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Psychological barrier to pass a certain point / tantalization
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Psychological barrier to pass a certain point / tantalization

  #1 (permalink)
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Psychological barrier to pass a certain point / tantalization

Hi all,

I'm interested to know if anybody has had the same problem I've been facing. The problem is as follows: I seem to have a problem to pass beyond a certain point. This point usually is the starting capital or some other number in your head (e.g. a round big number like 30K or 50K) that is psychologically important to you for whatever reason. It goes like this:
In case of passing beyond starting capital:
  • I fund my account with a certain capital.
  • I start to trade
  • Account goes into drawdown (say like -30%)
  • I come back slowly until the original funded capital is almost restored (say like -5%)
  • Then a couple of bad trades/days happen and account is in drawdown again (-30% or more)

In case of passing a big number:
  • I fund my account with a certain capital (e.g. 20k).
  • I start to trade
  • Account slowly builds up over many days (20k+)
  • A certain big number (say like 30k) is within reach
  • Then a couple of bad trades/days happen and account is back to 20k again

This happened to me a couple of times already and it is really frustrating. What I think is happening is that I mentally get into a sort of overconfidence and then basically overtrade/revenge trade/disregard my process and all that stuff, causing the '1 step forward 2 step back' effect. I also know what to do (which is keep focusing on the process, keeping losses small) but I still haven't been able to pull it off, so I'm still dealing with it. It basically feels like tantalization but I know that is the trap that one must not fall into, so I'm disregarding that. I'm interested to hear if anybody has had the same problem and would like to discuss about it. E.g. if they've overcome it and if yes what special things were needed or not. Or if people never overcame it and maybe even caused people to stop trading altogether. Or maybe it was not a problem at all for other people. I think it's an interesting psychological subject in trading or maybe I'm the only one in the world that has this problem.

Thanks

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  #2 (permalink)
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  #3 (permalink)
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+20K on 20K or 50K in couple days, that is at least 40% in couple days ?
to me that does not sound like normal trading return, you can be a very good trader , but very good traders
don't make like 40% in a couple days

I get the feeling that you are over leveraging ...

as a rule of thumb, you should not risk more than 2% of the account on every single trade
in order to loose from 70K to 50K in couple days, you need to have an increadible string
or looser trades.. how did that happen ?

just my two cents..

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  #4 (permalink)
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Hi rleplae,

Thanks for your reply. I'm not saying +20K on 20K in couple of days. I'm saying the account goes over 20K (hence the +). So it's approaching 30K. And not in a couple of days. But over many days. Sorry if that was not clear. Overleveraging, no. I learnt not to do that anymore. I am speaking about the fact that there is some sort of psychological barrier that somehow messes up my slowly builtup profits in the sight of the end/goal. It's the emotional/psychological barrier I somehow have problems with that screws up the slowly built profits. I know what I'm doing wrong, but it still happens. That's what I'm talking about and that's what I wanted to discuss. To see if anybody else has experienced this. But thanks for your 2 cents.

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  #5 (permalink)
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rdaytrader View Post
Hi rleplae,



Thanks for your reply. I'm not saying +20K on 20K in couple of days. I'm saying the account goes over 20K (hence the +). So it's approaching 30K. And not in a couple of days. But over many days. Sorry if that was not clear. Overleveraging, no. I learnt not to do that anymore. I am speaking about the fact that there is some sort of psychological barrier that somehow messes up my slowly builtup profits in the sight of the end/goal. It's the emotional/psychological barrier I somehow have problems with that screws up the slowly built profits. I know what I'm doing wrong, but it still happens. That's what I'm talking about and that's what I wanted to discuss. To see if anybody else has experienced this. But thanks for your 2 cents.



Sounds like your trading your pnl and not the market. Focus on the process not the results.


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  #6 (permalink)
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yes i can relate to what you are saying
I have been trading profitably for most of this year and to build on that i have certain account balance milestones that when reached i will increase position size. Passed an early one but i am experiencing whay you are describing with the second and more significant one. I have been very close to it a few times only to fall back with a series of losses.
I think i can attribute this to a psychological effect where i become overly keen to achivevthe milestone and in that process i lose my objective read on the market. The milestone is symbolic of my trading moving into a new and more profitable state...yes that excites me....but i cant let that emotion chage what i do.

But i would hesitate to attribute 100% to psych. I also know that market conditions changed with the most recent experience of this...and they were conditions i had not traded my method in before.

Haha yes what Rassi says.....exactly...

I get depressed by how easily people are satisfied, with so little argument.

C Hitchens
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rassi View Post
Sounds like your trading your pnl and not the market. Focus on the process not the results.


Sent from my iPhone using Tapatalk

Hi Rassi,

Thanks for your feedback. Yes, it's trading pnl. And also overtrading, revenge trading. And possibly taking more risk. These are the symptoms. But what causes this? That's what I'm talking about. It's psychological.

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Linds View Post
yes i can relate to what you are saying
I have been trading profitably for most of this year and to build on that i have certain account balance milestones that when reached i will increase position size. Passed an early one but i am experiencing whay you are describing with the second and more significant one. I have been very close to it a few times only to fall back with a series of losses.
I think i can attribute this to a psychological effect where i become overly keen to achivevthe milestone and in that process i lose my objective read on the market. The milestone is symbolic of my trading moving into a new and more profitable state...yes that excites me....but i cant let that emotion chage what i do.

But i would hesitate to attribute 100% to psych. I also know that market conditions changed with the most recent experience of this...and they were conditions i had not traded my method in before.

Haha yes what Rassi says.....exactly...

Hi Linds,

Thanks very much for your feedback. I thought I was the only one who had these problems. Yes, the milestone is often the point when you are planning to trade bigger size. It is known that trading bigger size is creating problems for traders. I guess it has to do with one's personality and psychology. One person is better in managing this than someone else. It's interesting that these things don't happen when account is slowly built up. It only happens when the goal is in sight or some other major event is near that excites the trader. Yes, sometimes the market was different. But to blame the market, is a typical trader's mistake. In hindsight it's easy to say "don't trade your pnl, don't revenge trade, don't overtrade". But afterwards it still happened, that's the silly thing. Since it happened to me more than 1 time already, the desire to reach the goal becomes stronger also and that doesn't help either. It looks like the best is to forget about the goal altogether. OK, it's in the back of my mind but keep focusing on the process should do the trick. It's also a case of self-discipline. Self-discipline must become second nature and anticipating the goal should be banned from my mind. I remember reading some threads here with people saying that trading should be boring and that they don't care that much anymore. I must admit that while building up my account, it was quite boring, and every time I am at the point of reaching my goal, I felt excited, like you say. This is actually the trap.

Becoming another person
I also thought about it this way: during the whole time the account was steadily growing, I was trading disciplined but once the goal was in touching distance, I let the discipline go and fell back in undisciplined trading. It is also often seen in sports, where one competitor is on the brink of winning, but in the end his adversary comes back from behind and beats him. Or the Angstgegner opponent. This is an important point, because it tells me that the disciplined trading wasn't my "real self". Once the goal was reached, my "real self"popped out again. It is said that to become profitable at trading or successful at anything, you need to become another person/change your personality. I think it's applicable in this case. Having started this thread and philosophizing about it was a good idea. Hopefully other people can benefit from it too and anybody is still welcome to share their experiences on this subject.

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Sorry to burst the bubble. This is not trading with a plan.

This is true even if one is not putting on size. It comes from the desire to be right. Not letting a winner ride and not cutting a looser. Well this is what i think....and am more wrong than right

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paps View Post
Sorry to burst the bubble. This is not trading with a plan.

This is true even if one is not putting on size. It comes from the desire to be right. Not letting a winner ride and not cutting a looser. Well this is what i think....and am more wrong than right

Hi Paps,

Thanks for your feedback, but it's a little vague. What do you exactly mean with 'this'?
For good understanding, I am not talking about the plan here, that is execution. That is stuff that I already have in place and use to build up the account slowly and gradually and it works already. Instead, I am talking about the point where the execution of the plans go wrong due to a psychological barrier that exists. If you've never experienced this, it's probably hard to understand what it is. Perhaps you have no problems with any barrier at all. That's is very well possible since no one is the same. That's why I was happy Linds experienced the same thing and that's why I started this thread, to see if anyone has similar experiences and discuss it. I notice some people just enter some comments in this thread, saying "oh but you're trading pnl" or "oh this is not trading with a plan". Although I appreciate these comments, these are merely the symptoms that occur. I want to talk about the cause of the symptoms. But again, not everybody will relate to this I think.

I think it comes more from the desire to get over the finish line. And it was not "not letting the winner ride and cutting the looser". In my case, it came more from overtrading, taking inferior trades, revenge trades. Rules that were in my plan while slowly building the account, but were broken because of my loss of control due to psychological causes which I explained in my previous post.


Last edited by rdaytrader; September 17th, 2017 at 05:10 PM.
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