My Psyche, The Last Frontier
November 8th, 2018 | 4 minute read (Repost from We The Market)
A while back I wrote about No Mystery. Actually, that was a little premature. Let me explain. By definition, doing the same thing repeatedly and expecting different results is insanity. Yet, I successfully proved I am crazy. I have a pre-market journal that I sometimes use. I wrote, “three days in a row you have fought the trend. Don’t do that.” Pretty much day 4 and 5 I repeated this non-sense.
Last I checked I am not crazy. My actions would argue other wise. I wanted to dig deeper and find out why I am behaving this way? Why am I not following my rules? While you may know I am a fan of Brett Steenbarger, I recently came across another counselor that I like. Rande Howell’s words struck a chord with me. He hooked me when not only did he say that past successful people have a difficult time transitioning to stock trading. I have read this statement a few times before in other articles, but no one explained it to me. Rande explains this phenomenon and he has also counseled many traders with similar stories that a person can relate with.
The very short description of why I repeat my mistakes, that would not give justice to Rande’s teaching, is, you have emotional hijacking destroying your trading. I also learned that both negative and positive emotions can interfere with you thinking clearly. I have, on numerous occasions, been positive in the first 30 minutes only to finish the day negative. Who would do that in their right mind? This example was because I did well in the morning and had euphoria cloud my thought process. I started taking trades that did not line up with my setup criteria. He teaches in his book to identify emotional ques and then make a plan to regulate your emotions. You can never eliminate emotions. Learn to work with them. You can get Rande’s Free ebook here. I also recommend his “Mindful Trading” book.
Whether you get a dopamine high or angry you need to be on alert with your body and identify early on when this is happening. Do breathing exercises and look at images that brings you to a relaxed state. You will start thinking more clearly. I always enjoy when I find other articles supporting each other. While on YouTube I watched “Why Practicing Can Help with Emotional Regulation” At time point 0:56 he says “Being Mad Makes You Dumb”. I get frustrated and out the door goes my discipline. I could not answer my friend Chad who once said “You are the most disciplined person I know. How come you can’t follow your rules”? Now I know. Now starts the journey and last frontier to explore. Looking forward to consistent profits.