Warning: Your Level of Happiness Is NOT a Reflection of your P/L Sheet
How often have you found yourself 30% happier than the day before because your profits are up 30%? How many times have you emotionally hit “rock bottom” after busting out on your whole bank?
If any of the above sounds even vaguely familiar, you’re on a path to emotional and financial destruction.
Trading can be great fun and often takes up the majority of your time and energy. It’s important to be mindful of your profit & l0ss but even more important is not letting it control your mind and your actions. Every trade is a new trade and if you’re about to place a bet whilst focusing on the £50 loss you just had, I guarantee you will not be performing at your best.
It works in exactly the opposite direction too! I mentioned it in my Christmas Trading Update but far too many times I have had a losing day after a big green. The problem here is that too many people (including myself) listen to their ego after an eventful result and ignore the facts. Common example being:
- Day 1: John greens up for £200 profit with a tennis trade. The execution was perfect.
- Day 2: John starts trading knowing that he made £200 in 15 minutes the day before. He’s on fire! This is easy!!!
- Remembering how quickly he made £200 the day before, he doesn’t trade by his usual rules/filters because he thinks he can “play it by ear” as he’s now “basically a pro trader”.
- Losses…Lossess… & more losses.
Next time you come across a big win or a big loss, write down your feelings about it (seriously, get a pen & paper or write a blog!). What did you do right? What could you have done better? This will help put your thoughts to one side so you can focus on the next trade with a relaxed mind.
It will take a long time to get used to the swings in variance and it won’t be easy to handle. Be mindful of that and go a little easier on yourself.