Psychological and Emotional burnout.

[Splitlink]

splitlink in my post which you quote you attributed the sentence "Having to tell your wife that she is penniless is something that is likely to make anyone desperate and probably is the reason why I will never be rich at this." to my post by implication. I made no such statement.

Did I? I'm sorry. That statement is atributable to me, only.

 

[Splitlink]

splitlink in my post which you quote you attributed the sentence "Having to tell your wife that she is penniless is something that is likely to make anyone desperate and probably is the reason why I will never be rich at this." to my post by implication. I made no such statement.

Yes. mate, you are right. That statement went into your quote and I don't know how it happened. The best is for me to delete that post. Sorry about that.

 

[Purple Brain]

Yes. mate, you are right. That statement went into your quote and I don't know how it happened. The best is for me to delete that post. Sorry about that.

Not a problem splitlink, but I'm sure you can edit it rather than delete the entire post.

It was only a shock to me to wonder if I had unconsciously typed it. My current partner would have been surprised on two counts and my conscious self on all three.

 

[Liquid validity]

I'm not sure why the mystique around him exists as he clearly was a born loser. Perhaps it is more nostalgia for that golden age of market volatility and the cowboy chancers that JL rubbed shoulders with - he became famous more for his lifestyle than for his market longevity or long-term savvy.

To be fair most accounts of him from the time do regard him as a very good trader.
Its his risk management and adaptability that raise question marks.

Splits earlier post stating JL left millions to his wife has gone AWOL?
Anyway, for the record, his estate in 1940 was less than $10K.
That is generally cited as a primary factor in his demise, could no longer make as much
money as he had been used to - which coincides with the decline in volatility in the
late 30's, no doubt partly due to the GSA:
http://www.investopedia.com/articles/03/071603.asp

Investment bank activity was curbed by the GSA, reducing volatility.
That is backed up as a likely cause by JL suffering depression the same year
GSA came into force - 1933, he probably knew then the writing was on the wall
for his way of trading.

 

[Purple Brain]

To be fair most accounts of him from the time do regard him as a very good trader.
Its his risk management and adaptability that raise question marks.

But surely risk management and adaptability are part of being a good trader? You only need to be less than good on any one of a number of attributes to be a failure overall - which he was.

I'm not dismissing the chap of course, he made more than I likely ever will. But he also lost more than I likely ever will.

 

[Liquid validity]

But surely risk management and adaptability are part of being a good trader? You only need to be less than good on any one of a number of attributes to be a failure overall - which he was.

I'm not dismissing the chap of course, he made more than I likely ever will. But he also lost more than I likely ever will.

Not necessarily.
You can make consistent, yet inefficient trade decisions that can still
make money due to trade and risk management.
Results will be less efficient.

On the other hand you can make excellent trade decisions as JL
did several times, yet without adaptability and sound risk management,
the outcome can be more worse in the long run than by following
the earlier example.

You are right that overall, risk management is and should be part of the overall
skill set of a trader.
Yet Investment banks still have divisions dedicated solely to risk management,
although its fair to say you could be excused for thinking they weren't
present during the run up to 2008 and several other times...
Then gain they knew they wouldn't foot the bill for the inevitable CDO fiasco,
the CDS insurance policy effectively underwritten by the FED, and they knew it...

Point is assessing trade opportunities and risk management are separate
distinct skill sets.
Ideally you need to be excellent at both.
For longevity I'd say risk management is more important, just my opinion,
others will disagree.

 

[Splitlink]

Not a problem splitlink, but I'm sure you can edit it rather than delete the entire post.

It was only a shock to me to wonder if I had unconsciously typed it. My current partner would have been surprised on two counts and my conscious self on all three.

I could have edited the quote, it's true but, what's done is done. Take it as read!

 

[numbertea]

The Reminiscences book about JL is thr most inspiring trading book I own and after reading it I was convinced that Day Trading was my destiny. I have really been making breakthroughs in my trading but side effects of the constant excitement have been creeping in. I have not had a good nights sleep for the past 2 weeks and I no longer feel like I have to eat. I have to consciously force myself to do so. I keep myself on a schedule to make sure that I take care of myself but I am going through things that I never thought would happen. JL was seemingly so caviler and aloof. I guess it is really going to take a long time to get over this hump I have discovered. I hope I make it, I would love to trade until I can retire. Does the sleeplessness pass soon, I feel great during trading? What happened to me?

Cheers

 

[Liquid validity]

The Reminiscences book about JL is thr most inspiring trading book I own and after reading it I was convinced that Day Trading was my destiny. I have really been making breakthroughs in my trading but side effects of the constant excitement have been creeping in. I have not had a good nights sleep for the past 2 weeks and I no longer feel like I have to eat. I have to consciously force myself to do so. I keep myself on a schedule to make sure that I take care of myself but I am going through things that I never thought would happen. JL was seemingly so caviler and aloof. I guess it is really going to take a long time to get over this hump I have discovered. I hope I make it, I would love to trade until I can retire. Does the sleeplessness pass soon, I feel great during trading? What happened to me?

Cheers

An entirely personal question, really depends on you.
It should lessen as you get used to risk exposure.
If it doesn't, or its becoming a serious problem right now,
reduce size to 1 or 0.5% per trade, or whatever lowers the effect.

Personally I mentally write off each trade as a complete loss as soon as it is placed.
The market decides whether I get anything back.

Some way of putting it into perspective helps as well until you get more used to it.
Think of bad things you've been through and survived.
Is risking 2% or less at any time really as bad as that(providing you have a sound method)?
That can minimise, but never eradicates the issue - still largely dependent on you though.

 

[numbertea]

I'm usually a laid back, calm, person. I have been fully enjoying the day trading and on the surface I don't fear losing money, I consider any loss the cost of learning to trade better or improve my system.

Obviously something is getting to me. It may be that I'm more worried about switching over to trading full time as now I still have a regular job that pays the bills. You are right, it is something I just have to work through and see. Thanks.

Cheers

 

[Splitlink]

An entirely personal question, really depends on you.
It should lessen as you get used to risk exposure.
If it doesn't, or its becoming a serious problem right now,
reduce size to 1 or 0.5% per trade, or whatever lowers the effect.

Personally I mentally write off each trade as a complete loss as soon as it is placed.
The market decides whether I get anything back.

Some way of putting it into perspective helps as well until you get more used to it.
Think of bad things you've been through and survived.
Is risking 2% or less at any time really as bad as that(providing you have a sound method)?
That can minimise, but never eradicates the issue - still largely dependent on you though.

I'm beginning to wish I'd never mentioned the bloke!

 

[Liquid validity]

I'm beginning to wish I'd never mentioned the bloke!

I'm not having a pop just a light hearted discussion thats all

 

[Liquid validity]

I'm usually a laid back, calm, person. I have been fully enjoying the day trading and on the surface I don't fear losing money, I consider any loss the cost of learning to trade better or improve my system.

Obviously something is getting to me. It may be that I'm more worried about switching over to trading full time as now I still have a regular job that pays the bills. You are right, it is something I just have to work through and see. Thanks.

Cheers

The stress may be your brains way of telling saying you are not ready for that
step yet, either psychologically or practically.

On a practical level, I would think twice unless you've been consistently
profitable for a good few years, and have at least a years living expenses covered
as well as trading funds.
Psychological effects are bad enough to deal with anyway, when they have a
sound and rational basis as mentioned above, do not ignore them...

 

[Splitlink]

I'm not having a pop just a light hearted discussion thats all

People seem to be taking your light-hearted talk very seriously, Doc!

 

[Liquid validity]

People seem to be taking your light-hearted talk very seriously, Doc!

Just passes the time of day with me, something to talk about thats all

 

[numbertea]

Making the switch from part to full time trader is nerve wracking for sure. I am confident in my trading system but probably not enough in the thought of trading supporting my current lifestyle in the short term. In the long term I know it is my answer but getting to a comfortable place is hard at first. Right now I'm working out methods of day trading with a full time job that work for me. My wife is working the computer at home while im at work and sends me screen shots when my automated system gives signals. I haven't been able to be fully automated yet. We will see if this works out.

Cheers

 

[pboyles]

I smell a rat. What does the Bank of England trade on 5 minute charts?

 

[Mr Fox]

I smell a rat. What does the Bank of England trade on 5 minute charts?

Pboyles, as much as I respect some of your work, how very dare you come here, and say you smell a rat. I find your post, especially coming from someone like yourself offensive.

John.

 

[JonathanLeon]

Hope you are better now John

I really don't know how to start this post, and seem to write it, then delete it, but the honest, and frank responses I get from people on this forum I've decided to just write it.

The bottom line is, that I need your help guys.

I just feel so drained, scared, and emotionally broken at the moment, yet there hasn't been any specific trading factor that has brought me to this point. There hasn't been a significant loss or any traumatic instances in my private life either.

After being taught how to trade properly by a trader who has worked for the bank of England also, and I've took time out from live trading, and back tested his strategy to the back of beyond on a 5 min chart, and even live paper trading has produced the same results, Infact I'm now at the point where trading makes perfect sense, and I can see trades just pop out of the charts, but I just cant take live trades.

As unbelievable as this may sound, just to give an eg. of last weeks trades on FTSE alone at 1% risk was:

Mon 4%,
Tues 7%
Wed 5%
Thurs5%
Fri 5%

And this does not include the opening spikes at 8am, or Non farm trading, and very conservatively instead of counting the paper traded 1:3 ratio's etc I have counted them as 1:1.
Yet I didnt make a dime, as I was crippled with fear every time I go to trade.

I even thought about paying someone to get this strategy automated, and was told very honestly by members of this forum that it is a very hard process to get right(putting it mildly).

This is my full time job working from home, yet I procrastinate so I don't have to get out of bed to face the charts, yet when I do get up I feel sick to my stomach when I turn the computer on. Then although I have the charts running in the background I just browse the internet instead till about 4pm, then at 4.30pm back test how many % was on the table that day, feel very angry at myself, and tell myself that tomorrow will be different and I will trade, yet the same process repeats itself.

I've taken time away from the charts by going on long holidays with the gf. Taken months off at a time away from charts.

I even asked a friend to pop over and trade with me to just type in the trades I shout on my account for a %age return of the profits, but the said friend was more interested in wanting to know my strategy, and for me to teach him, that the whole days would be taken up by me explaining everything to him, and trading would take a back seat. This was good for me, as I didn't have to trade, and good for him as he learnt what to do. Unfortunately when I had taught him all I know he just seemed too busy to pop over. I then asked another friend, and the same process took place, and now both my friends are working together, and doing very well, yet before they didn't know anything they were willing to promise anything, and doing everything to help me, and now they don't want to know, as they're busy working together, and don't have time to even call to see how I'm doing, yet they send a txt to let me know how well they're doing, and yes every time I receive the txts it makes me feel used, angry and bitter.

I have been brought up not to lie, yet when friends or family ask how things are going I just say things like "Yes I saw plenty today", or "there was plenty of opportunities today" which they assume means I've had a good day, and I wont put them right, but just smile. Yes its technically not lying, yet I feel like I am lying to myself everyday, and this just destroys me.

If there's any words of advise, pearls of wisdom that anyone can give me, or by those who have been through this and come out the other end can give me I would greatly appreciate it.

Thank you

Best
John.

Great work on your trading strategy, sounds impressive. As for the psychology situation. It might be beneficial for you to look into behavioral finance and how the brain works. In short, I find the brain works in a Cognitive and a Intuitive way. If I ask you what 2+2 is the answer is mediate (intuitive) but if I ask you what 17 x 27 you may need to think for a second (cognitive). In trading it is very important (for me) to act in the intuitive state instead of the cognitive state which promotes emotions etc. Meditation is a huge part of this and can help immensely. Do some research and it might help ya in this area.

Hope you are well.

 

[Mr Fox]

Great work on your trading strategy, sounds impressive. As for the psychology situation. It might be beneficial for you to look into behavioral finance and how the brain works. In short, I find the brain works in a Cognitive and a Intuitive way. If I ask you what 2+2 is the answer is mediate (intuitive) but if I ask you what 17 x 27 you may need to think for a second (cognitive). In trading it is very important (for me) to act in the intuitive state instead of the cognitive state which promotes emotions etc. Meditation is a huge part of this and can help immensely. Do some research and it might help ya in this area.

Hope you are well.

Hi Jonathan,

Thank you for your reply, and kind words of advice. I do agree with you that when one has more time to think, and analyse a trade, they also have time to talk themselves out of it too.

I must admit that I am eternally grateful to a member on T2W who contacted me, and over the course of e mails, and phone calls, helped me in so many ways, not only to come to terms with the issues I was having, with baby step solutions, but also issues that weren't at the conscious, but affecting the subconscious.

I have also been to see a hypnotherapist, and that is an on going thing for the foreseeable future. I also got back in touch with my old mentor too for catch-up sessions as well.

Things aren't back 100% to what they used to be, but sometimes for longevity small steps need to be taken, and things are very much improved.

Best
John.