If you’re trading for emotional satisfaction, you’re bound to have lots of problems and continue to struggle, for two reasons. First, often that what feels good is often the wrong thing to do. Second, the game of trading, and it is a game in many respects, involves being disappointed fairly often.
Even for profitable traders a certain number of trades will lose money, and even the winners don’t always work perfectly or match your exact expectations.
As a trader, it’s impossible to avoid disappointment, not every trade is going to work. You get stopped out and then see the trade go on to work without you, or you hesitate and miss the move, or you exit early to book profits and watch the move continue without you. When you think about it, trading involves a lot of disappointment. I cannot think of any other job that involves disappointment on such a regular basis. Even the most successful traders experience this. No way to escape it.
When you experience a lot of disappointment you’re going to experience a high degree of stress. And when stress overwhelms you…and by the way, stress can masquerade as performance anxiety or pressure to succeed, the emotional part of your brain will run right over the logical analytical part of your brain. You’ll know when that happens because that’s when your rules go out the window or you veer from your plan and you take a revenge trade or an impulse trade or you freeze up and hesitate.
Stress and the emotions that come with stress will also negatively impact cognitive flexibility, your ability to adapt to changing market conditions. And that’s a big problem; in many respects you are your own edge, and a big part of that edge is adaptability. The ability to be comfortable or ‘okay’ with disappointment so you can still act in your own best interest often separates the best traders from the rest.
Andrew, Thanks for the post. The 3rd para especially stuck with me i.e., “As a trader, it’s impossible to avoid disappointment…..”.
I got couple of good insights last evening regarding some things I did/not did/did differently in past post session depending on how that day’s session turned out for me. They just occurred out of the blue when I am doing something else outside trading. I suspect it happened probably because the above para stayed in the back of my mind. I think I will go thru the webinar again to see from these lens.
Regards.
@DS
DS,
Learning to tolerate discomfort is a key trait among consistently profitable traders. Trading involves discomfort: being patient and waiting for the set-up signal (the discomfort of boredom and lack of activity), not chasing (discomfort of missing out), taking a loss (discomfort of being wrong), and so on.
It typically takes a lot of ‘inner work’ to learn to tolerate discomfort. And that is why most traders never get to the consistently profitable level of trading. It requires a type of inner work that most never anticipated. Some people are able to pull themselves up by the bootstraps and get there on their own, others are able to internalize what they read in the trading psychology literature and actually do what the books/articles say. And finally, some seek out someone like myself for guidance.
Andrew Menaker, PhD
Greetings,
I’m sorry, but I take exception to your notion that, as you put it:
“As a trader, it’s impossible to avoid disappointment, not every trade is going to work.”
Not every trader feels disappointed after losing a trade, or even after a few losing trades. Answer this for me;
“Do you feel disappointment when the slot machine doesn’t come up all cherries?”
Likely not, that is because you’re not expecting anything but action. If one has truly learned to “think in probabilities”, as most successful traders, then this “disappointment” situation doesn’t even occur. Losing traders yes, but not for “ALL” traders. I believe you logic in this case is flawed, especially when you lump all traders into the same boat. This is simply not the case.
Thanks
To answer your question, yes I’d feel a little disappointed if the slot
machine didn’t come up all cherries, but not the same type of disappointment
from a losing trade.
I’ve never met a trader, winning or not, who’s been in this biz for a while
and doesn’t experience disappointment from time to time.
Greetings Again,
Your argument just doesn’t hold water. I’ve been in the market about 3 times the length that you have, and I personally know more then a couple of long term traders, who upon experiencing a losing trade, honestly could give a tinkers damn about the event. To them, its just the cost of doing business, and a regular part built into their trading plan. They expect losing trades as a normal part of their methodology. And riding the emotional rollercoaster of rising and falling with each individual trade is a losers game to them.
I’m really surprised at you. The semantics game you play with the word “disappointment” in your last sentence is a little sad, and not indicative of the kind of disappointment you’re referencing in the article. Of course we all experience disappointment in our trading from time to time. But let us not confuse this kind of disappointment, with the trade by trade operations of true market professionals. There is just no comparison what so ever.
Thank You
I didn’t realize I was arguing with you. Just sharing my experience of
someone who’s worked with traders since 1995 who’ve told me many times how
they experience disappointment. You write, ‘we all experience disappointment
from time to time’. So I’m not sure where the disagreement is. But if you
want to disagree, that’s okay with me.
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