I wrote about a seminar called Teach Me To Trade earlier this year, and a visitor left an interesting comment last night. Spike (not my alter ego, a different Spike) wrote:
When people ask me about learning to trade well, my first question of them is, “Have you ever seen Star Trek?” and then I wonder just how willing they are to declare war on their emotions and change their behavior to trade like a pointy-eared Vulcan.
Ultimately, that is what it takes; the will to drive all negative trade-killing emotion out of the equation and stubbornly trade a great risk/reward plan that you were smart enough to think of before entering the trade. Trading well and making money isn’t rocket science; it’s just a matter of forming good habits.
All one needs is a) Patience to stalk the trade, b) Good risk/reward planning, c) Ability to enter hard stops and sensible targets, and d) Ability to ignore greed and fear and hope. Trade like a Vulcan, limit losses, and let profits grow, and you’re on your way!
Taking emotions completely out of the picture is going to be difficult for any human. Our brains are wired for emotional responses.
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My wife and I went to one of these conferences a few years ago. The initial cost was “free” after that the cost for the second class was around $1500. At that point I could have spent well over $30,000 for additional classes if I would like to. The bottom line is that this was a good seminar to learn about trading but whether it was worth that kind of money is up to the person taking the course (it wasn’t for us). Is a Masters degree worth $50,000? A lot of people think it is.
“Taking emotions completely out of the picture is going to be difficult for any human. Our brains are wired for emotional responses”.
Yes, it is difficult to control and remove trade-hindering emotions. But with practise and patience and discipline, and accountability and desire, men snd women can do remarkable things.
And in fact, some emotion is good in trading. One simply has to train themselves to channel that good emotion, and eliminate the bad. For example, green hope is a good emotion when you are in profit and starting to fear losing the profits you’ve already made; the kind of fear that will cause you to close a trade way too early. And green hope is sooooo much better than red hope, which is where you’ve got a stinky sinky stock position hoping it comes back. Red fear is helpful too; fear of a loss getting bigger.
So emotions, when channeled correctly, can help save capital and bring about very nice gains.
Yes, it’s hard work to manage that kind of self control. But seeking perfection is admirable and honorable.