davidjohnhall

To be successful you need to suppress these emotions, banish them like demons. I have to respectfully disagree with the OP here. I'm of the opinion that, to be a successful trader, you have to UNDERSTAND your emotions. To accept and welcome them. Guys especially. Your emotions will obliterate any chance you have of success if you even try to ignore them. That's because trying to suppress emotions is like trying to hold a beach ball underwater. It will be draining and it will take all of your energy. Instead, the best way out is through. If you are getting emotional over your trading, find out why. Journal about it. Discuss it. Find out where the feelings come from -- your feelings about money, your feelings about yourself, your feelings about success and failure, etc. I think Bill Williams discussed a river analogy. That the river bed creates the river conditions you see on the river's surface. Your job is to smooth out the river bed. Take this quote from Mark Douglas from Trading in the Zone: Traders usually experience a great deal of pain (both emotional and financial) before they acquire the kind of attitude that allows them to function effectively in the market environment. That pain is a birthing process. The acknowledgment of your emotions rather than a banishing of them. And once you go through it you find that your emotions will no longer be a threat because they have been integrated and not outcast. Just my experience. Good luck all!

I think the following quote by Ed Seykota is extremely insightful: Some traders like to lose. So they win by losing. Anthony Robbins said that we are hard wired as humans to seek pleasure and avoid pain. So if you are doing something that is destructive, at some point it must have either brought you pleasure or relieved pain. If someone overeats, it might because the consequences of overeating (the pain) are diminished by the emotional escape they get from doing it (the pleasure). I used to smoke. I started doing it because my friends did it. The consequences of smoking were diminished by my need to fit in. Then it became a habit. Once something becomes a habit, and the pathways are forged, it becomes very difficult to change. (See The Power of Habit). If I'm a trader and I'm constantly doing things that go against my plan or my better instincts, I have to go deep inside to find out what I am getting by being self-destructive. Am I secretly scared of being successful? Do I feel guilty about easy money? There is some positive thing I am getting and it is up to me to find it. Trading in the Zone is a great book to read if you want to go deeper into the nature of self-destructive trading behaviors. But be warned, once you go down that road it may take you into some self-realizations you might not want to face. But it's definitely worth it. Good luck everyone!

Interesting. I once ran a little trading experiment with a few friends in which we traded demo accounts but made each entry and exit transparent to the rest of the group. There was no money on the line -- but you know what -- the stress level was high. Why? Because we were trading ego capital. I urge anyone to give it a try. It's demo trading plus. No capital, but tons of emotions. I learned a lot about myself doing that experiment. And it definitely helped my live trading. Good luck to you!

You have to discover what works for you. Yes, elements of this style of trading work and they work for me on the types of stocks I trade. But nothing in the market is ever easy -- and it wasn't easy to follow trends back then either. Traders don't like to sit. Rising gains make them nervous. Closing for small losses makes them mad. It takes years to learn how to be okay being uncomfortable when there is capital at risk. The best thing you can do is read about all of the master traders and find out which parts of their methods help your own trading and put together your own Franken-Method. :-) But yes -- stocks still trend. Look at TSLA. Great trend. But you will have to suffer through a lot of small losers to find those. In fact 60-70% of your trades will be small losers when you're trend trading. It takes a certain type of trader to be okay with that. Would you be okay winning only 3 out of 10 times. provided you could actually let your winners run when you have one. Most can't. They do the opposite. They close out their winners for +5% and +10% and they let their losers run to -30% and -50% hoping they'll come back. It's tough out there! Good luck to you.

Dan Zander, arguably the biggest winning retail trader of record was just asked this question. He said he still trades because he loves trading. This is after making 42 million trading. Ultimately, to each his own. If you would quit, that's fine. If you would continue, that's fine. But I'm of the opinion that unless you love to trade you won't find success at it anyway.

Not sure if this is a question for day traders only -- but as a swing trader while I'm in a trade I only do one thing -- look at a set of perfect trades and charts of old trades to remind myself of what I'm looking for. The current trade I'm in will either end up looking like one of those perfect trades, or it won't. This method works wonders for me because I am one of those traders who loves to break his own rules. If I'm in a nicely trending position and there's a strong up day -- I want to close. Just sell into the strength and pretend I can all the top. I can't. So I look at my perfect charts and see that they all end when the trend ends and with a reversal pattern. I also like to keep a group of charts of failed trades -- so I know what those trades look like as well. That way, if a position slides back inside the breakout zone I can stop trying to talk myself into thinking it's okay. LOL Works for me!

This has to be my favorite topic -- how did you go from consistently losing to being profitable -- and/or anywhere in between. I think we can all benefit from our shared experience and collective wisdom and/or lack thereof. I went from a three year losing streak (it was probably the most painful/frustrating thing I have ever experienced) to a three year winning streak by doing the following: 1. Stopping trading. Seriously, you just have to cap it off at some point. If you are not profitable and you haven't been for awhile, then put an end to the misery, take some time off and get a fresh perspective. 2. Listed all of my trades. Wow -- talk about reliving the pain. I remember at one point I was listing the trades and they were going down like this: loser, loser, loser, loser, loser, loser... I was freaking out. 3. Printed charts of all my trades. I know, I know, I should have been doing this from the beginning. But it was another sobering exercise. I remember one trade I was in and closed with a 5% gain for NO REASON AT ALL. Trend was still up. Technicals looked healthy. No reversal patterns anywhere in sight. And two days later it gapped up 40%! LOL. That's life when you don't know what the heck you're doing. 4. Saw what was not working for me (almost everything) and what was working for me (almost nothing). Resolved to never do what didn't work (buying new lows, adding to losers, counter trend trading with 80% of my account in a single position), trading on partial completion bars) and only do what did work (continuation patterns after first thrust of the bottom) W bottoms, trend following, risk smaller percent of total equity. 5. Resolved not to start trading again until I could at minimum create and backtest a system based on what was working for me in the market and know going in all of my stats. I remember that first trade back. It was in AAPL. It was a winner. But it could have been a loser and I was fine. I was trading with the right position size. I was trading the right kind of method for me -- swing trading continuation patterns -- and I was trading in the right market -- up trending. It made all the difference. And I mean ALL the difference. These days trading is fun for me. Oh, I'm not rich or anything and the struggles still show up, but I am trading on a ten year plan now (not looking at to get rich over night) and feel very positive about the future prospects of my trading and my goals. What a journey! Wow. I applaud anyone making a go at the market, putting in the time and the work, and helping others on forums like this by sharing and offering helpful tips. As far as I am concerned there IS a holy grail in the market and that holy grail is called experience. Good luck all.

How long have you been trading? There's a huge learning curve and you will lose a lot along the way. If you don't know how to lose or have a huge ego in the way you are in for a massive struggle. Should you quit? Yes. If that's what you want to do. No one is forcing you to be a trader and if you are not enjoying the process either your expectations are too high and need to be adjusted or trading is not compatible with your personality. The market is not here to give you anything. It's not here to be easy. And will not become easy so your emotional pain can ease. Most of us just want to feel successful at something. We want to win. But you can't beat the market. It will destroy you is you try. You can learn to become the market and in the process you will lose a ton. A ton of hours. A ton of money. A ton of energy. For some the trade off is worth it. For me it was/is. There are a ton of benefits that come out of dedication and commitment far beyond money. Good luck to you whatever you choice ends up being.

1,000 times yes. Trading is the most fun you can have with bar charts. :-)

I think a lot of the emotions surrounding trading (fear, greed, over-confidance, depression, etc.) come from what we think we are going to have when we obtain this vague amount of "money" we're striving for. Instead of mastering the trade it becomes about: this trade is moving me closer to my fantasy life (OMG I'm so excited, I'm a rockstar, I'm a hero, I'm a winner, I'm a God, finally life is going to be EASY!) -- to this trade is moving me away from my fantasy life (Damn, I'm so depressed, I'm such a loser, I'm worthless, I'm a coward, etc.). Do we think this way when we go to our day jobs? Maybe. I don't know. Maybe trading is the promise of not feeling that way ever again. But that feeling has got nothing to do with money -- in my opinion. Trading offers us all the possibility of financial freedom. Yes. But so do many other professions. Lawyers, doctors, plumbers (yes, I know 2 millionaire plumbers), business owners, almost anything you can think of. Money, in the case of trading, is nothing more than the raw material we have to work with to master the craft. We have charts, indicators, systems, and capital. Unfortunately, there is so much emotion surrounding money. But the emotions have nothing to do with the money itself. It's not even what we think we're going to buy with the money. It's who we think we are going to be. I did an exercise once regarding money. Played a fantasy game where I plotted out a perfect fantasy life where I had all the money I could ever want...and visualized it down to the tiniest detail...then asked myself how I felt...what was the overriding emotion I was feeling as uber wealthy me. The overwhelming feeling was "relaxed"... LOL I knew right then and there that a luxury for me was associated with relaxing. Relaxing. That's it. I don't need a gazillion dollars to relax. I just need to relax...and enjoy it. So that's what I started doing...relaxing. And a lot got better. This feeling that's "out there" doesn't really exist (in my opinion). Think of an area of your life where you have abundance. I don't care if it's "I have more tube socks than I know what to do with". Do you walk around feeling amazing about it all the time? No. It's just the way it is. Right now, you probably have a television that costs more than a years wages in some countries. Do you wake up feeling amazed by that fact? I bet you don't. The same would happen with wealth after awhile. You're not going to be "super you" you're just going to be you. The real joy of trading comes from trading right...and learning what that it. Learning how to do it. Learning how to take a loss and move on. Learning how to pull the trigger and flow with the market. Learning how to backtest and what the results mean. Learning how to read charts and form conclusions. This idea really helped me relax when it came to trading, relax. My perfect life wasn't moving closer or further away. My perfect life was available any time I wanted it. Trading is just a game I've chosen to challenge myself and to apply my mental abilities. David John Hall

All we need to do is pull up a chart from the 40's, 50's, 60's, 70's etc. and compare them with a chart from the 2000's. Or look at a chart of the tulip bubble mania in the 1700's. Transaction costs may have gotten smaller, computer's may have been introduced, indicators may have been designed by the bucketload, but charts look the same as ever. This gives me great comfort and confidence. I don't have to worry about trading in some sort of shifting quicksand that switches and changes all the time. I am trading human nature (mostly mine) and that always seems to stay the same. For a perfect visual example, take a look at these two charts. First, Texas instruments in 1957 -- one of Nicholas Darvas' famed trades: Now, Texas Instruments nearly 40 years later pretty much to the day in 1997: I don't know how anyone else feels about those charts -- but I think they're great. If you were trading in 1957 you would be trading just as you would be in 1997 -- except your commissions were $100 per round turn back then (I think). But a breakout would still be a breakout. You would still have to let your profits run. If that trade had failed you would still have to cut your losses short. You would still need an exit strategy and a money management strategy and a trade management strategy. Darvas used his Darvas boxes. That's how he managed his trade, yes, but more importantly, that's how he managed himself. As long as the trade was making higher boxes, he was staying in. This is how he managed his fear, his boredom, his greed, etc. And if he was trading in 1997, or 2007 or any other 7 he would have to still do the same things. I think it's fantastic. David John Hall

Hi John, I'm not sure how anyone else views this topic, but for me: The more things change, the more they stay the same. For the most part, I am trading my own psychology, because that's the only one I can know. Where the personal becomes the universal. I have been on a kick the last few years of reading trading books from other decades...30's through today...and things never change. And when I say never, I mean NEVER. Well, maybe indicators, but most of them don't work anyway. LOL In all of those past years they were still talking about cutting losses, letting winners run, managing greed and fear, following the trend, the importance of contrary thinking...and the list goes on. And when I pull up charts from the 20's through today, I also don't see anything different. Cycles come and go, bull markets, bear markets, flat markets. So I stick to my plan and don't worry about anyone who says the market is "different this time", because every time I've heard that in the time that I've been trading (in 2007-8 at the top and 2009 at the bottom) the market was supposed to be different this time and it wasn't. In 2007 it was supposed to keep going up, and 2009 it was supposed to keep going down. So I just keep learning about myself and keep reading those books. Here's a list of Rules from 1890: 1. Don't over trade. 2. Never average down. 3. Cut losses short and let winners run. 4. Never follow the herd 5. Know the role that luck plays 6. When in doubt, stay out 7. Buy strength, sell weakness In book after book it's the same. To me that says a lot. David John Hall

plus the cookie market is so illiquid and can crumble at any moment, and the pizza market is likely to sag LOL So true, Siuya!

I would have to say that trading cookies for pizza is certainly speculation. Don't think with your adult brain - think like a 10 year old about the matter. You are taking your cash (not easy to come by when you're 10) and buying cookies with the sole intent of trading them. What if the demand for cookies drops off? What if the cost of cookies for pizza doubles? What if another student decided to trade twice as many cookies for the same pizza? Trust me - these kids are making complex transactions. LOL I think even Buffet once gave credit to selling bubble gum as a 5 year old for his introduction into business and that he rarely uses abilities outside what he learned during that endeavor. When it comes to your risk - you had better make sure you are defining it. And if you are not defining it just assume you are risking it all. Rarely do I ever feel any more pressure trading dollars for stocks than Eric feels trading cookies for...whatever he trades them for (I don't think I ever mentioned pizza in my first post). In his recent book - You Already Know How To Be Great - Alan Fine discusses how we sometimes let complicated concepts get in the way of execution. He was teaching a tennis student how to hit the ball and her performance was horrible. No matter how many concepts he fed her and how much tennis theory he shoved down her throat he was getting nowhere. Finally he told her that when the ball hits the ground say "bounce" in your head, and then when you are to hit the ball say "hit" in your head. This player's performance immediately increased 10x. I think our performance in a lot of areas would improve if we sliced and diced them with Occam's Razor. LOL David John Hall Bounce...hit...bounce...hit... Cookies...pizza...cookies...pizza... Money....stocks....money....stocks...

Hi MM -- I agree completely! My girlfriend's son has started asking her to buy chocolate chip cookies for lunch -- not because he wants to eat them -- but because they make great trading chips (pun intended) at lunch and he can use them to trade up for other items. I was laughing hard when I heard this the other day. I used to trade toys and Star Wars cards and all sorts of things when I was a kid. You have something I want, let's see if if I have something you want and let's make a trade. In trading, I have money and you have a position. If you want to get out of your position and I like your price we have a trade. Bill Williams states that a trade happens when two people agree on price but not on value. I love that definition and say that one of the best things you can do is learn the value (through technical analysis or fundamental analysis or both) of what you are trading. David John Hall Wanna trade?