In the trading market, no matter whether you are confident or not, whether you are a successful trader or not, as long as you are watching the market, more or less personal psychology will change with the price fluctuations. This is an instinctive reaction, but successful traders and unsuccessful traders deal with emotions in different ways. After long-term accumulation, the sensitivity to emotions will decrease, but it cannot be said that Because they have confidence in themselves, they can remain rational and objective no matter the price rises or falls, and treat the real offer as a simulated offer.
Even Buffett, Soros and his like cannot take it lightly in the face of huge losses. This is the instinct of natural evolution.
Emotion is a kind of energy, and the end point of a smart trader's emotional outburst is far away. When faced with unfavorable conditions, as long as it is not a series of continuous losses, it can usually guarantee a slightly stable mentality. And even if the emotions of smart traders break out, they will use other methods to resolve their emotions, and force themselves not to make emotional operations by observing discipline. This is not the case for ordinary traders. They will get emotional when they lose a little. They have no discipline and don't know how to resolve their emotions, so continuous losses are inevitable.
In the process of trading, discipline is the only weapon that can fight against emotions. You must regard discipline as a matter of principle in life, and never touch or violate it, so as to survive the violent fluctuations in emotions in the market.
Take stocks as an example: when we buy a stock, no matter what analysis method we use to buy it, we must see its advantages and think it will rise before buying it.
If you just bought it, it went down to the limit, how many people can watch it go down without complaining? Unless you are doing a simulation disk. As long as you complain, you scold the market and yourself for scolding stock reviews, you are venting your emotions about losses. At this point you are already in an emotional state.
Once people are in an emotional state, they will make wrong and irrational choices. For example: "Damn it! I'll sell you as soon as the market opens tomorrow! Garbage!" For example, if he still has a lot of spare money, he will cover his position and buy other stocks to "make money".
A master operator like Jesse Livermore has suffered countless losses due to emotional problems before finally establishing his discipline system and reaping profits. But in the end, because of emotional problems, he broke his trading discipline and ended up in bankruptcy.
Here we should understand that emotions and rationality are always two sides of one body, absolutely inseparable. Only discipline, strict money management and entry and exit management, can save you. To put it simply, discipline is like a towering tree in a storm. Whether you are depressed, angry, or remorseful, as long as you ensure that you abide by the discipline you set and don’t let the tree fall, you will maintain your success. Once you violate discipline, even once, you may fall into the abyss of eternal doom.
Let's talk again, why do smart traders make trading plans during non-trading hours? It is because when the market fluctuates, it is too easy for people to substitute personal emotions into the market, thus making various irrational operations. Therefore, before the start of each transaction, we must determine where to start, where to end, and where to stop loss if there is an unexpected trend. Even if you feel uncomfortable, you have to execute it. This is the effect of the trading plan. Use the strategy of rational time to deal with irrational time to trade.
When people are in the trading field, every fluctuation will make people have countless thoughts in their hearts. If they rise, they are afraid of falling, and if they fall, they hope to rise. If you don't have a plan and discipline, you're nothing but a gambler.
What should we do when emotions arise?
The answer is, follow the plan and follow the discipline. The most important thing is these two. When you find yourself in an emotional state, you cannot make any decisions, because the probability of making wrong decisions at this time is greater than 80%, and you can only abide by the previous trading plan.
You may think that although you are a little emotional, you should be fine in making decisions, I can still think, and I have clear logic! In fact, once a person is in an emotional state, his logic is unreasonable and very narrow at all, and he will not realize it at all. At this time, logic will only become an accomplice to emotions. Focus on the logic of how to make yourself comfortable and comfort yourself, rather than the logic of looking at the market objectively.
This is the same as men and women falling in love together. Once two people fall in love, any shortcomings will be tolerated. Once two people quarrel, no advantage can compare to a disadvantage. At such times, people will only become extreme and will never remain objective and neutral.
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