Controlling The Trading Psychology Tailspin

Consider: each time a Trading psychology tailspin occurs AND you go out of control – the quicker the next spiral is going to occur, and the faster you will go out of control when it happens. This is going to continue, until trading becomes too painful, and you will not be willing to trade any longer.

Consider: it is better to work through the emotions instead of quitting. Quitting is too easy, and this provides no solution or aid in preventing this from coming back and intensifying each time you have a rough period. Also, you have lost the ability to ‘count’ on yourself when you need to do so the most. To control a Trading psychology tailspin, before you go out of control, is a tremendous win in and of itself. Do this, and get your trading back on track, and you will have made gains the value of which you can’t imagine, as you will know that you may have losing periods BUT you can trust yourself to remain in control, and not magnify the damage.

In light of this, take what you believe to be your key trading issues, write them on an index card, and stick them on to your monitor. The objective is realization and awareness, thus making these issues available to your conscious as a reminder, instead of only available to your subconscious as a problem. As you make your notes BE SURE that you are writing short non-judgmental notes – DON’T let the ‘solution’ make the ‘problem’ worse!

For instance, consider the combination of a build of emotions coming from consecutive losses which are also occurring during congestion – write notes similar to these on your card:

  • a build up in emotion may come from a series of quick consecutive losses
  • quick consecutive losses often come from trading inside of congestion
  • are your losses ‘base’ congestion method trades OR are you overtrading
  • there is nothing wrong with ‘base’ method trade loses
  • your trading results are fine when you ‘base’ method trade

Now consider the same situation BUT different notes:

  • don’t be a stupid idiot and overtrade congestion like you always do
  • you are going to lose your ass and end up with another losing day like usual
  • you do this same crap every day and the same thing happens
  • you have no reason to even trade if this is all that you are going to do

Remain Neutral

Remain neutral – another note for your index cards.

Another approach may be to write notes that include the things you can remember yourself doing or feeling as you transition from acceptable emotion to Trading psychology spiraling, for instance: shortness of breath – sweating – squirming in your chair – unable to sit down. AND as the spiraling becomes more intense: cussing – screaming – throwing things – breaking things. UNTIL the spiraling is out of control: panic – desperation. Clearly, there is a whole list of physical responses to uncomfortable emotional situations; realizing them as they occur may be a step in controlling them before they ‘take-over’ and lead to spiraling.

Be Aware

I want to know the potential for the spiraling situation. It is VERY important to acknowledge that you have emotions, and not try to ignore them or hide from them as a solution to the problem OR because you perceive them to be a sign of weakness. This actually will just make the situation worse. You are human – humans have emotions – emotions become more intense in more difficult situations. So, I don’t need to know how I am going to have responded as I go out of control. I do need to know, and have something to remember, and/or think about, that can keep this from happening – that can keep me as neutral as possible, in what would be the more difficult trading periods – something that will ‘push’ me back to trading method AND ‘away’ from Trading psychology.

So… What does trader “C” do?

Trader “C” is the trader who remains the most neutral in winning and losing; the most neutral in all situations. It’s this neutrality that becomes essential in keeping the emotions from becoming a Trading psychology tailspin, as the trader can ‘accurately’ evaluate their losses in terms of method. This trader will only trade their most ‘base’ method setups after any difficult period AND IF these lose, so be it, that possibility has already been accepted. Go on to the next method trade – it probably will be a winner.

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