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This is a discussion on my journal within the Trading Journals forums, part of the Reception category; Mmh... " a need to be abused ", the recurring "self-sabotage" thing, mentioned by many traders who use it to ...

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Old Sep 11, 2009, 11:07am   #29
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travis started this thread Mmh... "a need to be abused", the recurring "self-sabotage" thing, mentioned by many traders who use it to motivate their losses...

I am not so sure it's true. I used to say it all the time: "maybe I want to lose". "Maybe I lose because I want to lose". However, it's not true. I hate my job, I hate being at this office, and I would like to get out of here and resign. But I can't because I lost much of my automated trading gains with my discretionary trading. And did I do that because I self-sabotaged? I don't think so. I think I did it because I wanted to succeed too much, so much that I acted impatiently (as I was trading discretionary) and didn't wait for the right entry and exit time. But even before engaging into discretionary trading, I acted impatiently by trying to make money with discretionary trading when I still do not have a consitently profitable method. And, as I say all the time, if you don't have such a method, you should paper trade. Then, maybe I can't develop that method, because of my psychology and because of how I take losses personally (and can't accept them, and therefore do not conceive using a stoploss)...

So I have to rectify everything I said once again. Psychology does play a role after all. If I can't find a profitable method because of my personality, then learning discretionary trading is indeed largely based on psychological factors. Mind you, I said "learning" a profitable method, not "using" a profitable method. Indeed, once you have a profitable method, psychology won't matter. The problem is that because of psychology you may never learn that method. This only as far as discretionary trading. Automated trading has nothing to do with psychology.

So we can sum it up and say that psychology plays a role in one fourth of all trading - the ability of the trader to develop a profitable discretionary trading method. It does not play any role in automated trading, and it does not play any role in using that profitable discretionary method once you have it. Then of course to all those for whom learning a profitable method is the thing they're dealing with, it will appear that it's all about psychology as they say. WhaI I wish to add is also that if you have the wrong psychological make-up you will not be able to learn a profitable discretionary method, like it was for me (12 years of constant losses).

So if you consider that you either are fit to trade discretionary or you are not fit, then psychology's role is again at zero, or rather the need to work on your psychology is zero, because if you are unfit for discretionary trading usually you cannot fix it. So discretionary trading depends on psychology, but you still won't become profitable by working on psychology. It will be faster to become profitable by developing an automated trading system (which is exactly what happened to me).

Let me describe what happens to me when I engage in discretionary trading. At the start I am calm. I look at the chart and see an opportunity. I hesitate a few minutes, then I enter. That's going to be the best and most objective trade of the day. Then if it goes my way, and I make money, I get out of it and everything is fine, but there is one new problem: I am feeling good and confident. This will encourage me to make another trade and if it will be successful, it will make me even more confident and cause me a second problem: it will make me excited.

Pretty soon, my eyes are wide open with excitement, and I look like I took some drugs, maybe marijuana. I take my third trade, and I may get lucky this time, because by now I am not reasoning any more. Then I keep going until I finally make a mistake, definitely by my fifth trade. When that happens, I wait and hope, and then, as loss increases, it becomes a Hail Mary trade. Usually it can go on either until it turns profitable, or until, after a few days, my margin is not enough any more. Recently I have been doubling up on losers as well, which makes me recoup (easily), or almsot blow out my account within one day.

When I trade discretionary, after staring at charts for over 20 minutes, I turn into a junkie in every aspect. I don't think there is a solution. In 12 years, I haven't found a profitable way to discretionary trade. I can't keep calm, I can't keep distant, I can't be patient, I can't help taking losses very personally, I can't do half of the things I'd need to do. I basically have such characteristics that I blow out my account within a few days of discretionary trading.

Originally Posted by tenbobtrader View Post
Many people will not improve because they cannot bear self knowledge

The bad player will not deign to determine what he thinks by watching what he does. To do so might reveal a need to be abused ...

in calling what must be a superior hand

a need to have Daddy relent

in trying to bluff out the obvious best hand

et cetera ..........

its not easy to face ~ that rather than playing cards in spite of our losses, we are playing cards because of them.

David Mamet
things I have learned playing poker on the hill

Last edited by travis; Sep 11, 2009 at 11:50am.
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Old Sep 11, 2009, 1:16pm   #30
Joined Jun 2009
"some people lose their heads cold sober. Cards, dice, pool, it makes no difference.

You want to be a winner, you got to keep your head. You got to remember that there's a loser somewhere in you, whining at you.

You got to learn to cut his water off."


in Walter Tevis
The Hustler

all the best & good luck with it Travis


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Old Sep 11, 2009, 2:28pm   #31
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travis started this thread "Losing my head cold sober", yes, that's exactly what happens to me. Well, "compulsive gambler" is also a good and common description. Best explained in these two movies:

Watch Owning Mahowny movie on Free Online Movie and TV Downloads
Watch Rogue Trader movie on Free Online Movie and TV Downloads

It's me, in both movies.
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Old Sep 11, 2009, 4:39pm   #32
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travis started this thread Relapsed. And doubling up on losing positions... disaster. I felt that uneasiness, that boredom, that emptiness, and I felt the irresistible urge to fill it with a discretionary trade. Losing 500 right now. Believe it or not - after all the things I've been writing.
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Old Sep 11, 2009, 4:52pm   #33
Joined Nov 2001
Originally Posted by travis View Post
Relapsed. And doubling up on losing positions... disaster. I felt that uneasiness, that boredom, that emptiness, and I felt the irresistible urge to fill it with a discretionary trade. Losing 500 right now. Believe it or not - after all the things I've been writing.
Good job it's Friday. Keep writing. I think that you have done me some good but you, still, have to convince yourself.
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Old Sep 11, 2009, 6:08pm   #34
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travis started this thread You are right. I am a good preacher, but I don't put my preachings into practice. Well, maybe you can tell me if you have similar problems. That way maybe you can do me some good, too. Finally I closed the series of trades (about 10) and ended up losing, once again, about 100 dollars. Lucky again, like the other day, because I usually lose thousands. Anyway, guys. In one week of diary already two relapses. Am I not disgusting? There's something inside me that pushes me to trade, and that overcomes all the barriers I try to place between myself and discretionary trading: hiding the trading platform, getting rid of quotes and charts in it (it has to stay on for automated trading, or I would uninstall it), hiding excel... but it's never enough. In the past the only thing that kept me from investing was having an empty account. BUT. There is one period, in early 2008 and 2007 when I was just back-testing and forward-esting and back then I stayed without making a trade for almost a year. So I definitely can do it, but I need to be frantically developing new systems - something I can't be doing all the time (for lack of ideas and energy).


Unbelievable! After writing all this **** - it's as if there was another person inside me (one writes and the other one trades) - I went and made another trade and actually made over 100 dollars and broke even for the day (the systems didn't make any money today). So today no losses, after a few two hours of emotional roller coaster and considering I got very lucky. Which means, once again, that for me discretionary trading, from a financial point of view is useless.


After a few minutes, I thought of yet another thing to add:

After making even just 20 dollars with my discretionary trading, I am left with a feeling that I am good. I am left feeling good about myself. Whereas instead, if I made ten times as much with my automated systems, say 200 or even 400 dollars, I would not feel as good. I would need to make 1000 to feel good, and still I would feel like I got lucky and I didn't deserve the profit made. Instead, with just 200 dollars made every day I think I would feel very good about myself. Only, unfortunately it rarely happens. I wish someone could teach me to trade discretionary and make money consistently. But I wish they taught me almost univocal rules, and not told me to go by instinct like most people do. Many profitable discretionary traders don't exactly know what they are doing, or don't know how to explain it in words, or don't wish to explain it clearly at least. I am different. I enjoy explaining things clearly. If you ask me something, I'll either say I want to keep it secret, or explain it really clearly. Nothing in between.


13:25 CST

What the hell, another 300 on the CL, just now. I called a friend. He kept telling about how he was losing 2500 in paper trading on the CL, so I figured the CL must be really low for him to be losing 2500 by going LONG. So I went back yet another time to my trading platform and made 300 dollars in a few minutes. So today I am up 300, thanks to my discretionary trading. Which still means nothing because today I am up 300 but - as far as discretionary trading - I am down several thousands in the past 30 days, and several thousands in the previous 30 days. All it means is that I have an addiction - that's for sure.

Another note. If you want to go against the trend this is the best time. At around this time you tend to have reversals, viceversa if you want to go with the trend, you should have traded until a few hours ago. It's interesting: some traders tend to do one thing and they should trade at certain times, others do the other and should focus on different hours, others can do both. I can only go against the trend, but I can't wait till around these hours - so I just lose and lose.

Last edited by travis; Sep 11, 2009 at 7:29pm.
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Old Sep 11, 2009, 7:08pm   #35
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Originally Posted by travis View Post
Relapsed. And doubling up on losing positions... disaster. I felt that uneasiness, that boredom, that emptiness, and I felt the irresistible urge to fill it with a discretionary trade. Losing 500 right now. Believe it or not - after all the things I've been writing.
I am with Tenbobtrader ... "You got to learn to cut his water off."

Maybe my experience with stopping smoking may do some good...

I couldn't give up. Each time I decided to quit, I would buy cigarettes again. It started to feel that I wasn't in charge! :^) So after many attempts, I started to watch myself to see what it is that makes my go get another cigarette *even though I do not want to*. So I would smoke, enough to satisfy my craving, and then make a promise to myself that I will not break down and start smoking this time. Then I would watch myself - and observe how I talk myself out of stopping *this time* because there was some important reason and I would definitely do it tomorrow. This was the pattern few more times so I promised myself not to fall for this, to remind myself that it is just a ploy an not real. So again I watched myself talking myself out of quitting. It was quite unreal. But closely observing myself I could feel that **I did not want to quit**. The rational me said "quit", my subconscious said "forget it, why now?". I could see I stood no chance. So I decided to work on my subconscious, I created an image of my lungs being, as a result of smoking, rough like a sandpaper and each time I breathed the walls would rub against each other. After about a week, I felt I didn't want to smoke a gave up with no problem and never smoked not felt a need to since then.

My guess would be that you are addicted to some hormonal rush (endorphins?) triggered by your trading. You might try to observe your thought processes that lead you to 1. resuming your discretionary trading and, when you succumb :^), 2. stopping you bailing out when the trade goes against you. Then work out how to break the habit.

Good luck,

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