Last week, we talked about what a Trading Monster is. To recap, a Trading Monster lives inside of you and it that takes over, distracting you from your trading plan and causing you to make foolish decisions and mistakes. These mistakes can ultimately make you lose money.
So I felt it was appropriate to actually discuss Trade Monster symptoms, so you can identify them in your trading.
Here’s a list of symptoms to start…
Trade Monster Symptoms
- Buying without a setup
- Risking more than is appropriate per trade
- Feelings of extreme euphoria when trading
- Planning large purchases with future trading profits
- Exiting great trades too early
- High Five Trade
- Too many distractions
- Refusing to shift methodologies when the market shifts
- Extreme hopelessness
- Lack of discipline
- Forgetting Mr. Market is in charge
- Insert your favorite one here…
This isn’t an exhaustive list, but, it incorporates many of the most common symptoms. These are the feelings you have or the actions you take, that ruin your chances of making money. In order to conquer your Trade Monster, you must recognize these symptoms when they appear — and take decisive action.
These symptoms appear at different times.
For example, remember last January and February, when the market was skyrocketing higher? Did you perhaps get too euphoric, add too much risk, or share too many high fives during this time frame? If so, then you were visited by your own Trade Monster.
Or, perhaps they appeared in March — when the market was crashing, the indexes went limit down multiple times per week, and you may have lost hundreds of thousands of dollars in your retirement account. Did you feel hopeless or like you needed to throw on trades to repair the damage? Again, this was a visit from your Trade Monster.
Have you experienced these symptoms?
Which ones take the most money from you?
For me, it used to be euphoria — before I learned how to tame that monster, but lately, it’s been the high five trade. I swear, every time I congratulate myself over a good trade (before it’s closed) it immediately goes to a loss. Drop me a comment below and tell me, how does your monster show itself?
In next week’s episode, we’re going to talk about what triggers your Trade Monster.