Wednesday, February 18, 2015

Combine- Day 2.

I know these days well.

It goes something like this. Happy with my actions on the prior day leads to euphoria. I can't get to sleep until late as I feverishly imagine what it'd be like to be completely location and time independent. I'm talking calculating how much it costs to live in Medellin, who I'd pay tax to if I was a digital nomad...the works. When I do eventually get to sleep, I don't rest well and my eyes are wide open by the crack of dawn.

One of two things then happens:

1) God complex in tow, I bend rules that served me well even if, in the moment, I'd swear that I didn't. It doesn't work out or, worse still, it does.

2) I become overly careful. This then leads to frustration which ultimately leads to 1). The amount of frustration is directly correlated with the amount of damage I end up doing.

In short, euphoria leads to emotional and physical exhaustion which then leads to decisions based on "then" ("it worked back then"= past or "If I get out now and it goes in favour, then I'll miss out on X"= future) rather than "now". "There" rather than "here". Gone unchecked, this can cause traders to doubt their edge, or abandon it entirely. All they needed to do was trust and stop trading so as to limit the damage. This is what I've done today.

A whole host of emotions arise when you take this kind of action; "I could have made it back and then some" or "If I have true edge, I should just plug away and take more trades" but that's just our inherent faulty wiring that causes us to fight when we are losing and run with some gains when winning.

Continuing with 5 lots for now and back to waiting diligently, taking what the market has to offer and asking for no more.

No comments: