Trading & Gambling

[evolved trader 10]

Hi everyone

 

As some of you may know from reading my posts I have been having some challenges executing my trades properly following my edge. Since the beginning of December I decided to invest some time into paper trading and mentally trading as well. I figured it was best to get re-focused again before risking anymore capital.

 

Hypothetically I’ve been doing excellent. The challenge is that I haven’t been able to simulate the same emotional feelings paper trading as when actually trading live. So of course my results are outstanding as there is no distorted view of my edge, or any fear or greed gripping my actions.

 

I had an interesting experience the other day at the Casino that basically pinpointed where my block is. I rarely go to the casino, maybe twice a year. My girlfriend really wanted to go so I said I’d tag along. I sat down at a slot machine next to here and slipped in $20. After about a couple minutes of playing the machine I could feel the exact same feeling from trading being released. My heart rate started to increase, my palms started to sweat and I could actually feel small beads of sweat slowing dripping down from my armpits! (Sorry for being descriptive!). Here I was, already consciously accepted the risk before I put in ONLY $20 and I’m realising all kinds of fear based chemicals into my body. Its the exact same emotional feelings I’ve been having during trading the past few months.

 

When I first started trading (5 years ago) I was never like this. It’s definitely not a healthy way to trade and I’m now thinking I must be viewing the markets as gambling and not strategic trading. I can think of one negative major emotional experience that happened to me where I lost a large chunk of my capital and it basically wiped me out (this was about 2 years ago now). And an additional negative emotional experience about six months 4 months ago.

 

Now that I feel I know where the block is I wondered if anyone would suggest and mental techniques. Has anyone done NLP? Or EFT? Or even possibly personal hypnosis. It seems very clear that I have a neurological block that’s creating all these feelings. I ‘m just looking forward to trading again like when I was focused, calm, and relaxed!

 

Thanks everyone.

Ryan:)

[brownsfan019 17]

Ryan,

It's not easy going through mental blocks and I've been there before. I didn't do any of the brain teasers that you mentioned, just hard work and focus eventually paid off.

 

IMO it comes down to having faith in your system and being able to execute it like a robot, ie leave emotions at the door. Much easier said than done, I know. But until you can put your emotions in check, it will be difficult to trade.

 

I've said before that I think it's actually easier to trade when you first start vs. getting your teeth kicked in a few times. After that beating, it's hard to get back up and do it again. And I think that's what happens to many traders - they start very ambitiously and ready to go, lose some money, realize this is not easy and watching $ go away hurts; therefore much harder to keep at it over time.

[Ingot54 13]

 

Now that I feel I know where the block is I wondered if anyone would suggest and mental techniques. Has anyone done NLP? Or EFT? Or even possibly personal hypnosis. It seems very clear that I have a neurological block that’s creating all these feelings. I ‘m just looking forward to trading again like when I was focused, calm, and relaxed!

 

I hope Ryan is still around, or has been able to resolve this issue - as Brownsfan said - he's "been there before".

 

My story is a little different ... but similar. I went through a stage where I could NOT look at a chart of anything and even pick whether the chart was showing some pullback or a bounce off Support or Resistance. In fact at that time I used to sit and simply stare at the charts mindlessly at times, not able to find any opportunity to trade at all.

 

When I did enter a trade, it tanked!

 

I am a fan of NLP or hypnotherapy because I have seen the results in others, but at the time this was not an option for me. I had once been to a Trading Coach (you may have heard of Chris Shea here in Australia (Google has). And I rang Chris to see what I could do about it.

 

He had only one piece of advice - get away from trading and charts for three months. I was not to even look at a chart or think about them, or strategies etc. I sim[ly could not achieve the three months - but I did get two weeks, followed by another half-hearted fortnight where I semi-abstained from looking for trades.

 

By then I was beginning to think better as the fog began to lift, and I began to understand the sheer power of taking a break. I would recommend this to any trader, whether in a bad patch or not. There is simply NO SUBSTITUTE for getting away from the desk for a few weeks as a way to restore sharpness and clarity in analysis of your trades.

 

I still do it for periods of time - but it is difficult to switch off "cold turkey"! It is something you have to mentally prepare for as well, so that you do not find yourself sitting and wondering what to do. You WILL go through some withdrawal - but it is all part of the healing process.

 

You have to find alternative things to do - set goals to catch up with friends and relatives - get in touch emotionally with family again (it's been awhile, hasn't it!). And I am sure there is that fishing rod / golf set / bowling ball etc sitting there gathering dust. And if all that fails, what about getting some fitness to reduce that waistline, or reducing the backlog of little (and big) maintenance jobs that has been building up while you have been learning to trade or earning your pips?

 

In short, there is nothing like getting back in touch with life - walking barefoot in the park ... to use a cliche.

 

It can be done, and the effects can be very rewarding in ways that you may have forgotten - and the biggest bonus of all - you will have freed yourself from the trading tyrant - you will be back in control.

[zeke 10]

i think what you are experiencing is completely normal and it happens because you havent get used to risk real money.

 

First trade will be difficult then slowly as you make money the confidence will come and then it is up to you how you will handle the overconfidence because it is going to come as well!

 

i dont think paper trading will help you much on this, just do one trade and then another one and then another one until your body and mind get use to the feeling of taking risk and might lose money!

[Tradewinds 12]

First of all. Thanks for starting this post. As I was reading this thread, I realized that I once had some anxiety (not related to trading) that I was able to overcome.

Like the original poster, I also have a fear of trading live. But I just had an insight while reading this thread. I had another anxiety in the past that I overcame. I just made the connection while reading this thread between my other anxiety, and how I was able to overcome it. Wow! I feel like a piece of the puzzle just fell into place. Anyway, here is what helped me overcome my other anxiety. I would simply tell myself that it was uncomfortable, but in 15 minutes, or half an hour, my anxiety would go away, and everything will be fine. My anxiety, and uncomfortable feelings are just created by to much adrenaline, and it will work through my system in a few minutes, then go away. So, it's just a irrational, learned, automatic, chemical reaction that I can retrain. Eventually, my fears went away. The point is, I had to engage my will, and force myself to simply endure the uncomfortable feelings, and trust that they will pass.

There is a big difference between trading, and the fear that I had. I would get an anxiety attack, just getting in my vehicle to drive somewhere. There is risk in driving, but it's a different risk than trading. Almost anyone can safely drive. Not just anyone can safely trade. That's the difference.

But, with myself, I've proven way beyond any doubt that my strategy works. So the only thing left is my emotional state to implement it. Now I must do the same thing, will myself to endure that uncomfortable feeling, but know that it will pass. The first step is to just accept that you are going to suffer a little bit, and be willing to feel it. But, and the same time, force myself to focus on something else other than the fear. That is the key part. It's not denial. It's very similar, but subtly different. Denial is lying to yourself. It's living a lie. Denial isn't what I'm proposing. What I'm proposing is to focus on a positive end result, and force myself to "know" that the end result will be positive. It's an act of the will. I goes beyond any mental process. I don't know of any other way to describe it other than "faith". But as I stated before, I already have a strategy that I've tested many, many times, and proven it to work way beyond any doubt. So, you must have something that is verifiable to begin with.

[salsaman 10]

I have been through nothing less than pure hell to myself and what was a good retirement account.

 

Stepped away for a while. Went back and found TWO... only TWO types of trades/edges to work on. Studied paper charts for a few more weeks on just those setups. Every trade I maked exact entry point and exit/scale and stop.

 

Then I printed a few hundred charts, assembled them randomly, and used a piece of paper to uncover one bar at a time looking for those setups.

 

Meanwhile, I read 'Trading in the Zone' for probably the 40ith time. I still read a few pages every single day. What is bothering you is a few key things from the book I believe.

 

You are not letting your mind think in probabilities, the fact that you have just as much chance of that trade going up 4 points as it would down 4 points. I think it is especially tough after getting a beat on to let a trade work itself out instead of pulling as soon as a little bit profitable.

 

When you loose, or loose a lot, your mind has not accepted the risk of trading, or putting on a trade. You will loose. It's part of the game. Trading in the zone's most important aspect is to try to rewire your brain to accept losses as part of 'winning'

 

Good luck, I feel your pain.

[max8ion 10]

I personally think that going through all of that is really hell, but on the other hand if we stayed calm and indifferent to the risk and troubles there won't be sense in risking at all, because this fear is essential part of this process. All that we can do is simply to endure!

Good luck to everyone!

[Richie1977 10]

1. check out this website...TRADING PSYCHOLOGY is Psychological Capital They believe that you will always feel emotion, but how you feel/react to it, can be changed...

2. Manage your time daily - spend time away from desk, get some air, time mentally rehearsing trades, see trades go onside and offside and how you will react. Tradng is like a competitve sport, hitting a thousand forehands is exactly the same as hitting a thousand trades.

3. See the uncetainty as a positive emotion, repeat to yourself either out loud as you trade, before you enter trades, or via meditation - "uncertainty" is humouress. Smile as you say the word. But then be serious about the word "certainty". You can only control your entry and exit that is certain. What the market will do will always be uncertain. May sound daft, but your brain doesnt know the difference. If you dont make the conscious choice of changing the feeling of anxiety, it will get worse. You change it by associating the feeling with a smile on your face. Ignoring it is not an option.

4. Meditate, at least once daily. It is as important as reading about the markets, studying charts, and gaining your edge. You have no edge if you cannot execute it...all that time spent studying the past will be worthless, if the moment you enter a trade, you let fear and ansiety take over...

5. Be consistent with all of the above, dont let one day slip when you dont do it

[mathew.luk 10]

NLP,, gez sorry to be a hater but I think it is just a scam for weaker minds... sure those "salesman mentor" got a few mind tricks or "advices" down their sleeves to help you give through a few mental blocks, but deep down... are they the real deal? I'll say NO!

 

It is normal to have fear when you trade. However, if the fear is so great that it affects your judgment, analysis and execution then the loss is way too big for you to swallow. You should reduce your position size or don't even trade at all.

 

I know I am being blunt, you can use other things to convince yourself it is otherwise but losing is part of trading. If you have back-tested your "edge" and you are committed to be consistent with your trade execution, then the fear should gradually lower as your trade. (but not disappear, disappear this is a bad sign for me personally)

[djohnsonhot 10]

VERY interesting post. The key to overcoming fear is to get your arms around your $ risk tolerance. When I started, I was only willing to give up 4 ticks. Then that moved to six ticks (ES) and then finally 8 ticks and I still was getting stopped out all the time.

 

Now, I have NO hard stops. Enter; watch; apply my arsenal of indicators (I do NOT mean MACD, but rather the Price Action breaks, support/Res levels, Pre-session MARKING UP of my primary chart, the 30-minute, and so on.). I trade ONLY long term charts now. 30 minutes seems about right for me. I will not go into how I trade but 30-minutes is support by pre-indications from the 2, 5 and 15 minute charts.

 

Finally, I got better at drawing consolidation boxes and exhaustion areas based on range and precise reading of Candles. I use standard candles, not Heiken-Ashi's. I tried those.

 

I look for RANGE bars going back two days. I respect those ranges and mark their mid-points...they can be coupled together to show you AREAS of anticipated Price Action based on their ranges supported by VOLUME. VWAP, MP and so on play into the decisions but I cannot trade JUST those indications but rather the overall picture.

 

Then, pre-session and the night before, I mark up the entire chart with TEXT pointing at support and resistance lines and then trade those areas (RESPECT THEM, is the best way to put it).

 

I then enter and my mental stop is 4 points. I will sweep it up or down based on WHEN my best trade entry is broken. That can be two to three touches to a price level and then if it breaks, against me, I will stop out as fast as I can...normally that level is points away, not ticks away.

 

There you go.