Now there were four topics I wanted to write this week, but I have the choice of writing only one... The four topics I wanted to write are
- Continuing with my series on trading with MA's, trendlines & stochs.
- Price Action - What the market speaks to us, learning to listen.
- One of the friends, hakala commented on my ways of drawing trendlines, I wanted to elaborate on it.
- One of our friends, Mielec asked me about how do we control our emotions, though he & many others have written very nice articles on the various risks and emotions we undergo during trading, no one has written(of what I have read) about the ways to control & conquer them.
Well.... as is clear from the heading, I chose the fourth option because no matter what strategies we follow, no matter what our account size is, no matter how experienced we are in the markets, these emotions are things that get the better of us at one time or another.
Guys I would also suggest the articles by Positive, he is writing some very beautiful articles about how we are made. And to conquer the enemy you must know him, so I will suggest everybody to read Positives articles as well.
All right now on with my article on controlling our emotions, the fear, hope, despair and all that....
This is one of the biggest traps that no-body ever see. Often people don't understand that they are made up for or rather tuned for a specific Time-Frame trading. Some people love scalping, some love Intra-day, for EOD trading works, I know people who work only on weekly basis & I have heard that there are people who work/analyse their trades only once in a month, for them Monthly Time-Frame works.
So the bottom-line is to understand your Time-Frame. What is that your brain & heart is already wired for. The best way to find this out is to test and example all the Time-Frames. Try Scalping for two-weeks, Trade Intra-day for 2 weeks, then try and trade based on EOD for 3 - 4 weeks, and so on and try to find your comfort zone. During this excercise dont forget to update your journal, coz when you are finished with this exercise this journal will help you find your strengths and weakness and will help you decide the Time-Frame for you.
All Time-Frames have their own Pros & Cons. Intra-day or 5-min TF trading will give you many trades but there are many chances for whipsaws. EOD trading will give fewer enteries, you need to be patient and there will be wild swings in your balances, in similar fashion there are many factors you need to consider when selecting your Time-Frame, be your own Judge. Dont let any one else, even me tell you what Time-Frame is suitable for you.
There are many things that control your trading. Do you have a job, business, In that case scalping or day trading might not be for you, try a hand on EOD trading. Do you travel a lot?? Try weekly analysis and trading.
Try and find your comfort-zone.
Controlling & Conquering the mind:
Your biggest enemy is You. Your mind keeps telling you something every moment, and then there is intuition, 6th sense. All this happens when the mind is not in your control. The biggest question is how to bring mind under control.
For a healthy mind, have a healthy body. So the primary requisite is you need to keep your self healthy physically to stay healthy Mentally. Exercise or do Yoga every morning, Go out Jog, run your tread mill, Aerobics, Swim, do something routinely, regularly, consistently to keep your self healthy physically. Physical fitness boosts your confidence which is very much needed in trading.
Alright, now we have a healthy body and a healthy mind, how do we control it? The best and the only technique I know to control our mind is Meditation. Try Meditating every morning, in a silent and calm place, preferably as near as possible to nature. In positive's words, you need a lot of pure external energy which only nature provides, and you get it by inhaling.
Meditate, close your eyes, sit down and concentrate on that one point in between your eyes. Turn your mind blank, don't think about anything, not your family, not your job, not your account, nothing. Just concentrate on that one point in between your eyes. Your mind will try to wander, don't let it do it. Show it you are in control, tame it!
Initially this will be very hard. You will seem to go no where, but if you practice this consistently for weeks and months, it will bring in a calmness in your heart, mind & soul. It will change your perspective towards the world, life and of-course toward the markets, suddenly all this wild swings of the market wont seem scary to you.
You will be able to see through the charts and listen what the market is saying to you.
The mind still doesn't listen, I keep doing the same mistake again. This is something we are all very familiar with it. We know whats wrong with us, but still for some unknown reason a force pulls us to do the same mistakes again & again. We don't seem to learn from them.
I will again take support of Positive's words here. This happens because we store our mistakes in the Conscious mind("Child Mind") and because this minds capacities are limited, we soon forget our mistakes after a few profitable trades. The challenge lies in making our sub-conscious("Mother Mind") mind know and understand these mistakes, which is what will stop us committing those mistakes again.
The best way to achieve this is by telling our selves repeatedly of our mistakes. In other words hammering/repetition.
Now its impossible to keep talking to ourselves and if we do that, the people around will mark us loony. So say your mistakes a 10 - 20 times in to a recorder and record it. Now put this in your walkman/ipod/mp3 player or something like this, plug the earphones into your ears and let this play repeatedly, loop after loop. Let it run when your are exercising, when you are sleeping and when you are doing any thing which does not need too much concentration.
Don't let it play when you are meditating. During meditation you should think of & concentrate only that one dot.
Doing this slowly your sub-conscious mind will be aware of it and will stop you from doing the same mistake again.
These are the Positive's articles that I have mentioned above and taken help from...
I hope my article helps you in trading a better way.
Tx guys... do comment...