The tendency to self-destruct
Published on Wednesday February 17th, 2010 at 01:26AM by iwogar
I've noticed that when I get to a certain number of wins or point in my equity curve, I inevitably make stupid mistakes that result in a major draw down. Note sure what drives this, but Michael Douglas eluded to this in his book "trading in the zone". There seems to be a psycological barrier I'm dealing with ...After studying my trading results it appears I have several small wins and then one huge loss that wipes out the small gains and more$%! Also noticed it usually happens after my first loss following several wins ... like i've gotten so used to winning that loosing a trade ticks me off. As a result, I've been paying close attention to my self talk after a loss, to determine the line of thinking that leads me down the path of self destruction. Hopefully I'll be able to recognize and counteract it b4 it influences me.Loosing is part of trading, the cost of doing business. Got to think in probabilistic terms, like the casino: it always wins, in the long run. Focus on improving/executing my edge consistently and the odds will take care of the rest. Lay down the rules of engagement, play the market on my terms, be the casino, not the player.

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