In a perfect world, all of us could trade with emotions aside. But, try as we might, as human beings sometimes that can be an impossible task. We aren’t robots, we’re not trading machines — and it’s important to know that but also know how to control it. Because we aren’t robots. What happens is sometimes our Trade Monster gets out of control — causing us to lose money, due to our own lack of discipline and control.
It’s critical for traders to recognize what a trade monster is, how it appears in their trading, and how to tame it before it takes over…
I’ve had many instances throughout my career when my Trade Monster began to take over — and this is how to know the steps to take to get myself back in charge. But this is easier said than done unless you follow this formula. And, keep in mind, it’s critical to preemptively identify and correct symptoms before they happen — this is how you gain, or remain profitable in the long run.
What’s a Trade Monster?
Your trade monster is the human piece inside of you that works against your ultimate goal as a trader — which is making money. Your trade monster is the one that overtakes your better judgment, your methodical self, your logical trading steps. Your Trade Monster is the guy who keeps you from following your plan, and ultimately, sends you into a downwards spiral — like a baseball player who’s struck out three times in a row and now can’t even hit a foul ball.What does your trading monster look like?
A trading monster makes its appearance when traders become too emotionally invested in the market. A direct side effect of this monster is a trader losing money even though they know what they should be doing.
This happens because their ‘monster’ takes over actions, despite factional information being present. Each and every trader is haunted by their own trading monster (I’m surely you’re well acquainted with mine!). The tricky part, just as we’re all different from one another, so are our monsters — but the themes are the same. Some come out to haunt their trader weekly, others are scarcely seen. They don’t discriminate between the experienced or new.
For this reason, first and foremost, you need to know yourself in order to see when your monster is rearing its head.
Next week, we’re going to talk about Trade Monster symptoms, and what to do about them. But first, I want to hear from you. Has your Trade Monster reared his ugly head lately? Does he have a name? How much has he taken from you? Let’s not let him do it again… check out next week’s episode for more.
Also, this weekend the Simpler Trading team is holding a 20% off sale across the board. For the first time ever, my Stacked Profits Class is being sold at a discounted price, and you’re invited! Make sure to check it out. Use the COUPON CODE: MEMORIAL at checkout.
