#1 (Wed, April 1): There surely can’t be anything worse in trading, than setting up a trade… entering it…. but then getting psyched out to close it with a small loss… minutes before it drops 60 pts and does exactly what you forecast. Like shorting YM at 7706. (Always enjoy your blogs)
ME: Would you like me to post this to the blog?
#2 (Later, April 1): Would it need to include me yelling and beating the steering wheel of my truck as I drove away post 4:00 close?
ME: It would be more interesting if it did
#3 (Even later, April 1): Sure, I actually did that after I emailed you… LOL. But the reason I continued with it, was your teaching on “verbalizing the emotion”. I consciously remember thinking that…
Point being? Counter-intuitively and certainly counter pop psychology is the power of being totally aware of what emotions are occurring. Putting them into words serves as the best risk management tool for derailing impulsive trades which are born out of acting out feelings that aren’t so conscious or are being purposely “controlled”.
To the Tpsyches way of unconventional thinking, this is the advanced trader psychology of managing psychological capital as carefully, if not more carefully, that you manage your cash capital. Addressing the first automatically takes care of the second.