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Trading PsychologyMy Worst Trading Day | A Simple Guide For Those Bad Days...

My Worst Trading Day | A Simple Guide For Those Bad Days — TRADING COMPOSURE

Have you ever heard of Murphy’s Law? It’s a popular adage that states that things will go wrong in any given situation if you give them a chance. And it’s more commonly expressed as follows:

Whatever can go wrong, will go wrong.

Now, let me tell share with you one of the worst trading days of my career. The year was 2018, and on that fateful day, I got out of bed at around 10 a.m.—which is super late for me since I usually wake up at 5 a.m. sharp every…single…day. But due to some personal family-related reasons, I was agitated the whole night and didn’t get a restful sleep, hence my not-hearing-my-alarm.

At that time, I was living in Western Canada, so my time zone was Pacific Standard Time. And since I trade the NYSE session, on that day, I was late to the party.

As I turned on my computer and opened my trading platform, my heart skipped a beat and my jaw dropped as I discovered the horror in one of my trading accounts. A position that I was holding (Meta Platforms) and had open profits on had completely reversed on me because the company released disappointing earnings.

So, about 15% of my account went up in flames on that position alone and this was a big deal for me because I usually pride myself on being super consistent, risk-conscious, and process-driven. But here, because of the family issues that I was experiencing in my life at that moment, I somehow forgot about Meta’s earnings—usually, I shave off my positions going into any company’s earnings.

Moments later, I initiated a day trade, a small winner, but then, aware of my current suboptimal state of mind, I didn’t feel I wanted to press my luck, so I closed my trading platform and moved on with the rest of my day.

Overall, I felt lethargic and couldn’t get myself to focus on doing anything, so I read some stuff online, then took a nap.

Later, I went to the grocery store to get some food. As I was walking through the mall, I made the mistake of staring at someone in the eyes for a little bit too long. I wasn’t deliberately doing so, it’s just that for a brief moment I was lost in thought, my eyes happened to land on that guy’s face, our eyes connected, and I wasn’t even aware of it.

It was a second or two too long… and this, as you might have guessed, got me into trouble. I was insulted, pushed, and almost punched in the face.

It was an eventful couple of hours for me, and each moment thereafter, all I could see is more bad things happening to me. As a result, I felt my mood drop lower and lower, and lower.

The Negativity Effect

Whether in trading or in your life outside of the market, bad things will happen. It’s not a matter of “if”, it’s a matter of “when.” And when those troubles happen, they usually do so with momentum. Not because bad things necessarily happen in strikes but because after one bad experience, we unconsciously look for more bad experiences everywhere. This is a well-understood cognitive bias called the negativity effect.

According to Wikipedia, the negativity effect refers to the notion that, “even when of equal intensity, things of a more negative nature (e.g. unpleasant thoughts, emotions, or social interactions; harmful/traumatic events) have a greater effect on one’s psychological state and processes than neutral or positive things.”

Because of the negativity effect, a ‘bad’ instant is often like a domino effect. One block falls, and the other ones usually follow. We all have this bias, albeit, we’re affected by it to different degrees, but nobody is completely immune to it.

What I Do…

On days like these, I spend time with myself in solitude. A capacity for solitude helps one put things into perspective and re-focus one’s attention on what’s important. I also sit still. I look inward and face my discomfort. I stay with them and lean into them.

There’s usually a story going on in my mind that is causing the pain and the negative outlook. I notice the story. Whether the story is real or not is irrelevant. I just notice it and its nature. It comes as waves, and the more I get stuck telling myself this story, the more I am stuck in the outlook and the misery.

So, I turn my attention to the present moment, and with full willingness, I allow myself to feel everything, instead of running away from it; instead of abhorring it.

When I do so, curiously it’s not so bad. My negative outlook clears up, and my misery’s half-life is dramatically reduced.

When Everything Goes Wrong…

Some days are like that. You have nothing working for you. Everything goes south. But that’s Ok. Our minds always want to run away from difficulty, discomfort, and pain. This is a good strategy for temporarily not having to deal with difficulty. In the present moment, you might feel some relief.

But again, it’s temporary.

Plus, what this does is that it makes us better at running away from difficulties. We keep ourselves busy by way of distractions and never face what ails us. So, we never learn to deal with what’s inside us, and what’s in front of us.

This means that we are at the mercy of fear and discomfort because we don’t learn how to deal with those situations. And it’s true of trading, exercise, healthy eating habits, relationships… you name it. We’re like little kids who don’t want to do any hard work, but want the reward.

But try this: Pause for a minute. Face what ails you in the moment, as I do, and think about what difficulty you’re ruminating about. Become aware of your ruminations. Stop trying to avoid the pain and discomforts. Let them all come to the surface of your mind.

Now face them. Face them in all their glory. Stay with the fear, the discomforts, and difficulties, in the present moment. Not your story about them that you’re telling yourself in your mind, but the actual physical feelings in your body in the present moment.

How bad are those feelings? You’ll find that it’s no big deal. Stay with them for a little longer. And a little longer after that –– challenge yourself.

It’s All In The Mind

Personally, on that fateful day, when I sat with myself, I realized that this “Yvan” that took this massive trading loss, he’s fallible and imperfect, but he always does his best… and he’s damn resilient.

This “Yvan” that got insulted and nearly punched in the face… he doesn’t exist. It’s just an image that the angry guy in the mall had created in his head about who he thought I was. But it’s not really me. He created that image of me in his mind, and at the end of the day, that image is just his own reflection. Not mine.

And finally, this “Yvan” that I have in my own head –an Yvan who tries his best to be a good person—this Yvan too is just something I’ve created in my mind. Inherently, in the middle of all of this *seemingly* solidness, there’s no center. There’s nothing or no one to whom things are happening. There’s just a fluid present moment rolling on.

In the midst of adversity, as I turn to this reality–turning and facing my feelings, staying with them, and seeing the nothingness in the middle of it all–everything is suddenly OK. Not brilliant, but not so bad.

Of course, not all problems just evaporate with this introspective method, but I can tell you that you’ll be able to face many more things as you get good at it. You’ll get better at dealing with discomforts, instead of running away from them as most people do. You’ll get better at facing difficulties. You’ll be more present and more willing to stay centered in the moment, rather than needing distractions all the time. Not overnight, but with practice.

Speaking of practice, would you be interested in joining my coaching program? My goal is to make you consistent in trading in just a few months. Sign up here and I’ll send you an email with more details.

Wishing you a profitable trading week.


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