| To trade without emotional involvement. It is a | | | | previous paragraph. The first curl in a spiraling out of |
| necessity, and yet it is virtually impossible. Certain | | | | control, that will likely break you in the end.Anger isn't |
| things in life just bring out emotion, like making | | | | he only emotion the markets bring out in us. The |
| decisions that effect your financial outlook. There are | | | | opposite of anger is euphoria, everything has gone |
| two things that make this uniquely harder for traders, | | | | your way. Some trades have gone beyond your |
| than for non-traders. One is, we are likely to be more | | | | wildest expectations. And ca-ching the money is |
| involved in our financial well-being than non-traders. | | | | rolling in. Up go your trades, and you are on a roll like |
| Some people would even say our priorities are out of | | | | no other. You have figured it all out, and the market |
| whack, and perhaps they are right. But nevertheless, | | | | is yours. She loves you, just you, and will do what |
| that is the way we are, and if we weren't that way | | | | you want. Again out go the principles that got you |
| we wouldn't be traders. The second factor that | | | | there, and out goes your winning streak. And viola |
| makes emotionless trading very difficult is, this is | | | | you have fallen into the anger trap. Or at least the |
| likely to be our passion. We aren't singers, | | | | recoup trap, you beg forgiveness, if the market will |
| humanitarians (hopefully we do share our wealth), | | | | just return you to where you were before euphoria |
| writers, politicians, spiritualists, we are traders, and | | | | made you greedy. You confess your sins and beg for |
| are likely to be passionate about it. Many of us to be | | | | mercy. But again the market has no mercy, the |
| honest, love it. Love it like Pittsburgh loves their | | | | market cares not for you.In my own experience it is |
| Steelers, irrational, all consuming, eats us up inside | | | | after this roller coaster, has cut my trading funds in |
| love it. And yet we know in our heart of hearts, or | | | | half, that I begin again to trade without emotion. So |
| more importantly in our logical, rational part of our | | | | how did I get to the point, where there never |
| persona that we can't be emotional about it. Not be | | | | happens again? Where the market does not elicit |
| emotional about that which we love?? It is one of | | | | anger or euphoria. Well I don't think you ever do. It is |
| the hardest things in the world. That is why Doctor's | | | | very hard not to have emotions when you get |
| don't treat family members.One of the easiest traps | | | | pummeled or a positions breaks to the upside wildly. |
| to fall in, is to be angry at the markets. Like a new | | | | So what do you do?You admit it, you acknowledge |
| love, nothing can get your hackles up so much as | | | | it, you are aware of it. You say ,yes that just ticks |
| that which you love. And when the markets fail you, | | | | me off, why would that trade do that. And you go |
| that love has disappointed you. And when love | | | | form there. You decide what to do, if anything after |
| disappoints rage can easily follow, just ask your | | | | you acknowledge your emotions. You stick to your |
| teenager. It really fires that special spot in your belly. | | | | trading rules. You can then go back and learn from |
| The problem with becoming angry at the markets, is | | | | the event. Which is the real value of mistakes. You |
| you want to get back at it. But to traders the | | | | can analyze what went wrong, compare it to what |
| market is the epitome of unrequited love. The | | | | has gone right in the past. Perhaps change your rules, |
| market has no emotion, you are fighting a losing | | | | perhaps accept that things are going to go wrong in |
| battle, if you think you are going to get back at it. | | | | the game of trading. And that is the price you pay |
| Because it doesn't care. The bad thing about this is | | | | for the right trades. But you NEVER make a trade |
| that you are likely to trade horribly because of this | | | | based on emotion.You can still love the market, the |
| emotion, if it goes unchecked. You will override your | | | | game of trading. I do, and then I hate it too. I think |
| systems, you will trade without thought, you will in | | | | about my sailboat beckoning, and want to bag the |
| fact mirror the very thing you are trying to defeat. | | | | whole thing. And that day will come. But the |
| Emotion not thought out, which is what huge market | | | | difference is I love the markets from a distance, |
| swings are.The second pitfall of anger is similar to the | | | | from a reflection, I love it as an accomplishment of |
| first, but perhaps not as devastating. You are not | | | | man. It has been a huge part of my adult life, and |
| angry so much as you want to recoup your losses. | | | | has shown me every aspect of human emotion, and |
| Like a horse bettor who got skunked at the track,, | | | | has taught me one very, very nice lesson, |
| and borrows money from Uncle Rich, you increase | | | | patience.CT Larsen has been trading stocks since |
| your bets, throw out money management principles | | | | 1990. Now trading large cap stocks exclusively. He |
| and press to recoup. Financially this can be more | | | | has recorded three straight years of greater than |
| devastating than anger all on its own. Often though it | | | | 50% annual returns. |
| is the first step to the anger mentioned in the | | | | |