What should NOT a trader tell himself when he loses money?
Emotional pain is one of the most common ways our brain reacts to loss. And it doesn't matter to it exactly what is lost. We basically react to loss much more emotionally than we do to gain. That's how our brain is programmed.
In this article I want to consider several variants of internal dialogues that traders have with themselves when they lose money in the market. The information is rather about how not to do and what not to say to yourself in case of loss in order not to intensify the painful effect and negative feelings associated with it.
The bad question is, "Why is this happening to me?
This question makes you mentally run in circles. You begin to go over all your life problems one by one in your head. You pull past troubles out of a dusty memory bag. You try to find the reason why all the misfortunes of the world are falling on you. What have you done that makes you have to suffer all the time?
Naturally, this only increases the negative reaction of your brain. You, as they say, "loop" the situation. After all, if something is wrong with you, it means that until you fix it, misfortunes and mishaps will fall on your poor head. You inevitably become a victim. This reinforces the idea that your life is like a continuous stream of suffering.
In addition, this leads to the fact that you lose motivation. After all, what's the point of trading if you're not going to succeed anyway? Each subsequent trade is more and more difficult for you. There is a feeling of meaninglessness and hopelessness of what is happening.
A good question is, "How can I improve my trading?"
When you change the vector of the issue, your condition changes. You shift your center of gravity from what you can't change (your perceived "badness") to what you can change. You concentrate your attention on real, doable tasks. This allows you to set and formulate goals, write an implementation plan, and work toward those goals.
No matter how much you feel sorry for yourself, the market will do its job. It doesn't care about you. He's not going to feel sorry for you or listen to you whine. It is not because it is a harsh and soulless monster who wants to cause you pain and suffering. All the suffering you cause yourself. The market doesn't care about you. It doesn't even know whether you exist or not.
The only thing you can change is your behavior, your reactions and your actions while trading. That will be your best response to a loss. And yes, in this case, that is the answer.
It is important to understand that the victim's psychology and behavior will only exacerbate your pain, which will lead you to unproductive actions in trade. Pain gives rise to resentment, resentment gives rise to the desire for revenge, to punish the offender. How it ends in the market, I think you know very well.
The bad question is, "Why am I not learning anything?"
If your losses are caused by a mistake or a series of mistakes, very often you say to yourself something like this: "Why doesn't life teach me anything, how many times can I step on the same rake? And then, as a natural continuation of these thoughts, you start blaming yourself for being so stupid, foolish, worthless, useless, incapable of anything.
Then, even worse, you start comparing yourself to successful traders. Why is it that they are good at everything, while I have never learned anything? This all leads to a quite logical conclusion: you are a mediocrity who will never achieve anything in life. After all, in promising yourself never to do that again, you keep repeating the same mistakes over and over again. What is this but the behavior of a total mediocrity?
The trader's way: from a beginner to three lost deposits and a successful strategy
A good question is, "What can I learn?"
Every mistake is an experience. But how much and what that experience teaches us depends on how much we ourselves are willing to learn. It is important to remember a few simple things.
First, it's very hard for you to change on your own, without outside help, your habitual behavioral patterns and reactions. These reactions have been formed in you for decades, starting at birth. And it is very, very difficult to change them. What's more, very few people actually manage to realize that they exist.
Secondly, when you look at other, as you think, more successful traders, you have no idea what's behind this facade of success: what path this person took, what it cost him, in the end, what he paid for this success. After all, the maxim that nothing in our lives is free did not emerge from nothing.
Third, there are no experts in trading who can claim the laurels of "the truth in the last instance. The market will teach us all our lives. Some of us learn faster, some slower, and some cannot learn trading at all. Never. And this is absolutely normal and does not say anything about a person that he is mentally handicapped. Remember your school years and your classmates. We are all different.
We all come into the marketplace with our own set of positive and negative qualities, strengths and weaknesses, whether it's beliefs we hold or our innate genetic predispositions. We are not able to change this overnight. If you learn slower than others, it's not your fault or theirs. It's the way it's determined. You just need a little more time. That's all.
You will continue to make mistakes until eventually you master the profession. Get over it and learn to see your mistakes as stepping stones to success.
The bad question is, "Why am I so miserable?"
Or "it's killing me," "I can't take it anymore," "I can't handle it," "I can't adapt to the market environment," and so on.
Whether you are strong or weak is up to you. The same goes for how happy you are. If you think happiness is about money, I have some bad news for you. Throw out all the popular memes about how crying in a Mercedes is better than riding a bicycle. Trust my impressive experience. Many times I have met people who would trade all their possessions "without looking" for the health of themselves or their loved ones. Everything is always a matter of comparison.
The market will not make you happy if inside, in your own head, you remain unhappy. There is no external force that can give you happiness. And there are no people like that either. No matter what you think or think about it.
The reality is that you cannot make the market make you happy. Even if that is where you see your happiness. You simply cannot control it. The only thing you can control is yourself.
A good question is, "How can I become more flexible in my expectations?"
As soon as you open a trade, give up expectation. I know it sounds strange. But the less you expect from the result, the less the emotional response will be. And in this case, it does not matter whether the trade will be profitable or unprofitable. After all, in both cases you waste your emotions, and therefore emotionally and psychologically exhaust your body.
I don't mean to say that having fun or being disappointed is a bad thing. Not at all. But shifting the focus of attention from the result of the trade to the process itself would be much more correct. It will allow you to distance yourself emotionally from the outcome of the trade. When the result is not a reason for an emotional reaction, positive or negative, but a testimony and confirmation of the rightness or wrongness of actions.
This is already a completely different perception of the result. And if you also include the two previous questions "How can I improve my trading?" and "What can I learn? And you will experience positive emotions from the quality of your work. If this quality does not satisfy you, then you will look for growth areas. What conclusions you can draw and how to improve your work.
Suffering, self-deprecation, and worrying will be replaced by normal workflow.
Trading is not a place for suffering
But trading is also not a place to give up your emotions, feelings and experiences. You are a living person.
You must learn to let yourself experience your emotions in their entirety. Not suppressing, judging, or rejecting them. But it's not your emotions that should guide your actions and deeds, it's your common sense and reason.
Every good trader must have this ability. And it can and should be developed in you. The first step is at least to start being interested in what is going on inside your own head. Shift your attention from the external to the internal. You'll be surprised at how much it's interesting!