Trading Is Psychological Warfare

In the past two weeks I haven't followed my rules. Last week, on 3/19 in an effort to lock in profits on the Nasdaq futures, I exited a trade early and gave up an additional $1480 in profits. Instead of trade being a $2205 trade, it was a $725 trade.

Yesterday, the same thing happened, in an effort to lock in profits on the Nasdaq futures, I exited one of the trades that day early and gave up an additional $540, instead of the profits that day being trade being a $1325 for the day, profits for the day were $825.

Not following your trading rules lead to bad habits, which will cause inconsistently trading, which will cause you to blow up your trading account and land you a spot at Trinity Church. Trinity Church is a church with three separate burial grounds near the New York Stock Exchange on Wall Street.

Although the trades were profitable, I didn't follow all of my rules. This may sound crazy, but it would of been better for me to follow my rules and the trades not be profitable.

This post is to help you all hold yourselves and myself accountable to your/my trading rules. If you struggle like me at times, this post serves as a reminder that Trading is Psychological Warfare and we must do the following (content comes from my intro post):

• Use positive thinking in my trading. Believe, which will become thoughts, my thoughts which will become words, my words which will become habits, my habits which will become my values, my values which will become my destiny.

• Not eliminate my emotions, but take advantage of my positive emotions like determination, patience, confidence to support effective decision making and follow-through.

• Implement consistent skill-based trading to manage my emotions. Use discipline in my trading because that will make me profitable and tolerate my discomfort in order to control my actions and behavior. Be patient and wait for the opportunities - they will come.

• Focus on process goals, not outcome goals in order to control my actions despite pain or discomfort.

• Trade without fear or overconfidence and stay completely focused in the "now moment opportunity flow” to take advantage of whatever opportunities the market may offer in any given moment.

• Trade for at least a Reward : Risk of 3:1 because professional traders go broke by taking small profits.

• Keep the odds in their favor and have a large enough sample size of trades to give my trading plan ample opportunity to work.

• Be rigid in my rules and flexible in our expectations so I can perceive, with the greatest degree of clarity and objectivity, what the market is communicating to me.

• Not focus on the win or loss, utilize the market patterns and accept the randomness of the market in order to put the odds in my favor and become consistently profitable.

• Follow my trading plan and react to signals the market gives me without hesitation because it’s not my job to know whether a trade will be a winner or loser.

• When I’m in front of the computer, be relaxed and interact with the markets calmly and confidently which will allow me to make the right moves, at the right moment, smoothly and effortlessly.

• Not be glued to the computer all day watching every price movement like a hawk. I don’t need to know what is going to happen next in order to make money.

• Interpret losses as simply the cost of doing business or the amount of money I need to spend to make myself available for the winning trades.

• When the trade is finished, forget it and focus on the next opportunity. Don’t recoup losses immediately (revenge trading).

Although I have gotten a lot more comfortable with my trading in the last 8-12 months, I need to continue to realize I am just at warfare with myself and not with the Markets. If you and I can continue to tame our brains when trading, we will reach all of our financial goals in the future.