Every single trader experiences fear. Some traders feel it all the time, some only experience it early on then get rid of it totally, and some feel it only at certain moments like I do. I generally feel fear only at the moment when I get into the trade or just before entering the trade. I don’t like this feeling. But I’m very curious about why I don’t feel fear before I get out of the trade or before I should decide to get out of the trade. I’m starting to see that I’m missing a piece of the puzzle. I feel like I should feel fear before getting out of the trade or just before I should get out of the trade. Let me explain why that is, both to myself and to you my readers.
I’m afraid when I’m taking a trade because of the risk of losing, but I do not feel it when I’m getting out of the trade. When I’m out of the trade on the stop loss I do not feel fear either. When I’m stopped on the green side of my trade, but not on the target I’m not afraid. When I’m stopped at break even I still don’t feel fear. But I should. Why? How many times has your trade been very green, and you, based on your rules and plan could only move the stop to b/e and then you were stopped? I was in a situation like this many times, but if I would have felt fear and realized what was going on, I probably would have gotten myself out of the trade, because of the fear at the green side. How many of you have been in a situation where you took a trade against the rules, but you didn’t get out of it because it was a little green, and then all of a sudden you were stopped? This was a moment when you should have felt fear and gotten yourself out, but you did not. Same here, I’ve done the same many times. Why?
"When we feel nervous in a trade or feel nervous about putting on a trade, it’s important to know whether our response is one of fear or one of anxiety."*
"Fear is the friend of trading when it points to genuine sources of danger: a felt discomfort with a trade will often precede conscious recognition of a change in market conditions."*
Feeling fear is very important and very helpful in my opinion. If I trade with no emotions I don’t know what I’m doing. We all have emotions in our trading, the point is to know how to use them. Nobody knows if a trade is going to work or not, NOBODY. The not knowing shouldn’t make you nervous because that’s just a given, but being active, being awake, being in the zone, that means experiencing emotions like fear. If during the trade I follow the market and my rules and plan, then thanks to my feelings I can trade to the best of my ability.
"When you are your own trading coach, your goal is not to eliminate or even minimize emotion."*
So what are we to do in order to start feeling fear as a tool, during the trade? How do we feel it and use it to be sure about still being in this trade or not? When we drive a car and any kind of light on the dashboard goes on, we don’t ignore it. Being awake and in the zone during the trade will allow us to see figurative lights blinking on the screen to keep us feeling fear when necessary, to help us get out of the trade when it’s right. This is what I’m missing. I have rules for when to get into the trade and when not to take a trade, but I don’t have rules, feelings, for when to see the warning signs. I need to hone my fear instinct to recognize that “Voila!” moment where I just notice something in front of me and it can trigger my need to reexamine my trade.
"When nervousness hits, the first thing you want to do is simply acknowledge that fact."*
"Fear is a warning light; not an automatic guide to action. It is our mind and body’s way of saying, “Something doesn't look right.”"*
I always work on talk-aloud mode, but that’s before I take a trade. Now, I think it’s time to be more fearful and look for "questions" that might lead me to get off the trade. I need to keep talking to myself and voice the “why” observations in order to recognize them as potential scary scenarios. Fear can be very helpful if it’s used properly, as long as it’s not turned into anxiety.
"You can use your fear as a cue to examine your trade more deeply and adjust your confidence in the idea, up or down."*
"If you can use fear in this way, even negative emotions can become trading tools and even friends."*
"Confidence doesn't come from an absence of fear; it comes from knowing you can perform your best in the face of stress and uncertainty."*
I’m afraid when I’m taking a trade because of the risk of losing, but I do not feel it when I’m getting out of the trade. When I’m out of the trade on the stop loss I do not feel fear either. When I’m stopped on the green side of my trade, but not on the target I’m not afraid. When I’m stopped at break even I still don’t feel fear. But I should. Why? How many times has your trade been very green, and you, based on your rules and plan could only move the stop to b/e and then you were stopped? I was in a situation like this many times, but if I would have felt fear and realized what was going on, I probably would have gotten myself out of the trade, because of the fear at the green side. How many of you have been in a situation where you took a trade against the rules, but you didn’t get out of it because it was a little green, and then all of a sudden you were stopped? This was a moment when you should have felt fear and gotten yourself out, but you did not. Same here, I’ve done the same many times. Why?
"When we feel nervous in a trade or feel nervous about putting on a trade, it’s important to know whether our response is one of fear or one of anxiety."*
"Fear is the friend of trading when it points to genuine sources of danger: a felt discomfort with a trade will often precede conscious recognition of a change in market conditions."*
Feeling fear is very important and very helpful in my opinion. If I trade with no emotions I don’t know what I’m doing. We all have emotions in our trading, the point is to know how to use them. Nobody knows if a trade is going to work or not, NOBODY. The not knowing shouldn’t make you nervous because that’s just a given, but being active, being awake, being in the zone, that means experiencing emotions like fear. If during the trade I follow the market and my rules and plan, then thanks to my feelings I can trade to the best of my ability.
"When you are your own trading coach, your goal is not to eliminate or even minimize emotion."*
So what are we to do in order to start feeling fear as a tool, during the trade? How do we feel it and use it to be sure about still being in this trade or not? When we drive a car and any kind of light on the dashboard goes on, we don’t ignore it. Being awake and in the zone during the trade will allow us to see figurative lights blinking on the screen to keep us feeling fear when necessary, to help us get out of the trade when it’s right. This is what I’m missing. I have rules for when to get into the trade and when not to take a trade, but I don’t have rules, feelings, for when to see the warning signs. I need to hone my fear instinct to recognize that “Voila!” moment where I just notice something in front of me and it can trigger my need to reexamine my trade.
"When nervousness hits, the first thing you want to do is simply acknowledge that fact."*
"Fear is a warning light; not an automatic guide to action. It is our mind and body’s way of saying, “Something doesn't look right.”"*
I always work on talk-aloud mode, but that’s before I take a trade. Now, I think it’s time to be more fearful and look for "questions" that might lead me to get off the trade. I need to keep talking to myself and voice the “why” observations in order to recognize them as potential scary scenarios. Fear can be very helpful if it’s used properly, as long as it’s not turned into anxiety.
"You can use your fear as a cue to examine your trade more deeply and adjust your confidence in the idea, up or down."*
"If you can use fear in this way, even negative emotions can become trading tools and even friends."*
"Confidence doesn't come from an absence of fear; it comes from knowing you can perform your best in the face of stress and uncertainty."*
*LESSON 17 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.
No comments:
Post a Comment