The tendency to control self-destruction
In his lifetime, many people still make mistake at the age of 60 that is made in his 20. Some are very successful in one area, but in other areas are full of internal conflicts. Very few can learn from setbacks. You need to understand the tendency of self-destruction and stop blaming others or luck for your loss. You must take all the responsibilities and start taking transaction log—record the process of each transaction, the reason for entering and playing. Evaluate the repetitive patterns of success and failure. If you can't learn from experience, you will have to repeat the same mistakes.
You need to open a psychological safety net, just like a climber needs a survival device. I found the principle of “Alcohol Abstinence support team” to be very helpful. In addition, strict fund management can also provide the function of safety net. If you want to solve the transaction problem through psychotherapy, please find a competent psychologist who knows how to trade. During treatment, the ultimate responsibility remains with you, you should closely monitor progress and development. I often tell my patients that if there is no obvious change within a month, there is obviously a problem with the treatment. If there is no progress within two months, you should look for another psychologist.
Your feelings will immediately affect the net worth of your account. You may have the best trading system, but if you feel scared, arrogant or annoyed, it will definitely affect your account. When you become aware of the intoxication or fear of a gambler, stop trading immediately. As a trader, success or failure depends on how you control your emotions. When you trade, you are fighting the world's first-class mind. The wrestling arena is slightly tilted and you are at a disadvantage. If you allow emotions to interfere with trading, this fight is over. You must take all your responsibilities for every transaction you make. The trade starts with your entry decision and ends with your decision to leave. An ideal trading system is not enough. Although there is a first-rate trading system, many traders are still washed out by the market because they are psychologically not prepared to win.
Violate established rules
The market will provide unlimited temptations, just like walking through the gold treasure house or the king's harem; the market will tease you, raise your greedy desire to pursue more profit, and also raise the fear of worrying about losing the existing gains. These emotions will obscure your judgment of opportunity and danger.
After a series of profit-making, most amateur traders are very impressed with their trading talents. This is indeed a feeling of self-satisfied. You believe that your realm is not restricted by any norms, and you can continue to succeed against established rules. As a result, traders began to ignore the rules they set and entered the self-destruction mode. Traders learn some knowledge, make progress, then emotions emerge and they destroy themselves. Most traders immediately returned their “profits” to the market. A truly successful trader has the ability to accumulate net worth.
The trading process should be as objective as possible, and the transaction log needs to be attached with a trend chart before and after the transaction. List all transaction data, including commission and slip price margin, and make strict rules of money management. The seriousness of your self-analysis should at least be equal to your market analysis. When I first started learning about trading, I read as much as possible about all the books on trading psychology. The advice provided by many authors is reasonable. Some emphasize discipline: "You can't let the market shake you, and you can't make decisions in the market. Make plan before trading and trade according to the plan." Others emphasize flexibility: “You cannot enter with prejudice and you should adjust according to the market conditions." Some experts recommend isolation----not listening to economic news, not reading The Wall Street Journal, not listening to the opinions of other traders---only you and the market. Other experts advocate maintaining an open mind and trying to communicate with other traders to absorb new ideas. Every suggestion seems to make sense, but they are contradictory. I continue to read, trade, and focus on the development of the system. I also continue to work in the outpatient business of psychotherapy. I never thought that these two areas would be related—until I suddenly realized a concept that changed my trading method, which came from psychopathology.
The concept of changing trading patterns
Like most psychiatrists, I have some alcoholic patients and I am a consultant to a large drug rehabilitation center. Soon after, I discovered that after the alcoholics and drug addicts participated in the “helping society” group, the recovery effect was far better than in the traditional psychotherapy environment.
Psychotherapy, medications, expensive hospital and clinic equipment, while they can keep alcoholics sober, it's hard to keep them wild awake. Most alcoholics are quickly addicted to alcohol, and if they are actively involved in the Alcoholics Anonymous (AA) or other similar group, the chances of recovery will be much greater.
When I found out that AA members had a high treatment rate, I became a loyal follower of the Alcoholics Association. I started sending alcoholic patients to AA or other similar groups, such as ACOA. Now, if a patient with alcohol problems comes to me for treatment, I insist that he also attends the AA gathering. I told him that if you don't do this, it will be a waste of our time and his money. One night many years ago, I went to a friend's office and invited him to a party in industry. There were still two hours from the start of the party. My friend asked me: "Do you want to go to a movie or to an AA party with me?" Although I have sent many patients to AA, I have not participated in this kind of trade-off because I have no problem with alcohol abuse. I have this opportunity in time to have a new experience.
The meeting place was the local “Youth Club”. In a simple room, there were about a dozen men and a few women sitting in folding chairs. The party lasts nearly an hour and I was very surprised to find that they seemed to be talking my trading situation! They talk about alcohol, but if they change “alcohol” to “loss”, their conversations are entirely applicable to me. During that period, my net worth in account was still fluctuating. When I left the “Youth Club,” I knew that my way of dealing with losses should be like AA handling alcohol.