The previous interactive post proved to be most popular, so last week I put a new question out to the social media channels for the followers to give their thoughts on.
The question brought some interesting answers, and more interesting conundrum. Is there really such thing as feeling no emotion when your trading goes wrong?
The question was all about the concept of emotion in trading. Do you feel it? What type of emotion is it? How do you deal with it? The answers did make me wonder about the value of ignoring emotion in trading. Take a look.
Below is was the question for last week along with the answers I got from Twitter. Be sure to look out for the next interactive post question each Monday and join in. I never fail to learn something from all the answers I receive.
Last weeks interactive post (http://t.co/nkKibtSJ) went well. This weeks question: "What do you FEEL when you are in a trade going wrong?"— Adam Jowett (@IamAdamJowett) April 2, 2012
@Akuma99 nothing, emotions are kept out of it, i look for the next setup and DO NOT double up risk = same every position.— Adam (@Pipstealer_) April 2, 2012
@Akuma99 or to put it simply, i do what most do not— Adam (@Pipstealer_) April 2, 2012
@Akuma99 if you are feeling when trading your doing it wrong— Adam (@Pipstealer_) April 2, 2012
Adam gave a great answer, and one that is preached in numerous trading books. I couldn’t help question the answer though, as right as he might be.
I replied to Adam at the time that it is somewhat impossible to not feel any emotion, ever. The act of not feeling emotion is feeling in itself. Perhaps I was just being pedantic and a pot stirrer to brighten the day on Twitter, but is it really possible to not feel any emotion?
@Akuma99 I feel sad, sometimes confused if don't immediately understand the move. I feel pumped when trade working.— Mike Wagner (@wagnermr14) April 2, 2012
Mike gave a great honest answer, and it reflects somewhat on the feelings I get when trading. Although I would angle more towards anger than sadness. On reflection I am still unsure who or what I am angry about. I suspect myself.
@Akuma99 I always do a small curse and then consider all other options before SL gets hit, but you don't want to rush into or out of anythin— FunAndFinance (@FunAndFinance) April 2, 2012
@Akuma99 it really gets nasty and sad when you are in a losing streak :-)— FunAndFinance (@FunAndFinance) April 2, 2012
This answer brings up two great points.
One is to not rush into or out of anything. This shouldn’t mean you procrastinate over it, but thoughtful reflection can help to not jump out of something just as it is about to go in your favour.
All good intentions can go out of the window as your losing streak extends. The more losses, the more tempted you are to “bend” the rules a little, or make new ones up on the spot. This is extremely relevant considering my weekly reports of late.
We have all done it, I certainly have, so a method to distract yourself during those times can be an account saver.
The best thing for frustration, usually one of the primary emotion in an extended losing streak, is time out. The next best is to reduce your size. Both of these though need you to be aware of yourself and your signs of stress.
@Akuma99 If there was a well thought plan behind it I feel a bit sad. If it's unplanned I get angry, feeling it down my throat.— Sorin Chiorean (@sorin_chiorean) April 2, 2012
Soso confirms what Mike and I mentioned earlier, but he puts it so much clearer. Feel disappointed or sad when a trade doesn’t work out. To me that’s fine. Then look to see how you executed the trade.
Anger is more suited to when your rules are broken. When you trade others plans. When you trade, just to trade. Then be angry, just warn the cats in the area and wear soft shoes.
@Akuma99 I use small risk and trade size so it does not impact me emotionally , if I go to big I look to the future, to improve— Casey Stubbs (@caseystubbs) April 4, 2012
Casey mentions a great way to minimise emotion in a trade. Trade a size that seems manageable to you.
Sometimes the best way to do that is find the trade size where you start feeling signs of stress, then half it. Notice the difference in you when trading that size, and the difference in your profits for the week. You might be surprised.