My Story

I understand from personal experience the challenges of one’s mind when trading. I’ve had issues with being impulsive when trading. According to the  Tharp Trader Test  (trader personality test) I took, I am a “spontaneous trader,” i.e. impulsive trader, one of the most challenging categories.

I remember feeling envious of a trader friend who was a cautious trades. She erred on the other side—having a hard time pulling the trigger. She complained about missing good trades, being too scared to get in.

Being cautious is a benefit for a trader and their account’s bottom line.  It is a safer problem to struggle with than being impulsive. If you don’t lose your money, you can still be in the game.

I lost Money Anyway

Even after attending a quality trading school and being taught how to not lose money, I still did. I took the initial course three times, and even took advanced courses. I heard teachers describe how they had lost 100k or 50%–75 % of their accounts when they started.

They told us what to do so that didn’t happen to us. Use stops. Use risk management. Only risk 1% of your account per trade. Let the winners run. Don’t overtrade. . . You know the drill.

And still, I didn’t do as I was told, and I lost money. I thought I knew what the market would do. I was stubborn.

There were days my trading was out of control. I am a bit ashamed to say, a few days I took 50 trades total on the ES (the S&P E-mini–at 5$ per contract, that is $250 just in commissions!) My plan said five trades maximum. On my worst day, I took 90 trades! These days for me felt so out of control. As I traded, I stopped caring about the losses I was incurring. Trading had turned into video gaming for me, without any bearing in reality. The result was a sick to my stomach feeling, and fear to trade the next day.

I was left wondering how I would finally get “control” over my trading? . . .I even went to a gamblers anonymous meeting one afternoon!

Why Don’t We Follow Our Rules?

Why didn’t I listen to my teachers? Why was it so hard for me to follow my plan? Can anyone relate?

This question needs to be understood, for all of us. If one can’t follow the rules in this game, the game will be over! Following the rules means doing what you have been taught. It means having a trading plan and sticking to the plan.

I learned, I didn’t follow the rules because something stronger than the rules was driving my actions.

We have heard how fear and greed grab us and control our actions. These emotions can take over our best intentions to follow rules. Additionally, add our own childhood experiences and resulting beliefs, and there can be a volcanic force operating under the surface!

Core Beliefs from Childhood

What are your core beliefs? Have you asked yourself? How can you find out?

One way is to start journaling your trades. Write why you got in and out. Did you follow your rules, if not, why not? How did you feel during the trade?  As I journaled my trades, I was able to uncover some of the reasons for my impulsive actions.

Recently, I heard my teacher say, “if you had a traumatic experience as a child, you are about to relive it trading, whether you know it or not.”  Even if you had a great childhood, you can have doubt, beliefs, opinions, and so forth that affect your trading. Trading is different from most professions. It requires that you face and know yourself.

Freeing the Mind

The key to success then, is understanding and healing the mind. When your mind is free, you can much more easily follow your rules. Your mind is no longer hijacked by old stuff operating covertly beneath the surface. Whether your issue is impulsiveness, over-analyzing,  playing too small, being “cheap”, or whatever it is, healing comes from first understanding.

What will you do when faced with your trading demon? I almost quit trading. (Some family members were 100% in favor of me doing just that!) Instead, I decided to heal this because I wanted to trade.

For me, through a mixture of working with a great therapist, getting coaching, and tightening my trading plan, I finally got onto the path for trading success. The process focused on “inner child” work, helping my “little girl” heal and grow up.

It turns out, it was she who was doing most of the trading. Can you imagine letting your 5-year-old child push the buttons on your live trading account?

Do the Work

If you are struggling with discipline challenges in your trading, I recommend you start journaling your trades (even if you have resistance to this). Hire professional help as needed, and see if you can’t discover what is going that is keeping you from your trading goal.

Do what it takes now to work out these issues. It may seem expensive, time-consuming, scary, or hard, but the alternative is harder and more painful. A few great books might be helpful as well. These are my favorites:

  • Trading in the Zone by Mark Douglas
  • The Daily Trading Coach:101 Lessons for Becoming Your Own Trading Psychologist by Brett N. Steenbarger
  • Enhancing Trader Performance: Proven Strategies From the Cutting Edge of Trading Psychology also by Brett N. Steenbarger

The best athletes have great coaches and a support team. Consider doing the same for yourself.

Wishing you enlightened trading,

Andrea Wylan

http://awylan.com/

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