As of 12/05/2024
Indus: 44,766 -248.33 -0.6%
Trans: 16,976 -190.93 -1.1%
Utils: 1,047 +2.22 +0.2%
Nasdaq: 19,700 -34.86 -0.2%
S&P 500: 6,075 -11.38 -0.2%
|
YTD
+18.8%
+6.8%
+18.8%
+31.2%
+27.4%
|
44,000 or 46,000 by 12/15/2024
17,025 or 18,000 by 12/15/2024
1,025 or 1,100 by 12/15/2024
20,000 or 18,500 by 12/15/2024
6,200 or 5,900 by 12/15/2024
|
As of 12/05/2024
Indus: 44,766 -248.33 -0.6%
Trans: 16,976 -190.93 -1.1%
Utils: 1,047 +2.22 +0.2%
Nasdaq: 19,700 -34.86 -0.2%
S&P 500: 6,075 -11.38 -0.2%
|
YTD
+18.8%
+6.8%
+18.8%
+31.2%
+27.4%
| |
44,000 or 46,000 by 12/15/2024
17,025 or 18,000 by 12/15/2024
1,025 or 1,100 by 12/15/2024
20,000 or 18,500 by 12/15/2024
6,200 or 5,900 by 12/15/2024
| ||
I remembered day trading when I was mad at the world. I said to myself, "I don't care how this turns out!" and took too many trades that I would never have made when I was feeling happier. The same thing happened when I felt as if I could conquer the world. I took every trade believing that I would win big. On some trades I made money and on some I did not. I would have done better by not trading under those circumstances. Perhaps you have similar tales.
Your emotions affect not only you, but others around you. Try this simple experiment. Smile at the next woman you meet (this works better with women). My guess is they will smile back at you. That simple gesture will brighten your day and theirs, too.
The same can be said for times in which you feel upset. It is contagious. If you are tense, you will pass on that feeling to others. If you stick out your tongue at the next person you meet what will happen? They will either stick out their tongue, too, or punch you out. Perhaps I have strayed a bit from the pack on that example, but you understand what I mean.
The emotions you feel affect your trading just like a pretty woman smiling at you in the grocery store affects your emotions. A bad trade may make you angry, and that anger could cause you to make more bad trades, snowballing until you are a stressed out wreck by the time the trading day ends. Strong emotions can cause you to lose focus, making you more likely to ignore trading rules. And that can lead to trading mistakes, perhaps costly ones.
Now we come to Basket Case Bob.
It would be generous to call Basket Case Bob a miser. He takes two-ply toilet paper and separates the layers to make them go farther. He adds his trading winnings to his rainy day fund, a fund from which he never withdraws. "Why not spend some of that money and take a vacation?" He turns white as a sheet and grasps the desk to steady his balance. Just the thought makes him feel as if he is about to pass out.
When his one and only friend, Joe, needed an expensive operation which he could not afford, he dipped into his rainy day fund and paid for Joe's operation.
And then Basket Case Bob turned into Santa Claus. "What do I do next?" he asked with excitement bubbling in his voice as the world smiled at him. He put 10% of his funds into his rainy day fund, 10% he set aside for charity, and 10% went as play money. The other 70% was reinvested in his trading operation.
That act of giving changed both his life and Joe's. Basket Case Bob felt more alive than he had in years.
Are you a case of Basket Case Bob waiting to be discovered?
If emotions rule your trading (such as failing to follow your trading plan, or regularly feeling tense, angry, unloved, unappreciated, or apprehensive), then try these steps.
Now imagine a similar incident occurs in the future. How can you handle it differently?
When you find that emotions are affecting your trading, try one or more of these.
Analyzing trades when emotions dominated your behavior may help you avoid costly mistakes in the future. Learn from the past to avoid making them in the future.
-- Thomas Bulkowski
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