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Article on the emotional aspects in trading.
Last updated
Article on the emotional aspects in trading.
Last updated
In general, when considering trading for a living, one often surrounds oneself with positive expectations, shields or simply ignores all negativity, and anticipates owning a beach house, sports cars, and the freedom to go and do as one pleases in a short amount of time. However, this unique feeling of "trying to make it" and all the emotions that come with it are not special; one is not special. In fact, one is among the many who try, and among the many who probably fail. Consider oneself damned; one will be running after one's tail for eternity, chasing something that is simply out of reach. But is it really out of reach? (Chases tail again).
Damned individuals will eventually come to understand precisely where they stand; they simply seem to revel in the ongoing torment of winning small and losing big. I believe this behavior could be likened to an addiction. However, there are those who fare even worse—I refer to them as The Lucky. They begin at the bottom of a bull run, discover a strategy that yields an absurd amount of money in a short period, and regardless of the outcome, they receive validation that they've "made it." Only to subsequently lose everything, and more, because they never learned that the true danger does not stem from the market, but from within.
But I actually know what I am doing! (Loses again).
Now that we've covered the majority of the market, approximately 98% of its entire participants, let's shift our focus to the exceptional few. You might be inclined to believe, once again, that you are among this select group. However, you are likely mistaken or still in the early stages of discovering your true identity in the market. I believe the following part is the most crucial in this entire article: Traders do not prioritize the things you do. You're wired to seek validation; you score a goal in soccer, people cheer, and you feel euphoria. You win a trade, you expect a substantial profit, you feel victorious having made a certain amount of money. Traders operate differently. When you cross that bridge into trading, PnL (Profit and Loss) doesn't evoke much emotion. You trade the market based on what you see, not on how you feel. Emotions don't dictate your decision-making; when you're analyzing candlesticks or monitoring open positions, there's no room for emotional influence. Let's consider eSports as an example; at the highest level of competition, every single click or action could potentially sway the outcome of a game. There's absolutely no room for error. When you analyze top gamers, you'll notice they operate with precision, akin to a well-oiled machine. They understand the process, and they execute it flawlessly. Emotion is simply not a factor in their decision-making process.
When it comes to opening a position or executing a trading setup, there's no emotional attachment involved. It's a matter of analyzing the data, studying the chart, and assessing the probabilities. Either the conditions are favorable, and you enter the trade, or they're not, and you refrain from doing so. It's a binary outcome—you either emerge victorious or face a loss. Emotional sentiment doesn't factor into the equation; it's all about objective analysis and strategic decision-making.
It's time to shatter your ego and crush your dreams, emotions.
Consider trading as the hardest game in the world—real stakes are on the line. There's no respawning after you've lost 90% of your capital, and there's no recourse to prevent self-destruction except by mastering your emotions, detaching yourself from feelings, and strictly trading based on what you observe.
With PinoAPI, we empower individuals to trade devoid of emotion; they simply press buttons, and the system manages the rest. While this may seem advantageous, it also bears resemblance to playing a slot machine at a casino—unless you engage with data, charts, and macroeconomic structures without emotion. If you follow someone else's ideas or act on another person's data and charts, you find yourself back in the realm of the casino, placing your trust and money in someone else's hands.
When the market goes against you, it's best to take the small loss. There are no fairytales or certainties here; it's simply a matter of winning or losing money.
Consider all of the above, reflect on yourself, remove all emotion, discover your style (whether it's through charts, data, or macroeconomic analysis), tailor your risk management to fit your style, and finally, trade based on what you see.
