Wednesday, November 30, 2011
Tuesday, November 29, 2011
Monday, November 28, 2011
Thursday, November 24, 2011
Tuesday, November 22, 2011
Monday, November 21, 2011
My Worst Ever Trading Day
It's a rather interesting experience to share about myself: At my worst.
2008 had been a great year of trading. Still a newbie, I had limited myself to 1 or 2 contract live trading. Before this day, I had doubled my little account. Doubled it. I was doing great, despite noticing a troubling pattern: periodic "blow up days" where a couple of innocent stops would turn into 5 or 6 stops. And my loss limits would be tripled. My loss limits at the time were $400 and the worst daily losses were about $1,200: A 3 to 1 blow up day would happen 2-4 times every couple of months.
But I took it to a whole new level on this day. A true climatic experience. I can still remember the haze while hitting the buy button over and over. Truly, when intense frustration takes over, combined with a DESPERATE NEED to gain psychological distance from losses, trading is a venue where it's quite easy to engage in highly destructive behaviors -- and literally not even realize ANY consequences until the damage has been done.
It took me over two years, probably longer, to get over this extreme $2700 loss day. The damage to my self efficacy was so devastating. It was not the money. The money was relatively small. It was the fact that I was out of total control. Until I got myself to a point where I could be very certain that I'd not do this again, there was no way to size up my trading. The numbers get serious with 5 or 10 contracts.
If I had upped my size substantially before this climatic loss day, after such a good winning streak, I'd have most likely blown my entire account out.
To this day, everyday, my primary brief therapy goal is to maintain loss limits. Still, even 3 years later I've struggled with breaching limits in 2011, although very mildly so. Each day I turn on the screens, there is fear of what's possible. The fear of getting lost in a haze and doing wild, uncontrollable trading.
Like Dr. Brett always has preached: One of the the WORST things that you can ever do to yourself is to experience out-sized losses or gains. The trauma on the mind can, and probably will, set you back for years.
2008 had been a great year of trading. Still a newbie, I had limited myself to 1 or 2 contract live trading. Before this day, I had doubled my little account. Doubled it. I was doing great, despite noticing a troubling pattern: periodic "blow up days" where a couple of innocent stops would turn into 5 or 6 stops. And my loss limits would be tripled. My loss limits at the time were $400 and the worst daily losses were about $1,200: A 3 to 1 blow up day would happen 2-4 times every couple of months.
But I took it to a whole new level on this day. A true climatic experience. I can still remember the haze while hitting the buy button over and over. Truly, when intense frustration takes over, combined with a DESPERATE NEED to gain psychological distance from losses, trading is a venue where it's quite easy to engage in highly destructive behaviors -- and literally not even realize ANY consequences until the damage has been done.
It took me over two years, probably longer, to get over this extreme $2700 loss day. The damage to my self efficacy was so devastating. It was not the money. The money was relatively small. It was the fact that I was out of total control. Until I got myself to a point where I could be very certain that I'd not do this again, there was no way to size up my trading. The numbers get serious with 5 or 10 contracts.
If I had upped my size substantially before this climatic loss day, after such a good winning streak, I'd have most likely blown my entire account out.
To this day, everyday, my primary brief therapy goal is to maintain loss limits. Still, even 3 years later I've struggled with breaching limits in 2011, although very mildly so. Each day I turn on the screens, there is fear of what's possible. The fear of getting lost in a haze and doing wild, uncontrollable trading.
Like Dr. Brett always has preached: One of the the WORST things that you can ever do to yourself is to experience out-sized losses or gains. The trauma on the mind can, and probably will, set you back for years.
Saturday, November 19, 2011
Thursday, November 17, 2011
Wednesday, November 16, 2011
Tuesday, November 15, 2011
Monday, November 14, 2011
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