trade. To a certain extent, your dollar size is probably affecting your thinking process, but sometimes it's hard to notice because emotions are so subtle. Sometimes we feel the emotions then build reasoning around it and are not aware we are doing it. Bad rationalization. On a final note, bajillionaire fantasies can be healthy for motivation, but just like how there is always an other side in the market, there's an other side to this -- it puts pressure on. If you need to offset some pressure then drop down in risk and don't obsess too hard on fantasies (even simple ones about just having it as your living) -- focus the effort on learning. There is only the present and if you are not focusing your mind's strength in the correct place in the present, then you are only wasting time, which is the biggest asset you have.
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