It's No Big Deal : Just Move On

When trading the markets, it is hard to be right all the time (especially these past few weeks where it is has been difficult to determine whether the long term picture will be bearish or bullish). But your money is on the line, and you want to be right. You can't help but put a little bit of your ego on the line with your money. It's just natural to be worried about losing money and wanting to win. The need to be right and the need to win can lead to frustration and anger, though. These feelings can interfere with your ability to stay calm, relaxed and focused on executing your trading plan. But what can you do? Should you let your anger and frustration out, or pretend that you aren't bothered. A recent study by Bond, Ruaro, and Wingrove (2006) suggests that expressing your anger and frustration may not be productive. It may be better to just admit that you are vulnerable to the whims of the markets, try to think about something else instead of how upset you are, and just move on to the next trade.

Bond and colleagues asked participants to pretend their ego was threatened; they entered this state of mind by reading a script that described situations that would bruise anyone's ego. Participants were instructed to cope with the ego threat in one of three ways: write down their feelings, distract themselves, or admit their vulnerability. People who wrote down their feelings felt more angry, while people who tried to distract themselves, or admitted their vulnerability, felt better. What's the lesson from the experiment? Our commonsense often tells us to express our emotions and "get into our feelings," but this doesn't always work. When you mull things over too much, it just makes you feel worse. That said, there are deeply felt emotional conflicts, on the one hand, and then there are the relatively non-significant feelings that occur as a result of relatively unimportant everyday events on the other hand. Most of the disappointments of the trading day, such as not getting a proper fill or seeing an unexpected price drop due to poor media coverage, should not be imbued with great emotional significance. (It's not as if these events are truly life threatening.) These things happen and they should not be taken personally or too seriously. Mulling over them just makes it all worse. It doesn't matter in the end anyway. So when you come across the minor hassles of the trading day, just admit that you can't control the markets. You have to accept the fact that you must go where the markets take you. Just pick yourself up, and move on to the next trade. Don't get hung up on making a big deal over nothing.