Monday, January 24, 2011


I have traded now for almost twenty years and I have seen the best and the worst of myself several times.  Through out my career there have been times when I could do no wrong in the markets. I was able to take confidence in myself at these points and branch out into new ventures with an unbridled passion and a sense that I could do anything I wanted. Then there have been times that I wanted to run away and never trade again.  During these times I have questioned my personal self worth not only as a trader but as a man. I have beaten myself up and torn down all the internal confidence that I had work on for years in a matter of minutes.  The traders mind is a battlefield, and I refuse to be defined by my P+L.

The battlefield is littered with emotions.  There are memories of other traders mistakes and the personal tolls that both success and loss have created.  There are your own experiences that become weaved into your psyche to determine the tapestry that is your career.  What will this tapestry look like when you are done?  How do you know when its complete?  Or will it ever be completed. 

I haven't written this blog for two weeks now because I was in a personal downturn that has challenged my perception of myself.  I initiated a short position in the Euro currency a few weeks ago at 129.50 with the idea that the Euro was on its way bellow 120. I had great confidence that I was correct in both my fundamental and technical views. The market started to turn against me and I thought, stick to your game plan and tolerate some pain.  I added to my short at 131.50.  The market now jumps 150 points in a matter of hours and I have a serious loss.  I still think I am right my position long term at this point but I am not happy with myself.  I know as a trader I have two choices now.

1. Take the loss and forget about it
2. Continue to take heat and live within my personal battlefield.

I decided to do none of the above and I added to my position at 133.80.  Anyone who has been paying attention to the market knows I am wrong.  Not only was I wrong my forecast but more importantly I was guilty of a major trading violation of not adding to a loser.

That position has inhibited any possible trading opportunities that may present itself but more damaging has crept into my non trading life.  I have become terrible to live with.  My kids and my wife who are everything to me are mere visitors in my life, I am transfixed to the screen.  I have no tolerance for anyone.  I am desperately searching for anyone to back my original thesis, I pour over the internet reading blog after blog.  There is no help.  All the experts have flip flopped and are now calling for the Euro to keep rallying to 137 or 140.  I still think I am right on the long term direction but my account is screaming your wrong!

I finally take part of my loss at 134.25 but I sit with 2/3 of my horrendous position.  One by one the so called experts are proven correct as the Euro rallies relentlessly.  I ignore my next mental stop loss and the market blast through on its way to 137.  I am not financially ruined because of my position but I am not the same person I was a few weeks back.  I have fought battle after battle in my psyche and I am wounded.  What does my tapestry look like at this moment?

If I asked my family what my tapestry looked like, they would surely describe a rich and intricate technicolor masterpiece.  I on the other hand can only see the two inches in front of my face and the colors are dark and uninspiring.  I will continue to weave because of the love of my family and the friends.  I am incredibly fortunate to have them in my life, especially when I am at my worst.

The purpose that one has in their daily life cannot be defined by dollars and cents.  There is more to life and I am grateful I have a support staff to ensure a rich technicolor tapestry.

The Evolving Trader

1 comment:

  1. Anyone that has dealt with the stock market has went through what you're going through. The question you need to ask yourself is this. Why couldn't I get out at my original stop? When this happened to me in the past, I found it's because my ego didn't want me to admit I was wrong. Therefore, I held onto a losing trade. Try reading "A New Earth" by Eckhart Tolle. It's all about the ego and why we do things we shouldn't do. Keep your head up. Even if your next 100 trades are wrong, it doesn't mean you're any less as a person. It just means you'll have less money in your trading account.