“If you
are driven by the stock price you are going to go crazy.” – Michael Bigger
There’s no speculator in the world that hasn’t, in one
period or other in their career, experienced the emotion of anger. Every trader
becomes angry because of some reasons. Even the renowned Dr. Van K. Tharp (a
trading specialist) was once trading in an angry mood. Then, he was losing and
he became angry. The more he lost, the angrier he became and the more he lost.
Trading is hard enough. So any factor that makes the matter
worse - whether internal or external – would only add up to our livid state of
mind. For many traders, it’s because of negativity they sustain now and then.
Traders and investors are angry and you can see that in their comments, actions
and trading results.
“What is my broker doing to me? Yes, the loss is becoming
bigger and bigger. The account is going down. That fundamental analyst is an
asshole! The website that recommended these shares as a sell opportunity has
clearly misled me. They don’t know what they’re doing. Don’t they know that the
trend on the chart is up, the MACD signal lines and histogram are above the
zero line, and the Parabolic SAR is below the price? What are the Fibonacci
ratios doing? Why couldn’t they use Andrew’s Pitchfork? Albeit, most renowned
chart analysts also thought the shares would plummet. Why does the market
always have me in mind so as to ruin me?”
Nevertheless, does anyone care? Culpable souls, events and
situations are no longer a curiosity. Are they? We blame our leaders and
politicians? You criticize anything or anybody that falls short of your standards
or expectations. You deprecate positions that aren’t going in your favor. You
are quick to judge everything around you. Signals strategists, brokers, North
Korea, Euro’s unpredictability, Mark Carney, technical experts, software
vendors, cliques, trade shows, central banks, interest rates, earthquakes,
cyclone, harsh winters, the unrest in the Middle East, unemployment rate, power
failure (you also want to sue your Internet service providers), global warming,
stock tipsters, TV media, tape readers, assassins, nuclear holocaust,
hypocritical religions. You condemn your cruel manager, selfish chairman, CTAs,
CFOs, UFOs, scalpers, high frequency trading, position traders, your fellow
traders, insider traders, the bulls, bots manufacturers, drug dealers, street
thugs, traffic jam/noises, racism, unfulfilled promises, unequal opportunities,
bleak future, headache, sky-high commodity prices, Cuba, Syria, and Central
Africa. You deprecate your printer, your pet, incompetent cook, harsh tax laws,
police surveillance, your irritatingly haughty neighbors, and unforgiving
spouse. Your favorite team lost their match. Your kid is a nuisance; and the
list goes on. You are frustrated with everything.
“I know what I’m doing. It’s those skunks that are insane.
This thing has made me vulnerable; I can’t control what the price is doing to
me, for I’m just looking at the screen helplessly. My situation is hopeless – a
prey of those institutional speculators. Why is Smart Money after me? Why do
they want to ruin me? Why are they so bold? But I made the right decision
before I sold the shares!”
Can this approach help you?
You’re blindly furious, you punch you iPad, bang the door,
break the dish, swear oaths loudly, scream at a skunk, threaten the security
guard, or drink yourself into stupor. You’re totally helpless. You can’t be
helped until you see yourself as the source of your trading problem and the
source of your solution. You create the trading results you get. Stop blaming others
and put the blame on yourself; otherwise, you can’t find any solution. If it’s
going to be, it’s up to you. The things, countries and the people mentioned
above (plus anything/anybody you might’ve condemned), didn’t place your trade
for you. You made your own trading decisions and you should accept the outcome.
You can decide to buy, sell or remain neutral – irrespective
of what experts or automated signals are saying. No-one forces you to take a
position against your wish. You think it and come up with a resolution. If you
make gains from your trading, who do you praise? According to the quote above,
those who watch the prices every minute are going to go crazy. It pays to focus
on the big picture and stick to your safety rules in trading. Day trading is
full of stress and you’re bound to get offended by the markets. You can’t enjoy
profits without experiencing the bitterness of losses. Sane traders know how to
accept profits and losses with calmness of the mind, no matter how long a
losing or a winning streak is. They just keep on managing their positions and
controlling their losses. For those who passed out of the school with good
grades, achieve enviable results in other areas of human endeavors, collect
paychecks regularly etc., it’s not easy to accept loss in trading. They prefer
100% hit rate if possible. They don’t want to think that they can still survive
in the market with only 33.3% hit rate.
R. J. Hixson says that trading in an angry or depressed
state can be as dangerous to your equity as trading in an ecstatic state. Anger
can’t improve any statistics in anything, as far as your trading career is
concerned. The angrier you’re, the more blunders you’d commit, which you’ll
eventually regret. Make sure that you speculate on the trends you can
comprehend and the markets you prefer. Even if your stops are hit after that,
it’s your decision. Don’t add to your losers!
Conclusion:
Instead of deprecating your adverse lot as a trader, you can trade
successfully. This is the good news. Help is available. You just need to
develop deep love for the markets and fuel your passion for successful trading
principles by talking and sharing it again and again. Talk and discuss trading
and its potential. Discuss with people of like passion…. Don’t spend time on
wrong information that could dissipate your zeal; don’t get discouraged by
those who’ve no passion trading.
This piece is concluded with the quote below:
“It's difficult to trade with a peak performance mindset
when you're in a bad mood. The more you can control your emotions, the more
likely you are to maintain a winning edge.”
– Joe Ross
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