I always thought that my stress was killing me and my trading. It was always the one thing I was afraid of, that was stopping me from trading, but the truth is that it’s not. While reading this book I realized that stress isn't the problem but again rules, mistakes and me. How many stressful situations I've had over these last few years of trading is just impossible to say, to recall. But I do remember why they where stressful for me.
Firstly, I remember myself trading before the news, and I don’t think I need to explain what that did to me and my trades. These trades were never winners, but always very stressful situations. Next, I remember trades at setup that I just saw. Those were made in a rush with no planning, thinking or even realizing what market I was in. And again those were putting me down as well. And last but not least, I remember the trades that were taken because somebody else took them. All my trades that were not planned were the most stressful of all, because in those situations I didn't know what I was doing, and I was getting pissed at another person who took the same trade, or worse, at the market. Now I know that it’s not the stress that’s the problem, but me and my rules. I know I didn't make all of the possible mistakes, but those three were enough to put any trader on the red side or in the hole for a long time.
So what was wrong? Well, my rules weren't specific enough. Since I've found what was wrong, I now have rules like: “Never trade before the news,” or “If you just saw it, don’t do it.” Since then I've had them stuck around my screen and I follow them religiously.
"Stress is a mobilization of mind and body; it can facilitate performance."*
As I've mentioned several times before, I never traded without a stop, but I did make other mistakes; we as trades always do. All those mistakes were causing stress, but on the other hand if not for this stress I would have never known what was wrong. When I started going over all my trades that didn't work and were very stressful, they gave me an idea of what was wrong. It was truly and only my fault that they were losers. So I learned to set up all kinds of rules for myself that continually keep me trading with a lot less stress, but I also learned a valuable lesson in that, stress can be very helpful and I need to be alert when I trade so I can recognize the source of my stress and use it for my further growth.
"Position size limits, trading plans, and stop-loss levels are like snow tires on your vehicle: they may not seem to do a lot for you when things are going well, but they certainly help you deal with adverse conditions."*
Having rules is one thing but following them is a totally different thing. This is where I need stress. I feel alert during setup and I quickly go over my check list. Thanks to my stress I feel like I’m working. I’m doing well because I do check my rules and I make decisions based on those rules, not based on my feelings. Rules are sometimes big like, “Do not trade at all before the news,” but some are smaller like, “Swing size that I can read is a good signal in my setups.” So, having rules is one thing, but checking them every single setup and trade, every single day, is the thing that keeps me on my toes. And again, thanks to stress I know what to do.
"Preparation and familiarity keep stress from becoming distress, because they enhance your sense of control."*
For me, trading was always a lot of work, not because it was hard, but because I wasn't prepared. I now spend many hours doing my homework, sometimes in the morning, but more often in the afternoons, and for the next day I am always prepared and know ahead of time what I will do “if.” When “if” happens I’m ready to check my list and act, and the stress is gone as soon as I check the list. I know what I see and I trade what I see. It’s that simple.
"That doesn't mean repealing stress; it means creating active firewalls between stress and distress. Risk management is one of the best psychological firewalls of all."*
*LESSON 11 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.
Firstly, I remember myself trading before the news, and I don’t think I need to explain what that did to me and my trades. These trades were never winners, but always very stressful situations. Next, I remember trades at setup that I just saw. Those were made in a rush with no planning, thinking or even realizing what market I was in. And again those were putting me down as well. And last but not least, I remember the trades that were taken because somebody else took them. All my trades that were not planned were the most stressful of all, because in those situations I didn't know what I was doing, and I was getting pissed at another person who took the same trade, or worse, at the market. Now I know that it’s not the stress that’s the problem, but me and my rules. I know I didn't make all of the possible mistakes, but those three were enough to put any trader on the red side or in the hole for a long time.
So what was wrong? Well, my rules weren't specific enough. Since I've found what was wrong, I now have rules like: “Never trade before the news,” or “If you just saw it, don’t do it.” Since then I've had them stuck around my screen and I follow them religiously.
"Stress is a mobilization of mind and body; it can facilitate performance."*
As I've mentioned several times before, I never traded without a stop, but I did make other mistakes; we as trades always do. All those mistakes were causing stress, but on the other hand if not for this stress I would have never known what was wrong. When I started going over all my trades that didn't work and were very stressful, they gave me an idea of what was wrong. It was truly and only my fault that they were losers. So I learned to set up all kinds of rules for myself that continually keep me trading with a lot less stress, but I also learned a valuable lesson in that, stress can be very helpful and I need to be alert when I trade so I can recognize the source of my stress and use it for my further growth.
"Position size limits, trading plans, and stop-loss levels are like snow tires on your vehicle: they may not seem to do a lot for you when things are going well, but they certainly help you deal with adverse conditions."*
Having rules is one thing but following them is a totally different thing. This is where I need stress. I feel alert during setup and I quickly go over my check list. Thanks to my stress I feel like I’m working. I’m doing well because I do check my rules and I make decisions based on those rules, not based on my feelings. Rules are sometimes big like, “Do not trade at all before the news,” but some are smaller like, “Swing size that I can read is a good signal in my setups.” So, having rules is one thing, but checking them every single setup and trade, every single day, is the thing that keeps me on my toes. And again, thanks to stress I know what to do.
"Preparation and familiarity keep stress from becoming distress, because they enhance your sense of control."*
For me, trading was always a lot of work, not because it was hard, but because I wasn't prepared. I now spend many hours doing my homework, sometimes in the morning, but more often in the afternoons, and for the next day I am always prepared and know ahead of time what I will do “if.” When “if” happens I’m ready to check my list and act, and the stress is gone as soon as I check the list. I know what I see and I trade what I see. It’s that simple.
"That doesn't mean repealing stress; it means creating active firewalls between stress and distress. Risk management is one of the best psychological firewalls of all."*
*LESSON 11 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.
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