EMOTIONS AT WORK
“When dealing with people, let usremember that we are not dealing withcreatures of logic. We are dealing withcreatures of emotion, creatures burstingwith prejudices and motivated by priceand vanity.” Dale CarnegieIntelligence, knowledge and talent have tobe applied. Any person who is successfulknows that application requires discipline,self-control and condence in one’sabilities. Bjorn Borg was a great tennisplayer, he had talent. However, whatalways gave him the edge when playingwas his mental control, which earned himthe nickname “Iceman”. He combinedtalent and discipline to achieve his successand you must do the same.We are all put in situations where, afterthey have occurred, we look back andfeel that if only our emotional controlhad been better. You are going for a job interview and role-play Th a friendbeforehand. You come over as assertiveand condent. In the interview itself,however, the condence goes. You practisea best man’s speech, it ows well andsounds great; however, on the day, deliverysuffers as you feel nervous and shy.All the above we can associate with.The fact of the matter is, when thepressure is on, our actions are inuencedby our emotions. The more important thescenarios, the greater the inuence willbe.Trading is no different. As soon as moneyis committed, logic can go out of thewindow and basic emotions take over.Consider the difference between papertrading and trading real time. Whilst papertrading, you earn very good prots, youare condent and optimistic. You see avery lucrative business opportunity, so younow decide to open an account and tradefor real.On studying your charts you see anopportunity, a perfect double bottom andprices low in historical terms, now is thetime to buy. You ring your broker to placethe trade; however, the overwhelmingcondence of paper trading has nowdeserted you. Perhaps you had betterdouble-check the formation. After muchdeliberation you decide to phone the brokerand the trade enters the market. Forthe next two days prices rise dramatically,your prots grow; you feel great, what aneasy way to make a living. The next dayprices drop and your prots are cut in half.You feel uncertain; perhaps you shouldtake the prot now before it gets away.You decide to wait. The next day prices fallfurther and close below your mental stoploss. Your system is telling you that youshould be cut. However, you only have asmall loss and it should turn around andyou will soon be back in prot. The nextday, to your horror, prices have collapsedand the majority of your equity is now lost.Your reaction is now one of anger, whydidn’t you bank the prot when you had it!The market’s move is totally illogical, youfeel anger, pain and frustration, you arenow totally disillusioned and fed up, andall you want to do is exit the trade.Welcome to the real world of trading!
“Seeing is believing, but feeling is thetruth.”
Thomas FullerThe above is a hypothetical yet commonexample of how traders who have mademoney on paper suddenly crumble underthe strain of real trading. Many peoplederide paper trading and say it is of littleuse. However, providing you know thepitfalls in advance, it is a great way tomentally prepare yourself for the day youhave to trade real money.
“The mainstay of training her is condence.That’s why we show them how to let a tank run over them - it gets their condenceup.”
Ofcer in ChargeUS Special Operations CommandOf course nothing will take the place of the