Face Your Emotions Early and You’ll Gain More From It

Phobia DogNot too long ago, I made an amateurish trading mistake (Yes, I’m a human being too and I do make mistakes). Unfortunately for me, the trade got stopped out and my losses were much more significant than my normal trades.

Long story short, the incident was damaging both for my financial account as well as my emotional account.

But being an educator myself, the first question I asked was, “What would you tell your readers if this happened to them?” The answer was simple – (1) Turn your wounds into Wisdom (see related article) and (2) more importantly, Do It As Soon As Possible.

And that is the topic of my article today. We need to acknowledge our mistake as soon as possible and, more importantly, we need to learn from it. In fact, Traders who have ego issues will find this very difficult and, hence, it is sometimes shown that women are better traders than men.

Suppressing Emotions only Sinks you Deeper

The key to a good recovery is a quick recovery.

Very often, when traders make mistakes, they tend to linger over it and not do anything about it i.e. they suppress their emotions and hope it’ll go away later. For example, some traders end the month with a large drawdowns and they avoid reviewing their trade journal as they “fear” that it might hurt. So even avoid having a trade journal for the same reasons.

This, in my opinion, is the worst thing to do.

Human emotions are very peculiar and weird. Just because you park it aside and stop thinking about it doesn’t mean it’s gone. In fact, as soon as you revisit the issue, those nasty emotions start coming back.

The Worst is Yet To Come

Every time you suppress your emotions, you move bits of the bad experience into your sub-conscious mind. And every time you revisit that particular trade or chart, you’ll only make another dent in your sub-conscious space.

My point is that, for example, if you delay the review of your bad trades for 5 days, you’ll end up thinking about the trade for the next 5 days (though only briefly), assuming you open your charts and flip through your recent trades, and that’s pretty much a dent that is 5 times as bad.

I’m no psychologist but, hey, isn’t that how phobia for dogs (or anything similar) starts? See article on Phobia in Wikipedia. People with that phobia probably had only one bad experience and they freak out every time they see a dog. Hence, the outcome is that (1) they’ll never realise that not all dog bites and (2) that nasty emotion is permanently scarred in the sub-conscious mind.

Well, in my opinion, this is probably why Amateur traders stop trading permanently after blowing up their trading accounts. They have a Phobia from Trading and, in their view, trading does not work.

Acknowledge, Accept and Grow

If you have had a bad trading experience and your state-of-mind have been dented, you should stop trading immediately. Yes, you might miss a good trade but trading in the wrong state-of-mind is worse than missing a good trade. Plus, always remember Habit No. 11 of Wealthy Traders – the market is still be open tomorrow.

Instead, try to find out the reason for the bad results. Is the root of the problem due to:

  • Breaking of Trading Rules?
  • Bad Trading Rules?
  • Emotions? And so on.

Once you’ve identified the root, then, work on towards a new solution.

Turn the Wisdom Sub-conscious

Here’s a powerful thought.

Instead of focusing on the negative results, you can now start focusing on the positive outcome as soon as you find a solution i.e. the Wisdom you gained from the negative results.

As mentioned above, if you hold on to negative emotions for too long, it’ll sink you. The opposite is also true. If you hold on to positive emotions for a long time, it’ll raise you.

 

Conclusion

Facing you negative emotions and learning from your mistakes as soon as possible is actually a powerful way to recover quickly. The faster you start focusing on the Wisdom, the quicker you’ll recover from your Wound. In fact, the more you do it, the more it affects how you trade in the future.

So do not postpone your trading reviews. If you’ve set yourself for a monthly review, than Do It On Time. Similarly, if you’ve set yourself a weekly review, just do it.

 

Thank you once again for reading. Hope you’ve gained something from this article.

Happy trading!!

 

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