Some Trading Psychology thoughts from last week
Last week we made two trades.
The first one we took 120 points on the Crude Oil long and the second trade Long Silver. Because of the profits from the Crude Oil trade, I felt comfortable giving the silver trade more room for a chance of a greater move. Unfortunately, the trade ended up as a scratch trade (even though it was in profit at one stage). I found that by having a profit already in the bag, it gives you the buffer to be able to give following trades a bit more room. Even a small loss on a second trade after a big win is ok but psychologically, if the second trade ended up a big loss which meant that the overall profits for the day were net zero or even worse, a negative amount after losing all profits from the first trade, this could lead to frustration and despair. These negative emotional feels will cause you to make mistakes in your trading and could lead to burnt out. With trading, I think that there is a level of stress in trading that, if reached, will lead to you getting completely frustrated and making mistakes which could lead to you completely deciding to give up on trading. It’s important to know yourself, know what stresses you out in trading, and work towards a trading methodology which will help you grow as a trader. This is particularly important if you’re learning to trade.. there are too many lessons and mistakes to learn from and each person’s tolerance is different.
