Chip sent this to me as a PM.
I thought that it had so much great stuff that could apply to everyone that I asked him if I could post it here.
With his permission and my thanks:
Gersh,
>>It was an entire month before I could even look at a chart.<<
I pray that your losses were not staggering and not a threat to your monetary stability. But what you've said sounds serious and an awful experience.
Your closing down the thread applied pressure to me to begin more active live trading. This has been an important step for me psychologically....!
Some Thoughts:
Having gone from $250,000 to $600,000 and back to $000,000 three times and once from $900,000 on the paper trading thread, I finally came to an understanding that something in my psychological composition and focus was causing me to crumble.
I'd exploded for one reason only..., Greed....!
And clearly from the rush of power and the excitement of seeing big gains!
When I lost I was depressed by seeing big losses and made even more mistakes trying to recover the losses. The Gestalt came and I released that this "fear and greed" had to be controlled. So I began meditating more and sought to discipline the psyches natural urges.
Losing money is a part and parcel of the index futures.
What we can control to a great extent is the amount you lose. So I lowered the number of contracts traded by dividing the account in half and then only traded the available margin of 25% of that 50%, at any one time.
If you have a $50,000 account and are short 1 mini with a stop in place, and the market turns against you, you're cool. If your're short 10 even with a with stop your very unhappy.
Trading with a $10,000 account and short 1 mini your're unhappy with a bad read, but alive.
If your 5 short your wasted.
Money management to me is more important then Guts and now more valuable then seeing massive gains.
Someday I hope my account is large enough to trade 5 maybe 10 contracts at a time. But that will always be 25% of what I could afford to lose at any one time.
Gersh, I hope you find energy and place to trade again at some point..?
My Best,
Chip |
