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Anxiety and Trading


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Anxiety and Trading

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  #1 (permalink)
 snax 
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Anxiety and Trading

I wanted to jot down some thoughts and see if others wanted to discuss. This is something that I will always contend with.

I have a tendency to get into a cycle that alternates between happy with the small steps I make in progress vs high-stress striving towards bigger goals. I don't feel my career outside trading is satisfying enough nor scalable enough to lead to contentment, whereas trading fulfils the need to strive for something greater and the work is extremely interesting.

At the same time, the constant grind usually maintains some steady-state of incredible frustration.

Some of the issues I feel I am constantly dealing with:
  • Am I not working hard enough?
  • Feeling like there are not enough hours in the day to study the markets in addition to working my actual job at a high level
  • Feeling like I don't have enough energy or willpower to work as hard or as smart as I can.
  • Lack of deeper understanding of the market
  • Not knowing how to find the right information about why the market is behaving the way it is
  • Lack of "mentorship"
  • Not certain I am on the best path forward
  • Journey can seem insurmountable at times

Breaking the problem down helps:

ie. "I have an end goal, and a mental picture of what I want to become. Can I take some parts out and see what are the barriers to that goal?"

Journaling helps:

ie. "What is the biggest issue right now that I can understand and control? How do I create a kind of "next segment" along the path forward?"

***

Wondering what other members of our community do to deal with this long-term goal that is difficult to obtain.

Paul Graham writes essays from the perspective of start-ups and venture-capital, but I think they relate to trading very well, here are a couple I'm finding relevant:

How to Work Hard
The Bus Ticket Theory of Genius

Cheers!

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  #2 (permalink)
 xplorer 
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snax View Post
Anxiety and Trading
Wondering what other members of our community do to deal with this long-term goal that is difficult to obtain.

Not necessarily suggesting that the link below applies to you but I found it useful





To increase detachment from the markets I found the Sedona Method incredibly helpful.

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 AllSeeker 
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This is going to sound really weird, and in some cases counter to what we all "full time professional traders" decided to do.

I've increasing belief that the more you earn outside trading the more likely you are to be successful in trading. Not at all joking, if "earning" is not the right applicable scale for you maybe its "how much your needs and expectations are meet outside trading is", in both emotional and financial sense.

Marriage has changed things, my wife has become my sort of "mental guide", she has been supportive of my trading but has also made a very valid point that the "less I look at it as earning source the more money I'll end up making out of it, as that makes me less anxious '.

She has not traded a single trade yet, and doesn't have any interest in it but its funny how she sees these things better than me.

I feel things are correlated with each other. Be it your edge, psychology, money requirements, fears, greed etc etc


//I'm probably not making much sense, but please forgive

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 xplorer 
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AllSeeker View Post
This is going to sound really weird, and in some cases counter to what we all "full time professional traders" decided to do.

I've increasing belief that the more you earn outside trading the more likely you are to be successful in trading. Not at all joking, if "earning" is not the right applicable scale for you maybe its "how much your needs and expectations are meet outside trading is", in both emotional and financial sense.

Marriage has changed things, my wife has become my sort of "mental guide", she has been supportive of my trading but has also made a very valid point that the "less I look at it as earning source the more money I'll end up making out of it, as that makes me less anxious '.

She has not traded a single trade yet, and doesn't have any interest in it but its funny how she sees these things better than me.

I feel things are correlated with each other. Be it your edge, psychology, money requirements, fears, greed etc etc


//I'm probably not making much sense, but please forgive


This does not sound weird at all.

Those who frequent the Psychology section will appreciate your post.

If you are mentally invested in something, chances are you are emotionally invested in it too.

It's all about detachment.


Letting go is key.


Not easy, but key.

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 rahulgopi 
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Goals should be set only to have a general direction, but your focus should be on the System. Winners and losers have the same goal but the difference is winners focus on the System. Every NFL team has the same goal, win Superbowl, winning teams always have a good system in place.

Setting a goal may postpone your happiness and cause anxiety, I will be happy when I am a consistent, profitable trader. Having a system in place and focusing on it will help you enjoy the journey, the process to achieve the goal.

Another way to look at it is to form Identity based habits instead of Outcome-based habits

For e.g two people who are trying to quit smoking, on offering a cigarette, one says

"I don't want it, I am trying to quit smoking " ( trying to adjust habits based on Outcome )

another says " I don't want it, I am a non-smoker" ( adjust habits based on Identity )

small difference, but the second already identifies himself as a non-smoker, and the chances of him quitting smoking are higher.

Trader, goal or identity?

You do not rise to the level of your goals. You fall to the level of your systems. You should be far more concerned with your current trajectory than with your current results.

(adapted from a book I read a long time back - atomic habits )

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 snax 
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I thought about this some more and I believe there are two categories of anxiety:

1) General fear of failure in a big "life endeavor". This is essentially a business for me. I treat it seriously and a lot of frustration comes from the difficulty of juggling the "day-job" which is mentally demanding as well as the markets. I often feel like I'm mediocre at both instead of really good at one or the other. Sometimes it helps to realize I wouldn't have capital to trade with if I wasn't doing the day-job. I could choose to take a year or so off from the day-job and focus on trading 100% but there is a huge fear there that I would fail because its too soon.

2) Trading-related anxiety. This is relatively minor as long as I take small, manageable losses, but I am the worst at holding trades that have open profit. I know I need to get over it but it is a constant source of anxiety as well.

I like the "trader as identity" vs trader as "goal" concept.

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 Salao 
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At this stage in my career, P/L has been a huge source of frustration and anxiety. .

It has taken a few cycles of 'really good' trading and 'really bad' trading to fully realize that P/L results can be...transitory. . It has taken me a little while to learn to be patient with my results.

There is a time and place to look at the P/L, but as @rahulgopi said, in order to not be in constant despair, or in a steady-state of constant frustration (as @snax aptly put it), the focus has to be on The System. And there has to be joy found within the design, tinkering, and implementation of the trading system, or the journey can be mostly grim for most people (I imagine ).

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 bobwest 
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snax View Post
I thought about this some more and I believe there are two categories of anxiety:

...

2) Trading-related anxiety. This is relatively minor as long as I take small, manageable losses, but I am the worst at holding trades that have open profit. I know I need to get over it but it is a constant source of anxiety as well.

Anxiety comes around when things are uncertain in their probable outcome, as well as uncertain in terms of what we should do. You can only do so much about the outcome (not much), but eliminating uncertainty about what to do is another matter.

Another thing for me is to shut my damn mind up while I'm in a trade. "What's going on and what will happen and blah blah blah" are not good things to have in my mind between the time I get in and the exit. My mind is not only an idiot then, but a mentally deranged one. But when I tell it to shut up, it usually ignores me....

What works kind of well is to take the decision-making away from it while also giving it something to do. For me, this has been rule-based exits.

I only exit based on a stop. I've written a few times about using a trailing stop, which I generally have based on something like an ATR line (the Super Trend stop that most platforms have works well), but many things will do. This is only going to work if you are a trend trader, because you can't very well trail a stop if you are grabbing a few ticks or if you're trading a range. It also isn't the natural thing to do if you have a target in mind and you like to set a stop below your entry and leave it there. So trailing a stop may not be a workable idea for many traders, but exiting on a stop (or a stop and/or a target) is something that anyone can implement in some way, depending on their method/style/preference. You can even use a trailing stop to manage "holding trades that have open profit," which @snax mentions (it's designed for this, basically.)

(We're talking about moving it in the direction of the trade, not moving it to avoid being hit. Don't do that.)

Why does it work? I don't wonder or worry where the trade will go or what it will do, and I have given my mind an easy job, which is to bump up the stop as my stop level (whatever I'm using) advances. That's all the little maniac has to do, other than notice that the stop is going to get hit, or hasn't, or just did. ("Yep, I'm going to get hit, guess I'll be out soon." Or, "nope, didn't hit it yet, time to move the stop now." Or, "yep, there it went, I'm out." No worries... cut and dried.)

People who talk about meditation like to talk about "quiet mind." This is "mind only having some simple task that occupies all of its temporarily limited capabilities," which works out the same way, really.

Now, if your trades don't go into a profit, that's another thing to work on. But not having anything to do, other than something super-simple, has taken a lot of the worry out if being in the trade for me and if I lose on it, it's not because I bailed out from anxiety. The big downside of course is that you'll be stopped out by a minor pullback -- maybe before the trade has a chance to even work -- and see a good move go on without you. Well, this is not a solution to every problem, just the "exit too soon" kind. Sorry.

May be worth a shot, though. Adapted to your own style and method of trading, when or if it can fit in.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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 rahulgopi 
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Good for nothing Meditation

Desiring to be desireless, desiring to have a quiet mind, meditation is full of paradox . Meditation with any expectation always leads to more suffering. Quieting the mind or letting go or witnessing the observer etc as a psychological exercise leads to more conflict and confusion for the mind.

Below is a good video on zazen , Good for Nothing meditation as Sohaku Okumura explains.


Few other links on zazen and mortality, since we are on the topic of anxiety .



mortality



mindfulness

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 rahulgopi 
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Long time back, I posted something on coping with discomfort. Discomfort is the point where you either fall back into mediocrity or overcome and excel. Observe the mental resistance, the discomfort, it is the hurdle/challenge one has to overcome to achieve any goal. One has to learn to embrace discomfort, as real growth begins there. So any discomfort you face, whether it is letting the trade run or doing the grunt work, do not cave into it, challenge it, embrace it as it is your next phase of growth !!. Learn to appreciate the discomfort, your opportunity for growth awaits !!.

Do not pray for an easy life, pray to be a strong person...

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