Discipline Issues, How To Find Direction and Reality Checks
Disclaimer: These are all just my personal thoughts on certain aspects of trading psyche and how to get from Point A to Point B. None of it is fact, nor am I claiming to be correct or incorrect, they're just some realizations I've come up with from my own experiences. If you're a fluffy optimist, you probably won't enjoy this post. If you're a realist, (the only approach to have as a trader in my opinion) then enjoy.
"How can I stop revenge trading. I take 1 step forward and 2 steps back constantly, I hate it. And I can't stop."
Here is what you need to understand if you're throwing that question around to traders you respect and who you think will listen to or answer you. This is an internal problem. Stop seeking outside help on this topic. It's not floating around the internet in 160 characters from a tweet, nobody is going to come to your house and babysit you while you trade and say "Now now Johnny boy...don't jump right back in that trade you just got stopped out of because you're angry! Thats called revenge trading! And it's bad!" Right? Of course not. These things stem from other internal issues, and your inability to stop revenge trading is likely just a symptomatic flaw in the top down mechanism that is a traders psyche. Just like anything else in life, if you want to reach the "next level" on whatever goal it is you're pursuing - theres a common theme of action going forward: And that is to stop looking to others to solve your problems or help you. Look in the mirror. Trading is an individual profession as it is, and the path to get there is not much different - this is not a "group project," nor does asking the teacher really do you much good.
Was that the last thing you wanted to hear? Probably. But there is a reason 90%+ lose money chasing this dream and never achieve it. It's NOT easy! If there was a way you could just contact some great trader, listen to him for a few weeks, follow his alerts and then start magically making money, everyone would be doing it.
Someone shared this with me yesterday and I think it's great and directly applicable to the mindset you need starting your trading journey.
https://www.youtube.com/watch?v=tt4jRorzyT4&feature=youtu.be
I want you to seriously reflect on this next question, and be honest. If you're not honest with yourself, the only person you'll be hurting is you. Ask yourself: Do I actually love trading? Most of you will jump right to the front of the line without thinking twice and scream "Yes! Of course I love trading!"
Someone shared this with me yesterday and I think it's great and directly applicable to the mindset you need starting your trading journey.
https://www.youtube.com/watch?v=tt4jRorzyT4&feature=youtu.be
I want you to seriously reflect on this next question, and be honest. If you're not honest with yourself, the only person you'll be hurting is you. Ask yourself: Do I actually love trading? Most of you will jump right to the front of the line without thinking twice and scream "Yes! Of course I love trading!"
But do you really? "Trading" is a very misconstrued word.
I didn't say "Do you like the idea of a way to make money very quickly with little effort" or "Do you like the rush of gambling" or "Do you like being entertained and playing a game with real money"
A lot of people probably got into this for those things just stated above, and slap "Trading" on the title. But it's not. Every successful trader out there that you know - they love trading. There is a massive, massive difference between loving trading, and being a greedy pig and loving money.
When I was first starting, I don't think my answer was "yes" either.
If your primary goal when starting this game is to "make a lot of money", do you think you have any chance to ever stop overtrading? Absolutely not. If your primary goal when starting this game is "Man I would love the trader lifestyle of no boss and easy money and freedom" do you think you ever have a prayer to ever stop forcing things and trying to constantly "make it happen"? Absolutely not. If your motives for being here are not sound in a desire to learn the art of TRADING, not the art of making money (the two become synonymous eventually but you have to start with the first one) - you'll be in a perpetual cycle of agony forever.
The reality here? Not everyone is meant to be a trader. Plain and simple. It probably stems down deep into our physiology and genetic makeup - maybe you're just a hot head by nature and get by being undisciplined in other areas of your life as well, which bleeds negatively into your trading - or maybe you're just a wimp (can't think of a better word, sorry) and the thought of being in a big trade or losing a lot of money is just unfathomable to you and sends you off the rails emotionally. Perhaps you're on the polar opposite end of that spectrum and you're such a gambler, that the thought of losing a lot of money doesn't scare you enough. There are an endless amount of personality trait combinations a person can have, and only a very small handful of them that are compatible with successful day trading. Incompatible combinations CAN be changed to suit trading..but holy hell is it hard.
I believe on some level, you either have it in you or you don't. Most of the traders who make it out alive "had it" all along from the beginning. There are certain things you must change and tweak and make improvements of course, but there has to be a base foundation there already.
An analogy would be "I want to play in the MLB." I was a pitcher in high school. My fastball was 80mph. No matter how badly I want to pitch in the MLB, it's just not going to happen. You could give Aroldis Chapman a ball of cotton candy and told him he had to throw it righty (he's a lefty) and he would still probably throw it faster than my best fastball. He was meant to pitch in the MLB. I was not. That is a physical parallel to our example which is much more mental re: trading - but the lesson is the same. The point is it takes an extremely odd and weird personality complexion to be a successful trader. Just as I have physical limits that prevent me from being an MLB pitcher, 90% of traders will have mental limits preventing them from being successful day traders. The core competency can't really be taught is what I'm getting at I guess. It's something you either adopt from within & evolve as a cognizant individual - or you die. And whining and crying about your trading misfortunes is not part of that evolution, by the way.
So now that I've thoroughly discouraged you - take it as a challenge. Dig deep and decide if you really do love trading. And if that answer is yes, then you'll know you need to change, and you will.
And if that answer is no, figure out how to turn it into a yes, or you're in trouble.
I forget who said this, I believe it was Gregg Sciabica (Lx21):
"You don't get paid to TRADE, you get paid to capitalize on opportunity." (No, there is not high probability opportunity in every chart you look at, even though you're probably pretty good at convincing yourself there is) - That is so important to take with you every single morning to the battle field. To remember you're not there to trade, you're there to make money. NOT the same thing. Successful day trading is a constant process of fending off your demons. They never go away, the ones who make it just learn to manage them effectively. They are the silent assassins. They sit back and wait, letting all the idiots trip over each other and then attack when they've exhausted themselves.
The reality here? Not everyone is meant to be a trader. Plain and simple. It probably stems down deep into our physiology and genetic makeup - maybe you're just a hot head by nature and get by being undisciplined in other areas of your life as well, which bleeds negatively into your trading - or maybe you're just a wimp (can't think of a better word, sorry) and the thought of being in a big trade or losing a lot of money is just unfathomable to you and sends you off the rails emotionally. Perhaps you're on the polar opposite end of that spectrum and you're such a gambler, that the thought of losing a lot of money doesn't scare you enough. There are an endless amount of personality trait combinations a person can have, and only a very small handful of them that are compatible with successful day trading. Incompatible combinations CAN be changed to suit trading..but holy hell is it hard.
I believe on some level, you either have it in you or you don't. Most of the traders who make it out alive "had it" all along from the beginning. There are certain things you must change and tweak and make improvements of course, but there has to be a base foundation there already.
An analogy would be "I want to play in the MLB." I was a pitcher in high school. My fastball was 80mph. No matter how badly I want to pitch in the MLB, it's just not going to happen. You could give Aroldis Chapman a ball of cotton candy and told him he had to throw it righty (he's a lefty) and he would still probably throw it faster than my best fastball. He was meant to pitch in the MLB. I was not. That is a physical parallel to our example which is much more mental re: trading - but the lesson is the same. The point is it takes an extremely odd and weird personality complexion to be a successful trader. Just as I have physical limits that prevent me from being an MLB pitcher, 90% of traders will have mental limits preventing them from being successful day traders. The core competency can't really be taught is what I'm getting at I guess. It's something you either adopt from within & evolve as a cognizant individual - or you die. And whining and crying about your trading misfortunes is not part of that evolution, by the way.
So now that I've thoroughly discouraged you - take it as a challenge. Dig deep and decide if you really do love trading. And if that answer is yes, then you'll know you need to change, and you will.
And if that answer is no, figure out how to turn it into a yes, or you're in trouble.
I forget who said this, I believe it was Gregg Sciabica (Lx21):
"You don't get paid to TRADE, you get paid to capitalize on opportunity." (No, there is not high probability opportunity in every chart you look at, even though you're probably pretty good at convincing yourself there is) - That is so important to take with you every single morning to the battle field. To remember you're not there to trade, you're there to make money. NOT the same thing. Successful day trading is a constant process of fending off your demons. They never go away, the ones who make it just learn to manage them effectively. They are the silent assassins. They sit back and wait, letting all the idiots trip over each other and then attack when they've exhausted themselves.
So while the odds are stacked against you tremendously, your best shot is doing those two things discussed above.
1) Figure out - do you love TRADING? (Make sure you're actually here for the right reasons)
2) Live by the notion "You don't get paid to trade, you get paid to capitalize on opportunity."
Those ideologies are far more valuable to you than any chart pattern or any DVD or any guru teachings. The sooner you can focus on those two things, the sooner you'll find out if you've really got what it takes to be a trader or not.
Have a great weekend - put the charts down for a bit & THINK. It's much more productive.
Dante
Dante
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