I'm a masochist & it's hurting my trading :(

In light of recent events I have concluded that I have some sick masochistic thing going on with trading and just when things start to get good, I go and do something pretty stupid to jeopardise it and go and lose close to the max on it.

I do consider myself to be somewhat informed and have a general awareness of good vs bad trades. However the problem is i'm plagued by some boredom/frustration/masochistic issues whereby I start to do stupid things and this is where my biggest losses have resulted from. I do engage in other speculative activities but never put myself in the same positions.

My most recent example being after taking a sizeable hit when euro plummeted a few weeks ago I was re-building my account after dropping close to 30% of my account in one trade. Which of course was a consequence of me averaging + no stop and just running it. (The only reason I closed was to prevent busting my account and i'll add that I generally trade with low leverage but after averaging multiple times the leverage starts to become an issue.) I digress though, so I was rebuilding my account and doing well until yesterday, after a week of feeling frustrated with the market and not much going on I decided to take a small trade, sadly I did not take the hit and resorted to averaging. There was times the loss was very insignificant but I decided to try get a profit. I speculated on trichet and got burnt even though I knew it was not good and I should have been out. So once again i'm back to where I was a few weeks ago and seeing this cycle.

Which brings me to the question: what effective techniques can I implement to control the masochistic masquerade? Are there any other people that seem to suffer from the plight of self-destruction and is there any way around this other than quitting (which i'd rather not do for a few reasons, but main one being when i'm good I can see a succesful trading future.)

Maybe i'm just rambling, but it helps me to feel a little better to vent at this time as i'm just fed up of history repeating itself and have a general feeling of disappointment with myself. :|

prolly one of the most honset things i read on here so far

Why are you impulse trading? What's driving it?

I'd put it down to impatience. You may have been trying to force action out of the market when there was none to be had. Nothing to do but to learn to control your impulses. It's by no means easy and a lot of people struggle with these. I certainly do. Sorry to hear your loss. Perhaps taking a little timeout to clear the head would help.

Yeh a great post and I suspect it chimes with a lot of traders either now or in the past.

The lessons you know: You gotta learn to take a loss and don't avearge in - ie use stops
and if you ghet stopped - move on. Secondly get your kicks (to cure your frustration/boredom) elsewhere other than the market, but if you are suffering from these you may be better on lower t/f's (more action in a shorter time) or add some more instruments to look at.

Whatever you do at least you have identified the issues. Remember Einstien's definition of insanity: Keeping on doing the same thing (s) over and over and expecting a different result.

G/L

What masq describes sounds like how I ended up developing intraday to replace boredom trades with something more useful.

I just got fed up with losing and decided to change. I can't say anything else apart from that really.

The simple answer would be... stop doing what you're doing. No stop loss... sorry; you had it coming. If you can't wrap your mind around some sound money management skills and run your trading operations as a business then you won't last long. If you want to gamble, there are the ponies, dogs, sports, and **** fights... at least you'll be getting out of the house once in a while, and having some fun with your money.

Every person who trades the markets has demons that they must deal with; either you master the demons or find a way to compensate. Money management skills are key, but you must exercise the discipline required to adhere to these rules. Don't get down on yourself, just consider it a learning experience, and then make the pledge to stop doing what you are doing.

A trading journal may be of some help to you. Make it a daily one, not for just when you are putting on a trade. A journal may help you to recognize the patterns that lead to these mental slip-ups.

Hope you can work it out... best of good fortune either way.

had the same problem myself earlier in the week and it's been about 10 months since i've been 'clean' and profitable, on this occasion i managed to come out of it ok and make back what i lost but it's so frustrating knowing that i'm still not safe and like you, i know better. i was thinking of getting a wad of cash at the desk ready to tear to shreds if/when i feel the need to have another relapse if that won't stop me nothing will!

Wot maz needs is a manager...

"Masquerade you f*ckin idiot, my office now!"

People don't f*ck around as much in work...

kimo'sabby said:

Wot maz needs is a manager...

"Masquerade you f*ckin idiot, my office now!"

People don't f*ck around as much in work...

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so true, home traders can do whatever they like and no one will stop them, if you work for a firm and pull that crap they stop you trading and you get a chance to clear your head... or search for another job.

Masq, there's good advice above already.
I've done the same thing before, more than once, even though it goes against my
plans and principles.
I think its a part of the fight with the optimistic part of human nature.
I find I get more in danger of it after 'winning streaks'..
Its that first thing we hear about in trading, cutting losses,
but after a string of winners cutting losses gets out of practice sometimes.

I try to kind of look over my own shoulder , to keep myself grounded
if you know what I mean.

Its easier said than done.

mas

Open a "play" account and give vent to your boredom/frustration/impulses in that. Won't matter much if you blow it apart now and then. Keep your main account reserved for the real deal stuff.

jon

What would the wise old fox say?

Had a 'similar' experience a year or so back, had doubled an account over 6 months, trading off 2-4hr TFs, had a few consecutive losers,then got all clever like; tried picking better entries by drilling right down to 700/900 tick charts..disaster, 15% down, kept getting bogged down in ranges but couldn't see the wood for the trees..Weird thing was I couldn't for the life of me remember what I was doing so right previously to build the account up so quickly.Took me a while to get my nut back in the game and get my mojo back..

Biggest failing was not simply closing all my trades out when there was enough on the table, honestly I'd have situations where I was 200-300 pips up on 4 pairs concurrently but didn't close out because I had imaginary limits of 150+ on each pair and there was no reason to get out of all the trades..what a tw@t..

Not sure what the answer is to your situation it's all so personal isn't it? Except just going right back to basics, clearing your trading mentality of clutter and perhaps only playing off the higher TF on one pair. Sticking to your rules no matter what, saying fook it when it goes wrong because you know the next trade will probably be a winner given the general equal random distribution of winners/losers etc..If it isn't then don't tamper with the system/your edge, it's the market that's fookin about, not you, so just go again..

Here's a thing that also struck me recently, part of us imagines eventually finding easy street with our trading, being totally laid back because we just know and all those years of experience finally made us the wise old fox we wanted to evolve into..And yet we over trade, we induce chaos, we go looking to make the job harder than it has to be, and yet the old fox we all want to be wouldn't do that would he? So wtf do we do it now!!

If we're going to eventually be that laid back wise old fox character then let's start now by making the job easier; just trade off the 4hr or daily, 2 winners out of 3 trades could build a good living, why do we make it so much harder than it needs be?

I decided yesterday that once June is over (for my own personal trading) I'm only going to trade EUR/USD from here on in, take trades off the 1, 2, and 4 hr TF with the same set up..'cos the wise old fox inside me has finally won the battle..

Re: What would the wise old fox say?

Black Swan said:

Had a 'similar' experience a year or so back, had doubled an account over 6 months, trading off 2-4hr TFs, had a few consecutive losers,then got all clever like; tried picking better entries by drilling right down to 700/900 tick charts..disaster, 15% down, kept getting bogged down in ranges but couldn't see the wood for the trees..Weird thing was I couldn't for the life of me remember what I was doing so right previously to build the account up so quickly.Took me a while to get my nut back in the game and get my mojo back..

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This has got to be the most honest mojo story I heard for some time.

Re: What would the wise old fox say?

Black Swan said:

Sticking to your rules no matter what, saying fook it when it goes wrong because you know the next trade will probably be a winner given the general equal random distribution of winners/losers etc..

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Absolutely. If you have proven that you can trade, then take a small loss knowing that you can easily make it back.

jpennybags said:

If you want to gamble, there are the ponies, dogs, sports, and **** fights... at least you'll be getting out of the house once in a while, and having some fun with your money.

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Well, he might as well gamble on the markets if he's going to "gamble" on sports bets. That said, if he trades football/tennis/horses markets, he could still make money... there are opps all the time so even when the financial markets are not playing ball, traders can look at the sports markets (and I don't mean taking wild punts but trading based on fundamental or technical analysis).

Yep, agree with black swan, first month after a serious revamp of my trading, down 6% via 3 losses (off daily/H4), bricking it....after already having 6 months of failed trading, since then i've wiped that loss out to be up 26% since december risking 1.5-2% per trade, the market's been good obviously but i've 'backtested' the method even though it's discretionary and it has cold steaks but MM etc keeps 'er lit. Down 4% in june already, market's ending it's incredible trends maybe, but i'm confident

I just got back from the gym, I had to get away from the screens and clear my head. It's good to know that i'm not the only one plagued by this issue and there's definitely some good advice to consider.

As BeginnerJoe suggested, a lot of this boils down to impatience. I have tried trading multiple pairs of currencies and not had a lot of success with it as i've had times when 2 good trades come up at the same time and then i'm left in limbo with the "do I take this trade?/do I take that trade? Should I take both and use half size?" and after not much success trading other pairs I always found myself saying I should stick to one pair: eur/usd. Which leads back to the impatience.

I suffer from boredom, to alleviate the boredom I use MSN, go visit forums, play games on miniclip and sometimes pop into a chat room. Despite all of the above I have found it becoming stale and I can't just ignore the fact that I am in fact bored and there's nothing to do. But I have nothing else to do instead as I don't want to move away from the computer in case something worth trading happens. This week I was pretty bored and after 2 days of trading with moderate success and feeling fed up with the market I decided to buy eur/usd but only half size because I knew it was risky. Needless to say, I wasn't in the mood for taking a loss this week considering how relatively poor my week's been going so I bought more & more again. Thus ultimately leading to my downfall as I ended up in a highly leveraged position speculating on an event where I had a 0EV - hence I was as good as flipping a coin on it.

Another problem with the trading is when I sit there and there's nothing to do. I'm fully aware that other people elsewhere are making money and i'm sitting on my **** doing nothing and earning nothing. Now if I was trading a bigger size and making their weekly wage on an average trade I don't think i'd mind so much. But sadly, pursuing a lower leverage strategy with an account of my size doesn't afford me that opportunity so I just have to grind it up and compound and watch it grow (as I have seen in the past with some decent returns up until the big meltdown.)

I have done the smaller account for me to gamble on and it worked well till it didn't. (I was up over 100% before I leveraged up on some cable trade and ended up losing about 50% of the account in one trade) I feel having a smaller account to speculate on would just get me in the mood to speculate more on the main account. I don't need a gambling fix per se, if there's nothing to do then market avoidance is the best strategy.

I am fully aware there are gaping holes in my trading and I have known about this for a while. As I said, this hasn't been the first time i've taken a sizeable loss on my account and the scary part is for some reason I haven't learnt from past events and history tends to repeat itself.

I'll look over the thread to see if there's anything that i've skipped. I will just make it clear that I am not bothered about losing that quantity of money in a day (it's not pleasant) but the part which perturbs me is (a) I'm disappointed that once again history repeats itself and (b) the reason for trading was invalid and losing money was not necessary. If the position was good and I lost then it's just one of those things.

I'll get on to some of my thoughts on changes later on just to stop this becoming a dissertation.

Thanks for the advice/stories so far.

shadowninja said:

Well, he might as well gamble on the markets if he's going to "gamble" on sports bets. That said, if he trades football/tennis/horses markets, he could still make money... there are opps all the time so even when the financial markets are not playing ball, traders can look at the sports markets (and I don't mean taking wild punts but trading based on fundamental or technical analysis).

Click to expand...

If you are bored and you start taking trades that aren't there just to have something to do... not good. Some folks want a little action (gambling), best not to do it in your trading account. An afternoon at the track, a beer and a sandwich won't set you back much even on a looser of a trip.

I remember you calling your entires on the propboard chat room about nine months ago.

I recall EUR/USD being in a good up trend, and you were shorting it.. it went up a bit more and you shorted some more.

I just sat there and thought "WTF, doesnt he know that strategy works for days/weeks and maybe months, but every so often you take a massive hit as the market just keeps on going?"

Anyway in general it is better to trade with the trend.

When counter trend trading, which can also be profitable, you need to use stops.. if you average down say 3 times, make sure there is stop somewhere after that third add in.

However when you use stops your win % percentage will drop massively, and you might not be able to handle a long streak of losses either.