TOTW Is it possible to feel no emotion when you win or lose a trade?

We're taught that the psychological aspect of trading is extremely important. That you need presence of mind and discipline to stick with previously established trading plans and know when to book profits and losses.

We're told that emotions simply can't get in the way. But is it really possible to feel no emotion when you win or lose a trade?

Last week's TOTW: What's your average trading day like?

Sharky said:

is it really possible to feel no emotion when you win or lose a trade?

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Yes its possible.

Takin emotion out of stuff isn’t really the right way round to my way of thinking. It’s almost the same as asking a if you can take emotion out of any business deal. Some you can, some you can’t. If you (Sharky) put together a business presentation and took a few months doing a grand job and made sure you had all the bases covered, and you get shown the door 5 minutes after delivering it, you’re human if you get deflated. You’re equally human to feel untrammelled delight at a chance meeting and quick conversation that leads you into a multi-year, serious income deal.

Some trades I care about, others I don’t. The amount of time and planning going into them is a factor. Simple, quick, easy punts are neither here nor there. But the more time and effort and complexity I weave into em, the more on me that’s in em, the more you feel it on both the winners and the losers. I don’t think it’s the number of trades you’ve done or the amount of time you’ve been tradin either. There’s also the element of how much you did right compared with what you did wrong. If I can’t see anything wrong with the way I expressed a trade that didn’t work out, I’ll let it fly over the top of me head without a second thought. If I can see I’ve made a mistake or two, it’ll annoy me and quite rightly fore being stupid. And that annoyance (emotion) is the fuel to make a note of me failings and fix them so I don’t do it again.

There’s a big thing about taking emotion out of trading and I believe the attempt is not only futile but can negatively impact you. What’s wrong with a bit o passion in what you’re doin? Presence of mind and discipline are essential. As is intelligence and focus and information and commonsense. But emotion is a by-product of the passion which drives you. If you don’t have that for what you’re doing then do something else for which you do.

With decent Money management, RR, for me a strategy that is repetitive i feel it can be limited, but not eliminated completely, plus i tend to be looking to other markets to trade as a backup to the one i do, so that would be stressful to start another even with back and forward walking it...

Regards Shane.........

Pat Riley said:

Takin emotion out of stuff isn’t really the right way round to my way of thinking. It’s almost the same as asking a if you can take emotion out of any business deal. Some you can, some you can’t. If you (Sharky) put together a business presentation and took a few months doing a grand job and made sure you had all the bases covered, and you get shown the door 5 minutes after delivering it, you’re human if you get deflated. You’re equally human to feel untrammelled delight at a chance meeting and quick conversation that leads you into a multi-year, serious income deal.

Some trades I care about, others I don’t. The amount of time and planning going into them is a factor. Simple, quick, easy punts are neither here nor there. But the more time and effort and complexity I weave into em, the more on me that’s in em, the more you feel it on both the winners and the losers. I don’t think it’s the number of trades you’ve done or the amount of time you’ve been tradin either. There’s also the element of how much you did right compared with what you did wrong. If I can’t see anything wrong with the way I expressed a trade that didn’t work out, I’ll let it fly over the top of me head without a second thought. If I can see I’ve made a mistake or two, it’ll annoy me and quite rightly fore being stupid. And that annoyance (emotion) is the fuel to make a note of me failings and fix them so I don’t do it again.

There’s a big thing about taking emotion out of trading and I believe the attempt is not only futile but can negatively impact you. What’s wrong with a bit o passion in what you’re doin? Presence of mind and discipline are essential. As is intelligence and focus and information and commonsense. But emotion is a by-product of the passion which drives you. If you don’t have that for what you’re doing then do something else for which you do.

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Fair dos Pat. The way i see it passion for what you do and the emotions most folks experience when trading are different things.
To my mind, in order to feel anything you have to think it first. True for anything in life. If you think the market is a stressful place to be then it will be.

In order to be relaxed in the situation you have to accept it for what it is, and shape your thoughts to match that reality. Most dont approach it this way, they take how they feel as a given, something that cant be changed, which imo and experience is untrue.

Sharky said:

We're taught the the psychological aspect of trading is extremely important. That you need presence of mind and discipline to stick with previously established trading plans and know when to book profits and losses.

We're told that emotions simply can't get in the way. But is it really possible to feel no emotion when you win or lose a trade?

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absolutely it is possible. To demonstrate how would you feel about putting on a £1000pp Dax trade right now, sweaty palms I guess lol.

now consider £20pp roughly equivalent to 1 futures contracts on the DAX, less emotional.

now consider £1pp which is micro stakes. Lets say you have £50k in cash savings, it will be very hard to have any emotion over a £1pp position. win/lose/scratch it doesnt really have any impact on your account.

So first point of reducing emotions is trading a size which is comfortable compared to your account size. If you have a £500k account you are not going to be emotional about dropping £1000 on one trade.

Once you are more confident in your edge and have built up a solid set of performance metrics this will help further to reduce emotions. For example your last 100 trades you have a win rate of 60% RR av. winner 1.5R. average loser 1R biggest winner 5R largest loser 1.5R. How emotional are you going to feel about losing trade #101, answer - not very.

there are a ton of other techniques you can use to further lower emotions. eg. focus on the process and the weekly monthly result not the individual trade.

in summary yes it is possible but you need to be sufficiently capitalised, confident in your edge and disciplined.

Most newbie traders trade with insufficient capital, with no edge, without recording performance metrics, with no discipline so it is unsurprising they feel very emotional during every trade.

Compare this to a successful pro who trades at a prop firm. He/She will likely have banked profits from previous years and keep this stashed in cash/long term investments as a large cushion with 100k+ only held at the prop firm (thus limiting risk further). They keep immaculate records/journals, they might take 5 trades a day on a 30 lot and feel much less emotion than a £5pp chancer from home.

glgt

Sharky said:

We're taught the the psychological aspect of trading is extremely important. That you need presence of mind and discipline to stick with previously established trading plans and know when to book profits and losses.

We're told that emotions simply can't get in the way. But is it really possible to feel no emotion when you win or lose a trade?

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Auto pilot trading.

It is possible to feel no emotion when you win or lose a trade, as long as you feel no emotion when you enter the trade.

For most people it is not entering that will be an isssue it is if the trade goes against them that emotions start to become apparent in my view.

not saying entering a trade is an issue. But if you are feeling emotion when entering a trade, i.e. excitement at the possibility of winning, or anxiety at the possibility of losing, then you obviously are increasing the emotional impact that occurs when you win or lose the trade.

If you don't have emotion when entering the trade, it means you have your emotions under control, and recognize that the trade could go for or against you, and are willing to accept that either way, win or lose.

having said all of that, at any point one could lose control over their emotions. So, I agree with you in that it could still be an issue when you win or lose the trade.

But I believe it is a huge step in the right direction if you can consistently enter trades without emotion...

again, if you start off with heavy emotion, it's going to be harder to reel it in by time you win or lose the trade. If you start off with no or little emotion, much easier to maintain that through the duration of the trade...

Probably responding too much on this topic, but lack of control over emotions has been one of the biggest factors in my trading failures. So, I have focused a lot on this topic (not saying I've mastered it yet).

I strongly believe that every aspect of trading - strategy, money management, how much you are risking, what time frame you are trading on, how often you are checking on trades, how long you are willing to let trades run, whether you hold over the weekend, etc. etc. etc. are all tied to emotions. Each factor will either help you control emotions, or be a contributing factor to your losing control over your emotions.

Once you put it all together, in that you trade in such a way that helps you control emotions, and you don't let any momentary lapse in control derail you, and you know how to regain control when you lose it, then you'll have emotional stability when you are trading, not that you feel absolutely no emotions, but they are controlled, and don't cause you to blow your account.

Reduce your size and Calm the Hell Down.

Every human being will has to deal with their own emotions through their life. Some wear them on their sleave- sharing them openly - while others remain totally in control and keep them hidden - no matter what situation they are dealing with ie a family Bereavement - or being left a large amount of money from an Aunt

Situations that occur more regularly can be normally handled with less emotion - is the mind gets used to the situation and deals with it with less feeling.

With regards to trading - that is one reason I prefer to trade short term - I am totally used to winning and the trades I lose on are nothing new to the mind - they basically happen every session and are quickly overcome with no big worry

A lesson that may help people here is to realise that you are not your emotions and for that matter you are not your thoughts or beliefs and most importantly not your ego either. They are all there and have to be there but if you can step back from identifying with these then trading becomes somewhat easier in my view.

Forexmospherian said:

Every human being will has to deal with their own emotions through their life. Some wear them on their sleave- sharing them openly - while others remain totally in control and keep them hidden - no matter what situation they are dealing with ie a family Bereavement - or being left a large amount of money from an Aunt

Situations that occur more regularly can be normally handled with less emotion - is the mind gets used to the situation and deals with it with less feeling.

With regards to trading - that is one reason I prefer to trade short term - I am totally used to winning and the trades I lose on are nothing new to the mind - they basically happen every session and are quickly overcome with no big worry

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F - Good for you. Glad it works for you that way. I wish I could do that, but trying to catch market moves up and down all day wears me out. Causes anxiety, and drains me emotionally, as I feel I am a slave to it. Plus it doesn't help that so far, I'm just not very good at day-trading

Only way I can trade is to be able to walk away whenever I want to. Forget about it whenever I need to, whether I'm in a trade or not, at any time. If I'm focusing primarily on H1, H4 and D1 time frames, it doesn't really matter what time of day it is, I can still enter a trade at a candle close, or just wait till the next period. Plus it gives me lots of time to do things that calm me down, as I admit that trading in itself does not calm me down

Again, this is not to criticize your style of trading. I actually wish I could trade the way you do, as I would love to be able to leave each day behind with my profits banked, and losses recovered and then some. I just can't seem to keep emotions controlled doing that.

I can't count how many times I've chased the market up and down all day, only to find if I would have just bought and held or went short for the day, I'd have banked 1 or 2 hundred pips or more.

I'm not for holding trades for weeks at time, and am not comfortable holding trades over the weekend. And if I can enter a trade, and close it out the same day with a good R:R then I'm all for that too. But I'm finding the daily and H4/H1 time frames cause me less anxiety, and less emotional turmoil.

Some will say for day trading, there are good and bad times to trade, times when the market moves, and times when it stagnates. But the way I see it, the market itself determines when it is going to move, and it does not care what time of day that is. So, I just look for the signals on the H1 H4 and D1 time frames which tell me when the market will move and which direction.

For me, this style of trading helps me to keep my emotions under control, and helps me not to get too excited if I lose, or win a trade...

I went to a paid seminar a while back with Steve Ward - Mentor to many supertraders and author of "high performance trading"....

he actually spent a lot of time talking about how stressful trading is and therefore you have to train mind and body to handle it ..........we also watched a lot of stuff re the SAS and special forces and SWAT teams training where they visualise and condition themselves to handle stressful situations.day in day out

practice , execution , practice , execution, repeat , review , repeat review.........the more such things are trained and visualised and simulated and indeed real time actioned.....the more they become part of what you can do all the time .............you will never ever get 100% used to it but you will do it a damn sight better than not doing it much at all

after the session he also confessed that many of his clients suffer from incredible fits of depression , uncertainty and fear even though they are "masters of the universe"...........and that's where he and other support teams step in to patch them up

so don't get too upset ....it happens to the best of them it seems

N

You have to forget what worked and what didn't work each day. The market changes all the time. A setup that made you $1k last month doesn't guarantee you'll make $1k this month or $12k in a year. I take trading one day at a time. Once 4PM comes, I drop my emotions on the day. I'm not going to be eager to trade ABC the next day because I made $100 on it today, and I'm not going to ignore XYZ because I lost $100 today on it.

Emotions are natural, just learn to start each morning neutral. Take it like football. You beat one team 30-10. Does that mean you continue to use that gameplan the following week against an entirely different team before taking the time to evaluate the new variables?

Good emotions are just as bad as the bad ones. For example, I lurk a chatroom with a ton of newbie traders. They've been making a pot full of gold on the recent IPOs. BABA is the largest IPO ever. They were so boosted on confidence and CNBC loves it and it's going to the moon. Half of them going all in on their accounts at open around $94-96 and could of made some profit, but they didn't sell. They let winners turn into losers and held it all day thinking it's gonna run to $100+ and make new highs. Some got out in $90s. They completely lost grasp of everything because of positive emotions. I bet half of them won't even be back on Monday.

As a relative newbie, no I can't rule out emotions. I agree familiarity and repetition help reduce it as does scaling all risk down, but until the pot grows scale remains. Maybe we should ask how long does it take to reign in your emotional response? X years, y trades, or is it better to shift your trading style? My time is limited for trading so I have to hold overnight and weekend but have grown more comfortable doing that with time and repetition, but its sometimes still a rollercoaster - but then isn't that part of the rush...?

there will always be emotion.you have to come to accept wins or losses as you improve as a trader.