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Good question Dionysus. Let me be honest about my fears as I explore a resolution:
Why does a loss bother me so much?
1. As soon as a take a loss I feel immense fear that Im not going to be successful (scarcity fear)
2. I'm mad at myself for taking the trade, even if it was preplanned and had what I felt was a reasonable reason to take the trade (I always feel guilty taking a trade....in other words I never feel like I did enough to enter the trade). Not really thinking in probabilities obviously. And I have some belief challenges that need to be addressed.
This notion of having to be right is debilitating. I need to change my belief that losses are a natural part of the game. IF, I believed in my own consistency, I probablywouldn't fear a loss so much.
The fear of missing out is a close one also ,,,, - hindsight regret ... I'm still working on that one .
I am almost over taking a loss in a trade that was executed well and to the plan, I didn't move my stop and
was just plain wrong... I can deal with that.
@tderrick: Although you still regret missing a good trade, it appears you are able to distinguish between a bad decision and a bad outcome. This is important, because you can control your decisions , but not the outcomes. It stands to reason then, that you should focus on the process and not the outcome of a trade, or at the least , focus on the outcome less frequently. Try not to take such a myopic view of your performance and your P&L. Try not to frame every trade in isolation from all your other trades - mentally integrate all your trades and look at them as a whole. Imagine making 10 trades a day, 5 days a week, 52 weeks a year, 250 days a year - that's 2500 trades in a year. As long as you are limiting your losses, and your winners are bigger than your losers, how is one losing trade or two or three losing trades, going to degrade your overall/ long term performance?
You can also try using the framing strategies enumerated in the attached article. The objective of this line-of-thought is to maximize psychological pleasure and minimize pain (regret).
This is all very good logic- My problem was that although I would think of this logic - Once the event triggered the emotion would take over and throw my plan out the window. I learned for me that in the battle of logic over emotion
emotion would always win.
There were things in my subconscious that would trigger the emotions and I finally got professional help to remove them. The process of removing them was fast but it wasn't cheap but I could not have moved forward with my trading without it.
to convey ideas to other human beings, we must amend their perspective, their point of reference on the matter, to see it anew from an entry point that they will understand
to spare them the inevitable beatings of otherwise learning it the hard way
The thing that clicked for me was the realization that I was placing trades and hoping the market wouldn't hurt me by taking away some of my money. I then piled on the idea that this one trade will also cascade into many many losing trades.
The other thing that was a real light bulb moment for me was the complete realization and acceptance of the idea that consistent patterns (and actions) provide zero guarantee of consistent results, on a per trade basis. I came to realize that I felt betrayed that I was following the rules, watching the stops, not overtrading etc etc etc and the trade would still lose. And I was PISSED! 'How DARE YOU lose????!!!' was what was unconscionably going through my mind.
It was only when I fully got that a consistent pattern doesn't ensure a consistent result *this time* that I finally detached from the betrayal I was feeling at each trade's result.
Not one of my better mental days. I put on two trades that under-performed the market. I also sat idly by watching two others go wild that I had been stalking for weeks and I refused to enter all because I didn't get the lowest price possible. It's something that happens to me a lot. Even if the risk/reward is still good I won't chase it.
The two stocks that went ballistic combined for over 15% on the day. The two I did enter were basically a wash. They were low beta slugs.
I took it very personally that I bitched out on entering those other two trades.
It's okay, don't beat yourself up. You never know if you don't get in. If it's your setup take it, cut your loss short if it doesn't work. It's easier said then done. I have the same problem you're describing. I'm working through it. Are you trying to pick bottoms or tops? I know that was my problem. Happy Trading!
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