Emotions of winning and losing

donaldduke said:
The only methods that are profitable week in, week out are scalping methods. Taking dozens if not hundreds of trades a day.

Not everyone wants to be or can be a scalper.
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Just interested, would you class taking on average 15-20 trades per day, in two 4 hour sessions, across 7/8 pairs, off 15 min TFs, as scalping?
 
I don't know if I should be crashing into this thread (quite embarrassed because most people in this thread are like legendary members:) ) anyways, my embarrassment aside, I just want to know what you or everyone felt when you had your first loss in an actual trade? What helped you to walk away from it?
 
freezeSL said:
I don't know if I should be crashing into this thread (quite embarrassed because most people in this thread are like legendary members:) ) anyways, my embarrassment aside, I just want to know what you or everyone felt when you had your first loss in an actual trade? What helped you to walk away from it?
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I was a newb, trading a small account at a time when gold seemed like a one way bet (sound familiar?).

I put something like a £90 stake out of my £100, and was thrilled to see the PL increasing so rapidly. Then it turned round and even more rapidly hit my stop in a heartbeat. "Where'd it go???!!!". I was too stunned to think or do anything for a long time.

I don't know about walk away from it, but bloody-mindedness kept me going (and of course didn't stop me from similar stupidities later; that took much larger stakes).
 
My best advice try to trade money that you don t need
That will give you the more chances to win!
 
I know that I cant hold on to my winners. If trading $10/pip, I get greedy after 20. I take profit only to watch the market another 40p my way within the hour.
Losses are easier. Bang, its gone.

I know that I want the certainty of having the cash in my hand so I cut my winners. But that is what trading is - living with uncertainty. Its very hard to explain. I think traders have to be a curious blend of caring and yet not caring. Let it go but also raise stop to BE or lock 10% in. If it dosent keep going and you lose some at least you did not make a loss.

I think thats why trading is hard. To have both frames of mind takes time and practice.
 
combotrader said:
I know that I cant hold on to my winners. If trading $10/pip, I get greedy after 20. I take profit only to watch the market another 40p my way within the hour.
Losses are easier. Bang, its gone.

I know that I want the certainty of having the cash in my hand so I cut my winners. But that is what trading is - living with uncertainty. Its very hard to explain. I think traders have to be a curious blend of caring and yet not caring. Let it go but also raise stop to BE or lock 10% in. If it doesn't keep going and you lose some at least you did not make a loss.

I think thats why trading is hard. To have both frames of mind takes time and practice.
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Well you could have two or more smaller positions running and just close one, or close some fraction of the £10/pip position, or some variation on that theme, so you at least know you have been paid for the trade. If it carries on, you get a bonus.

I've been listening to interviews with old traders, and more than one has talked about making sure they take home something each day, get paid in other words, but also "leave something on the table" for the other guy. It's a nice way of thinking about it I think.
 
Thanks Mont - yes I do close 50% after say 20pips. I trade cable and these last few days have been soooo choppy. A 30p profit becomes a loss before you know it. But even then leaving 50% running and taking a loss on that is hard for me. But the ones you leave running ALWAYS make money !!

I wonder if Brett Steerbarger has anything on this....
 
Wow, thank you for sharing what you all went through. I just read about the guy whose account was wiped out and his wife threatens to leave him. I hope he recovers.
 
One of the most fundamental rules to good trading and good investing is to keep emotions out of it. But I think we'd all agree that its one of the hardest things to do.
 
wilson2win said:
One of the most fundamental rules to good trading and good investing is to keep emotions out of it. But I think we'd all agree that its one of the hardest things to do.
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Think about the people who survive air crashes.
Before the plane takes off they have assessed where their seat is in relation to the exits, and planned how they will get there in the dark and smoke while everyone else panics in the aisles.
And when the time comes they execute their plan with a clear unemotional head, all decisions having been made before the event, not during it.
The point about this is that mose people don't operate in this way. Guess who survives. Trading is the same.
And if you don't analyse why you won or lost, then you don't know whether your approach is working or it's you that's letting it down. Keep a detailed log and find out. No excuses, just do it.
Glenn
 
I used to see the 'red mist' if the platform wouldnt enter my order and the trade went the right way. I then used to 'anger trade' and start placing trades with bad entries, try to catch my tail, still get in the trade even though the trade had gone. 9/10 it would result in a loss and then i would be angry for hours afterwards and trade badly.

Over the years i have taught myself that out of the 1000 or so trades i may place a year that 1 trade isn't going to make a difference. So i am much calmer now. Also makes it easier with a currenex account now too :)
 
For me personally, one single trade is just a guage on the market, it has no real bearing on anything else.
 
wilson2win said:
I don't know if you've heard of the UK trader Mark Shipman - he had a big selling trend-following book out a couple of years ago? Anyway, he's giving away an interesting report about emotions within trading here: http://www.theautonomousmillionaire.com

You have to sign up for it but it is free.
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Gawd help us, would you stop it with this silly spamming exercise? Every post I've subscribed to you appear with this tiresome effort to drum up hits for your chum...:(
 
The reason traders experience emotional pain when the market moves against them, is that they have an expectancy that the market will follow their analysis.

In order to be successful (IMHO) you need to loose that expectancy on a trade by trade basis and realize that all your analysis provides is a probabilistic edge. So over a series of trades that probabilistic edge will come in to play and statistically you will experience more winners than losers. However there will be losers and you need to accept that.

The distance from your entry to your protective stop is the risk that you need to accept and be comfortable with, in order to ascertain whether this particular trade is going to be one of those losers, that statistically your method of analysis WILL generate.

Once your pattern (and indeed reason for taking the trade) is broken, liquidate the position, without emotion and move on to your next set-up.

Conversely, the same thing applies to experiencing emotional euphoria on winning trades.
 
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All I can add is don't get so high of each win, then the losses won't seem so painful. Always try and maintain the most consistent state possible.
 
Whenever a person feels and get losses or LOSE in a business, I know it could really hurt a lot, that it seems that you almost give up of what you've started. But, as a brave person, you should be able to struggle, in order to win next time. In every ups, there are downs. Once you lose, all you have to do is strengthen your believe in yourself, and try to work on what you have failed. Practice makes perfect. In every suffering, there's a cure. So, if ever you got lost, let's say, you were down on your business and got losses, you should have strategies, in order to put yourself up, to earn profits now. You should set goals and practice doing it. And, always believe on what you do!
 
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