Trader's Challenge: Keeping the demons in leash

AceX

Active Member
#1
I have often wondered and genuinely (still) striving to keep the emotional quotient of trades under a constant leash.

Opinions vary, on how to achieve this:Advices include, "treat-this-trade-as-just-another-trade" to "control-your-greed-and-fear".

But as much as it is a challenging job, that much it is a self-exploratory journey.

Readers Caveat: I am not a 'pro' trader. Heck! seasoned guys over here will see me, asking for advice and help in equal measure. So, I think, I need not repeat that, take whatever I say with a pinch of salt.


Self-Exploratory it is, because Dr.Elder for whom, I have immense respect himself says, good traders graduate from school of 'hard knocks'. I suspect the exploration came through the self-introspection arising from those pains. Apologies, I digress. But the crux of the matter is, how do real traders: keep their demons, fear and greed in leash.

For instance, methodology: watch the trend in a higher timeframe, take positions near the EMA,liquidate near the channel edge.
Overriding Signals: Watch out for divergences and falling volumes and weakness.

Is it guiding me? Hell yeah.

But as they say, 'there's many a slip twixt cup and the lip'

I am shackled by my own self-ignorance. Fear and Greed. Once the price starts moving from the, I am facing a dilemma, if it is near enough to the EMA to make it a value trade?Making me at times, dilly-dally and drag my feet. And when the trade does start moving in, I pyramid, making my total trade an effectively lesser 'value-trade'.

I am sure, we all face problems. But the limelight is not on my trading methodology but on our trading discipline.

Dr. Brett Steenbarger, mentions in his book Enhancing Trader Performance, is that performers in all other fields are not devoid of emotions, but they leverage emotions or effects of emotions to focus them better. It is said, that Michael Jordan used to provoke, abuse his competitors before the game. So that they retaliate back and he gets charged up making him focus on the game better. Doc, says that it is the use of emotions to enter the 'zone' is what matters.

But my question is: How?

It has happened to me, that I was holding on a short position, anticipating an Hourly bearish divergence to take shape. What happened instead was there was a gap up the next morning itself and it rallied to a intraday high. Well, I was impaled! :)

But I still held on. But normally there is something which I never do. I started looking through the shoutbox. There was it! Emphatic bulls predicting a much higher close. Around 70 points higher.

Confidence wavered! Faith removed! And there was I, making a cover trade on the highest point of the day. What to say, its always easy to blame everybody other than self. If I would have held on my conviction then I would have closed that day with the minimal loss.

I am sure, we all had such lessons. I didnt have a plan B with me, the first fault of mine. I didnt have conviction on myself. The cardinal sin. ANd there you have it, the blasphemy of intelligent trading, I panicked. In that one moment, I let days and weeks of yog[as it is said in Sanskrit, an exercise in mental and emotional dexterity] was squared out.

I guess, I have a long road ahead of me. :) But it often make me curious, how did you do it?
How did you take your hard knocks? What did you tell yourself?

I am sure most of the people here, will find it difficult to mention the process. It just comes by perhaps... failing and discovering. Yet... just yet... given a chance to go back, what would you have done?
 

AceX

Active Member
#4
@Niks,
Probably, but I can't deny that he atleast tried to deliver substance, when everybody else kept selling snake oil.

Try googling, "learning to trade" or those umpteen number of queries which any beginner will search for and he will inevitably land on some site taking pot shots on market analysts and telling how he made an astronomical returns year after year just by following one secret. And this secret is available for another astronomical amount.

I often wonder, if that return which he received is by selling snake oil.

People like Dr. Elder, Dr. Steenbarger might seem superfluous to a guy who have been minting six figured income per week out of markets but trust me they ain't no snake oil salesman.
 
N

Niks

Guest
#6
See, I follow a simple logic. If I can find something really useful for my trading, recommend it to friends; if not; caution people about it.

I copied everything I presumed useful about psychology in a separate word document in a point-wise fashion (first there were 134 points/statements/"words of wisdom"). After 100 trades went back through it about which were directly related to my trading productivity.

Moved to strategy v.2.0 after deleting superfluous ones. Currently using v4.0.

Some of the most useful ones have been from Saints threads! then Mark Douglas, phantom of the pits... got some points from Steenbarger too but none from Elder.

PS: I think some other senior traders on this forum have also criticized Elder.
 

NOMINDTR

Well-Known Member
#7
I suspect the exploration came through the self-introspection arising from those pains.
It is not necessary to change. Survival is not
mandatory.
W. Edwards Deming

I am shackled by my own self-ignorance. Fear and Greed. Once the price starts moving from the, I am facing a dilemma,
Knowledge is little; to know the right context is
much; to know the right spot is everything.
Hugo von-Hofmannsthal

But my question is: How?
The man who insists upon seeing with perfect
clearness before he decides, never decides.
Henri-Frederic Amiel

Confidence wavered! Faith removed!
Yes. it happens. Because, learning to trade is learning to face uncertainities

I let days and weeks of yog[as it is said in Sanskrit, an exercise in mental and emotional dexterity] was squared out.
:)

But it often make me curious, how did you do it?
How did you take your hard knocks? What did you tell yourself?
These are the questions one must answer; not suppose ask

How are you going to do it?
How would you take your hard knocks?
What are going to tell yourself?

Trades are not battles with opponents for one who has a good trading system; It is a battle with himself.

Cheers :)
 

niftychance

Well-Known Member
#8
@NiftyChance

The question is : How much? :D
Ahha, Your Question is the Answer ...

Rule 1: Don't trade without a method / system ...
Rule 2: Know your method inside out ...
Rule 3: Size your position so that you will be able consistantly execute your trades ...

If you have a method and know it well and still have implementation issues, its the Size of your position ... Make it small... Small enough to have no hesitation in taking all the entry, exit & stop signals ...

Thanks
 

niftyrider

Well-Known Member
#9
Ahha, Your Question is the Answer ...

Rule 1: Don't trade without a method / system ...
Rule 2: Know your method inside out ...
Rule 3: Size your position so that you will be able consistantly execute your trades ...

If you have a method and know it well and still have implementation issues, its the Size of your position ... Make it small... Small enough to have no hesitation in taking all the entry, exit & stop signals ...

Thanks
agree 100%

(dont go in the field without helmet and guards)
 

AceX

Active Member
#10
@Niks,

Possibly, Dr.Elder was being criticized by some of the seniors. But then to each man to his own. Even criticisms and difference of opinion is there even after someone has made money. Lynch-es of this world can't see Niederhoffers and Wilders and Williams can't believe how Taleb invests.

As they say, to each man to his own.

But lets keep it at that, :)

Keeping versions of advices might be useful, but its as much mental dexterity as it is anything else.So how did you practice 'em?
 

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