Self Sabotage

[Bfbusa 10]

Self Sabotage

 

What is it and how to stop it.

 

Can anyone elaborate on why we do it and do you have any mental exercises

to deprogram it? ( or know any websites or mentors that help with this?)

[TinGull 10]

I think self sabotage is all about not having the confidence in yourself and/or your plan. I went through this for months and have been doing quite well overcoming most of it lately. How did I? I realized that my plan had 4 or so setups that weren't performing, and those were the ones that I was taking most often. Interesting, eh?

 

So, I cut those out of my plan and I've got 2 setups that perform very well, and I take those 2 90% of the time. They are trending setups as I'm not a good rangebound trader at this point in time, but something I'm definitely working on. Also, I've learned to identify when the highest odds trades are happening (for the most part) and that has helped tremendously with my confidence in myself as well as my system.

 

Self sabotage happens when there is a lack of trust. To get over that, you need to keep things very simple. Look at your trading plan, take the setups that underperform and cut them out. Concentrate on the setup(s) that have made you the most money and crank the hell out of 'em. Why not, right?

 

For mental exercises...I wake up every morning and tell myself what a great day it is to be able to be fortunate enough to not have a stupid boss looming over my desk. To have the ability to take control of my own life and be completely responsible for whatever happens to it. Knowing I've got complete control of my life lets me have complete control of ALL aspects of my life, which 60% of that is trading.

 

"another great day to be a trader!" is what I tell myself. That puts a smile on my face and I'm ready to take on whatever happens. If I get into a trade that doesnt work out...well, I just say "that's tradin'" ala Hubert. And I go downstairs, play with the dogs and come back up a few minutes later with a fresh head.

 

Do I still get frustrated? Absolutely! When I dont get into a trade because either it misses my limit order by a tick or 2 or I was eating lunch or whatever the case may be....I get frustrated. It's my need for participating, which I'm trying to kick the habit of.

 

Leroy (tradingeveryday) told me the other day in one of my coaching sessions that I, as well as ALL other traders) miss thousands of trades every single day. Millions of opportunities are happening any given moment across the spectrum of the financial markets. Do I get ripped up cause I miss all of those trades? "No, Leroy, I dont." Then why get upset missing 1 or 2? The market's gonna open up at 9:30am on the next trading day. It's always going to be there. That is what I call job security. Now...the self sabotage thing could put that security in jeopardy, but having some simple tools (your trading plan (and the confidence in that plan), the right mental attitude and the love of this game) will keep you from doing harm to your account.

 

So..to put it simply, I guess...my day starts like this.

 

•Wake up

•Say to myself "What a fabulous day to be a trader!"

•Eat breakfast

•Take a look at the markets and read some stories to help get me in that frame of mind

•Trade

•Eat lunch

•Maybe trade the afternoon

•Shut down my computer at 4pm

•Go on a walk, watch a movie, cook...most likely cook or bake something...

•Sleep

 

That's basically how I live every weekday. I used to spend 18 hours a day on the markets, now...I spend about an hour a day in a "study" mode and 7 hours finding a place to participate in the markets. After that, my head is cleared of the markets and I don't speak about them to anyone (except in here on occasion). Doing that GREATLY improved my clarity and balance to be prepared for the next day. It's weird...it's like the less I study now, the more I know. The more I used to study, the more I got confused.

 

Hope my rambling helped a little...

[Guest cooter]

It's weird...it's like the less I study now, the more I know. The more I used to study, the more I got confused.

 

 

Wow. Truer words were never spoken. It's almost Zen-like actually.

 

Most traders need to overcome the paralysis of analysis and just keep doing what works for them, and stop doing what doesn't.

 

Unless you're as good as Tiger Woods, and have some innate natural talent to fall back upon, you really don't need to overhaul and retool your swing every other year, so to speak, except, of course, if it isn't working for you at all.

[TinGull 10]

That's why I trade the Tao...errr, Dow....

[Bfbusa 10]

That was an EXCELLENT post Tingull! I appreciate your input.

 

I have realized something about trading. Not only do you learn the setups, the markets , patterns, tape etc. You also learn about your self. Your strength, your weaknesses, hopes and fears. I've learned what kind of person I am. A trader once said if you want to get an idea of what kind of trader your going to be,a disciplined one or not, take a look at yourself in your daily life. It may show up in your trading.

 

The biggest obstacle to success is your-self, at least in my case. I feel SO close to crossing the Rubicon. Just a few steps away to becoming consistently profitable I have the setups, I have the trading plan and risk management in place. I've even identified my impulse trades and eliminated them. The discipline fades in and out but I am getting better. But I still manage to take the losing trades and always seem to " miss out" on the trades that would have been winners. I am also still a victim of my own fears. After a wining trade or 2 losing trades in a row I get fearful and often let a winner go buy.

 

If you know anybody who wants to learn about them self, tell them to try trading because when you do you will be face to face with yourself.

[TinGull 10]

Hey Bill,

 

Thanks. Hoped that was helpful. As for getting the impulse trades out of the way, great job on that. Thats a tough thing for some traders to realize they are doing and do away with them. If you've got risk management in place, then you shouldn't need to think on the risk side so much as the profit side. You need to start identifying the highest odds trades, and for that, I'd definitely check in with Leroy. He's been the single thing that's really put me on track. And...no offense to the chatroom here...but you should try to stop going. I found that when I was alone with my trading and not being influenced by what others were doing, I have been doing huge amounts better. Try it out, and if you find yourself doing better, than you now have eliminated one of the issues.

[Guest cooter]

Just curious, what type of Zen-like moment have you had when trading? When did the lightbulb finally go on, and what was it that triggered the "ah-ha" moment for you?

 

A trader once said if you want to get an idea of what kind of trader your going to be,a disciplined one or not, take a look at yourself in your daily life. It may show up in your trading.

 

CORRECTION: It WILL show up in your trading for certain. Your true inner self will be revealed, with all its flaws and imperfections when your money is on the line, every day, every trade.

 

If you're still in the stage of "papertrading" on the electronic demo, you won't have a clue until you put your money where your mouth is.

 

Too many newbies think it's so easy when their demo trades show a positive expectancy; real world trading just ain't so easy - and they find out the hard way.

 

Getting control of your emotions is the key to trading successfully, followed by money management, and a positive real-world expectancy on your trade setups. All the winning trades in the world won't help you if you don't have a handle on how to properly manage your trades via proper position sizing. Overleveraging, and overtrading is symptomatic of letting your fear and greed get the best of you - only your best winning setups should be taken, and only in accordance with your trading plan.

 

Simply put, plan your trade, and trade your plan.

[Bfbusa 10]

Tingull,

 

We think alike. As much as I like being in the chat room, it has distracted me from trading and has caused me to miss a few trades. Thats why I wasn't there yesterday. I just wanted to concentrate on trading. What I will do for now on is trade first and then enter the room during a quiet period.

[Bfbusa 10]

Just curious, what type of Zen-like moment have you had when trading? When did the lightbulb finally go on, and what was it that triggered the "ah-ha" moment for you?

 

HI Cooter,

 

First let me say your right, it WILL show up in your trading is what I should have said.

 

AS for the ah-ha moment. A couple that I've had are as follows.

 

1. Someone mentioned, I don't recall if it was in a book or another trader, that when we trade we shouldn't try to make money from the markets but look for opportunities to extract money from the opportunities the markets presents to us. It helped me the think of the markets in a different way that was less emotional and more disciplined. Which also ties into the second ah-ha.

 

2. See the setups, trade the setups. I go that from Carter and Hubert. It is helping me to remove the emotion. A Work still in progress.

 

Both are really the same dictum. I guess I needed a 1, 2 punch.

 

There are a few other ah-ha's but those are the the most recent.

 

Hope this helps.

 

ASlo, about paper trading. I really don't paper trade too much anymore. I only paper trade to test new setups, but as you said, you can not get a true feel unless you are actually trading. So I just start out with just one or two contracts at first.

 

Hope this helps.

[TinGull 10]

Just curious, what type of Zen-like moment have you had when trading? When did the lightbulb finally go on, and what was it that triggered the "ah-ha" moment for you?

 

Hey cooter,

 

That moment for me was when I was recently taught to look at market cycles like waves of the ocean. The trough, rise, crest and decline. Seeing what phase the market is in and trading in accordance to that has made the world of difference for me. And...learning to not THINK has been the absolute biggest. When I think instead of react...I get into trouble. So now I just look at what the trend is and trade only in that direction. Sure, it keeps me out of short trades right now, but Im done with trying to call tops. That doesn't provide dinners for people, trading with the trend sure does.

[Don4 10]

I agree with TinGull the biggest problem with self sabotage is not really believing in yourself or your system. Both are very important,the more confidence you have (with a realistic set of goals) the better. When i take a trade i go into knowing that i will have more losers than winners i dont think short term but always longterm. For me my ah-ha moment was knowing that i dont have to be right all the time, focus longterm and not shortterm, and let price come to me,dont chase it.

[Guest cooter]

And...learning to not THINK has been the absolute biggest. When I think instead of react...I get into trouble.

 

Tin, that's such an interesting distinction. Impulsive folks often find themselves in all sorts of trouble with unnecessary drama in their lives simply because they DON'T THINK before they act.

 

Are you referring to a trader moving to the level of "unconscious competency", wherein s/he doesn't have to contemplate their trades, but merely recognizes a valid setup, as Bill noted, and simply acts accordingly? If so, you may have reached the nirvana of trade execution.

[wrbtrader 10]

Self Sabotage

 

What is it and how to stop it.

 

Can anyone elaborate on why we do it and do you have any mental exercises

to deprogram it? ( or know any websites or mentors that help with this?)

 

Hi Bfbusa,

 

Every one has a different experience.

 

Here's my personal experience and listening to the experience of many retail traders along with that of some institutional traders.

 

Self sabotaging occurred via a direct connection to something that's unresolved in my personal life.

 

The same is true for all those traders I personally know.

 

* I know a trader that's not organized, messy and dirty home along with not taking care of his personal grooming as if he hadn't showered in a few days.

 

In his trading, he's very sloppy...puts on trades with no stops and goes off to due personal stuff to come back to see the worst has occurred.

 

However, if you talk to him...he states its just poor trading and lack of discipline.

 

* I know a trader that doesn't have confidence in anything he has done in life. He doubts his abilities and moved from job to job until he became a trader.

 

In his trading, he moves from indicator to indicator, moving from one method to the next method without giving himself a chance to learn how to properly use something.

 

He studies the markets 12 hours per day and feels is never enough while struggling as a breakeven trader.

 

* I know a trader that is always blaming others for anything that goes wrong in his life. He never accepts responsibility nor is able to discuss that it takes two to tangle sort'uv speak.

 

In his trading he blames the market for his losses, market makers, market manipulation, data provider, ISP and anything else.

 

He frequently is telling others at forums how wrong they are and how right he is.

 

He's a losing trader and gives up very easily after easily getting frustrated with a single trade loss...

 

Overall he's a losing trader.

 

-------------------

 

I can go on and on to talk about those that are impulsive problems, anger management problems, multitasking problems, party types, liars et cetera but I think you get the point.

 

That is, before we can resolve self sabotaging, we need to be able to resolve those things in our personal lives that has transcribed itself into our trading.

 

Step back and take a long look in the mirror.

 

Myself, I'm a perfectionist in my personal life and I have worked very hard to just not be so anal about things.

 

In my trading, I've learn that losses happen and that I can actually benefit from a loss to help me be profitable in my next trade.

 

It took years to not be so anal in my trading and that improved my trading tremendously without having to change any method nor rule in my method (tweaking me system) when all I had to do was tweak myself sort'uv speak.

 

Simply, one of the commonalities of the successful traders I know is that they are in tuned with whom they are, aware of how their personal behaviors gets transcribed into their trading and they've learn to deal (resolve) these things as they interact with the markets.

 

Mark

(a.k.a. NihabaAshi) Japanese Candlestick term

 

"Volatility Analysis is a doorway to consistent profits."

[TinGull 10]

Tin, that's such an interesting distinction. Impulsive folks often find themselves in all sorts of trouble with unnecessary drama in their lives simply because they DON'T THINK before they act.

 

Are you referring to a trader moving to the level of "unconscious competency", wherein s/he doesn't have to contemplate their trades, but merely recognizes a valid setup, as Bill noted, and simply acts accordingly? If so, you may have reached the nirvana of trade execution.

 

That's pretty much what I'm talking about, cooter. Being able to see my setups about to occur and being poised to pull the trigger knowing it's a high odds trade. The biggest emotional battle I've been contending with lately is missing a move from having a limit order set in place and the market missing me by a tick or 2. That's the worst feeling!

[Guest cooter]

... when we trade we shouldn't try to make money from the markets but look for opportunities to extract money from the opportunities the markets presents to us.

 

I gotta agree with you here, Bill. In Vegas, the odds are favored towards the house. In the markets, the odds favor Professional Money. Thus, another ah-ha moment was when I realized the Volume does indeed paint a picture of where price will go...and that Volume is reflective of Professional Money entering and exiting the market.

[Soultrader 12]

Hi Bfbusa,

 

Every one has a different experience.

 

Here's my personal experience and listening to the experience of many retail traders along with that of some institutional traders.

 

Self sabotaging occurred via a direct connection to something that's unresolved in my personal life.

 

The same is true for all those traders I personally know.

 

* I know a trader that's not organized, messy and dirty home along with not taking care of his personal grooming as if he hadn't showered in a few days.

 

In his trading, he's very sloppy...puts on trades with no stops and goes off to due personal stuff to come back to see the worst has occurred.

 

However, if you talk to him...he states its just poor trading and lack of discipline.

 

* I know a trader that doesn't have confidence in anything he has done in life. He doubts his abilities and moved from job to job until he became a trader.

 

In his trading, he moves from indicator to indicator, moving from one method to the next method without giving himself a chance to learn how to properly use something.

 

He studies the markets 12 hours per day and feels is never enough while struggling as a breakeven trader.

 

* I know a trader that is always blaming others for anything that goes wrong in his life. He never accepts responsibility nor is able to discuss that it takes two to tangle sort'uv speak.

 

In his trading he blames the market for his losses, market makers, market manipulation, data provider, ISP and anything else.

 

He frequently is telling others at forums how wrong they are and how right he is.

 

He's a losing trader and gives up very easily after easily getting frustrated with a single trade loss...

 

Overall he's a losing trader.

 

-------------------

 

I can go on and on to talk about those that are impulsive problems, anger management problems, multitasking problems, party types, liars et cetera but I think you get the point.

 

That is, before we can resolve self sabotaging, we need to be able to resolve those things in our personal lives that has transcribed itself into our trading.

 

Step back and take a long look in the mirror.

 

Myself, I'm a perfectionist in my personal life and I have worked very hard to just not be so anal about things.

 

In my trading, I've learn that losses happen and that I can actually benefit from a loss to help me be profitable in my next trade.

 

It took years to not be so anal in my trading and that improved my trading tremendously without having to change any method nor rule in my method (tweaking me system) when all I had to do was tweak myself sort'uv speak.

 

Simply, one of the commonalities of the successful traders I know is that they are in tuned with whom they are, aware of how their personal behaviors gets transcribed into their trading and they've learn to deal (resolve) these things as they interact with the markets.

 

Mark

(a.k.a. NihabaAshi) Japanese Candlestick term

 

"Volatility Analysis is a doorway to consistent profits."

 

Very good points there Mark. Mind if I ask what your thoughts are on impulsive behavior and trading? Thanks

[Guest cooter]

That's pretty much what I'm talking about, cooter. Being able to see my setups about to occur and being poised to pull the trigger knowing it's a high odds trade. The biggest emotional battle I've been contending with lately is missing a move from having a limit order set in place and the market missing me by a tick or 2. That's the worst feeling!

 

Yep. I guess how we pull the trigger is equally as important as the decision to actually do so. Such is the life of a discretionary trader versus an impulsive trader.

 

But here's one thing to consider. Would your setup still have been valid if you had entered at the time of recognition with a market order versus a limit order?

[wrbtrader 10]

Very good points there Mark. Mind if I ask what your thoughts are on impulsive behavior and trading? Thanks

 

Hi Soultrader,

 

There are lots of books on how to control impulsive behavior and I myself am no expert on the subject.

 

Also, most major cities have meeting groups for adults that get together and discuss their impulsive behaviors and how it is causing problems in their professional careers.

 

I guess there must be someone with a clinical background organizing these types of discussion/resolution groups.

 

With that said, from a trading point of view, these types of traders tend to easily become overwhelmed with anything involving trading.

 

As soon as they realize something is no longer manageable, to ease that feeling or agony of being overwhelmed...

 

They take impulsive trades as in trades outside their trading plan or don't manage trades by their trading plan.

 

Myself, if I feel like I'm getting too anxious or too aggressive in my trading...I stop trading and do a physical exercise for about 20 - 30mins and then when I'm done with that I sit down and go over in my head with my eyes closed via visualizing completing any uncompleted personal task that's not trading related (ex. fixing the flat tire on my spouse mountain bike).

 

This calms me down and allows me to refocus along with giving me confidence I can stick to the trading plan and complete my trades as designed.

 

In addition, I keep a personal trading diary that documents how I felt while trading along with highlighting a few key trades where I felt things felt too stressed.

 

By the way, if anyone suspects they have a serious problem with impulsive behavior, they shouldn't be trading because they are under a high level of tension and should be under psychological professional care.

 

Mark

[TinGull 10]

Yep. I guess how we pull the trigger is equally as important as the decision to actually do so. Such is the life of a discretionary trader versus an impulsive trader.

 

But here's one thing to consider. Would your setup still have been valid if you had entered at the time of recognition with a market order versus a limit order?

 

Sure would have still been valid. Thats one thing I'm trying to work on...getting in with a market order and being able to see with the best of my abilities that I'm getting in at a great price. Something I'm sure I'll be working on for some time

[Guest cooter]

Sure would have still been valid. Thats one thing I'm trying to work on...getting in with a market order and being able to see with the best of my abilities that I'm getting in at a great price. Something I'm sure I'll be working on for some time

 

Hi Tin,

In so long as your definition of valid includes a positive expectancy (i.e. a winning setup means winning trade), one thing I would consider then is simply reducing your position size until you are comfortable with the "emotional" risk quotient of your trading when using market orders.

 

Alternatively, I would take my position and split the size into two - assign half to a market order, and the other half as a limit order - with the appropriate stops in place for both.

 

That should help ease you in to taking your setups when you see them.

[dalby 10]

I have trained several other traders, as well as my personal experience, and one thing (from this limited "n" ) is clear:

 

it is true that the emotional aspects of trading are much more difficult for most traders to master, and are the primary impediment to profitability for most traders.

 

first and foremost, a trader should have a professional mindset. the things i list are not NECESSARY for success (because people vary individually), but for people having problems with discipline, they are often very helpful.

 

the following apply to futures scalping/short term trading...

 

1) Treat your trading as a business. Because it is. Your trading decisions are business decisions. That mindset helps keep you out of impulsively trading/

2) DO YOUR RESEARCH.

3) Have a plan, but have the flexibility to change your plan based on the price action

4) NEVER EVER EVER EVER move your stops WIDER than they were set upon entry

5) always set a stop upon (or before even) entry

6) trade a size that is emotionally comfortable for you & is small enough to give you almost no risk of ruin. just because you can trade 10 contracts doesn't mean you should

7) log your trades - reason for the trade, emotional state at time of trade, etc.

8) review your trades

9) be a professional

10) be a professional

11) be a professional

12) have a well defined ruleset

13) don't break your rules

14) have a trading manual

15) take profits out of your account and invest them in solid stuff (i like stocks like XOM JNJ BA GOOG BDX MO (i've had GOOG since IPO) etc.).

16) reward yourself for following the rules.

17) punish yourself for breaking them

18) try an audio commentary. you may feel like an idiot talking to yourself, into a mic, but it keeps you "in the moment", reflective, and calm

 

that's just a beginning, but you get the point.

 

if you trade index futures you are competing with other traders. be a professional, and take money from the amateurs.

7)

[torero 10]

I have trained several other traders, as well as my personal experience, and one thing (from this limited "n" ) is clear:

 

it is true that the emotional aspects of trading are much more difficult for most traders to master, and are the primary impediment to profitability for most traders.

 

first and foremost, a trader should have a professional mindset. the things i list are not NECESSARY for success (because people vary individually), but for people having problems with discipline, they are often very helpful.

 

the following apply to futures scalping/short term trading...

 

1) Treat your trading as a business. Because it is. Your trading decisions are business decisions. That mindset helps keep you out of impulsively trading/

2) DO YOUR RESEARCH.

3) Have a plan, but have the flexibility to change your plan based on the price action

4) NEVER EVER EVER EVER move your stops WIDER than they were set upon entry

5) always set a stop upon (or before even) entry

6) trade a size that is emotionally comfortable for you & is small enough to give you almost no risk of ruin. just because you can trade 10 contracts doesn't mean you should

7) log your trades - reason for the trade, emotional state at time of trade, etc.

8) review your trades

9) be a professional

10) be a professional

11) be a professional

12) have a well defined ruleset

13) don't break your rules

14) have a trading manual

15) take profits out of your account and invest them in solid stuff (i like stocks like XOM JNJ BA GOOG BDX MO (i've had GOOG since IPO) etc.).

16) reward yourself for following the rules.

17) punish yourself for breaking them

18) try an audio commentary. you may feel like an idiot talking to yourself, into a mic, but it keeps you "in the moment", reflective, and calm

 

that's just a beginning, but you get the point.

 

if you trade index futures you are competing with other traders. be a professional, and take money from the amateurs.

7)

 

Adding to this list that improved my trading is the simultaneous use of chart recording with personal commentaries. When you back to review at a later time, you get a better feel how you were, more vivid, than you'd look back at the journal alone. That is, keep a journal AND video record your charts with audio commentaries before and during the trade. You'd be surprised how much improvement you'd making, catching yourself with no-nos. It's a bit nerve-wracking at first concentrating on the trade and fondling other tools. Practice it first without trading and become quick and efficient at turning on and off, etc before doing it with a live real trade. It's a hassle at first, but it'll pay off in the end. Try to replicate what John Carter and Hubert do in their chat room: audio and video trading.

[TinGull 10]

Alternatively, I would take my position and split the size into two - assign half to a market order, and the other half as a limit order - with the appropriate stops in place for both.

 

That should help ease you in to taking your setups when you see them.

 

Thats very interesting, and something I never thought of. I might try that out.

 

Thanks cooter!

[Bfbusa 10]

Nice responses everybody. I really appreciate the input. Keep it coming.

 

I find that I agree with both points of view.

 

Self sabotage I feel can and does come from not fulling having confidence in your system. That will only be corrected from back and forward testing.

 

But I also agree with the other point of view that self sabotage can also come from a much deeper cause. Something in someone's psyche, what that is, I don't know.

[torero 10]

It's true that self-sabotage will be self-evident in your own personal life when you interact with others and view of yourself. How many times did you lose control when a certain situation didn't go your way, say lost a friendly game, got into an argument with a family member, lose your job, etc. if those moments made you feel like a nobody or a loser, next thing to do was validate that feeling by either going out on a drinking binge or something that just to inflict yourself and say, "you see, you are a loser." If those scenarios sound familiar, there's your answer.

 

Been there, I got over when I realized what I was trading exactly the same way I acted out in real life. I remember many times I would go into a drawdown, I didn't try to pick myself pick or walk away and count to 10 and refocus, I just kept getting back in and re-validate what I thought of myself in a negative way. When I started to make changes in correcting my thought process and deal with the aftermath of a situation above, things somehow smoothed really well. I trusted in myself NOT to lose control, not to inflict myself by validating my view of worthlessness by doing just the opposite. That simple change made a huge difference in trading. Try it, you may like it. What turned me around was actually a parenthood site that a list of recommendations on how to be a better parent. It was an eye-opener. Like Elder with his AA analogies, I felt more identified with parenthood problems. Made a huge impact on me.