Age-old adage urges you to be emotionless as a trader; this is WRONG. What the writers and ex-traders who say this actually mean is:
EXECUTE without emotions.
You are a human-being with a vibrant spectrum of emotions. These emotions are primal and most of the time, happen with or without your permission.
Take Action without emotion
For example: How many times have you seen people jump for joy and post PnL cards on the timeline which only serves to mark the top?
Or how many times have you seen maximum euphoria or pessimism at the highs and lows?
We like to chop it up to an imaginary god-like entity that watches OUR PnL and moves the markets accordingly. Unfortunately, thatâs not the case.
Think about it like this â If you FEEL a certain thing, you need to realize that there are probably hundreds of thousands (or millions) of traders that are feeling the exact same way.
Most people fall victim to their emotions. They execute on these emotions. Could be a lack of experience. Could be because theyâre highly impulsive. Could be both.
Feel your emotions but donât ACT upon them. Use them as tools that signal and GUIDE you as you navigate the markets.
Keep in mind what the market wants you to feel. Use your analysis then SUPPLEMENT it with how you expect the average market participant to be feeling. Youâre MUCH better able to anticipate where pain points might be, which direction price is likely to take. Some people call this an emotional-form of Game Theory rather than some mathematical models.
Itâs insanely difficult to predict what the majority of people are DOING. But on a chart, itâs rather simple to predict what the majority of people should be FEELING.
Your mind shouldnât be working against you. Your feelings shouldnât be working against you. You as a phenomenal trader, should understand your own inner-workings and then LEVERAGE that (pun intended) to your advantage.
Only from here can you start to âfeel the setupâ instinctually. Youâve heard traders go on and on and on about how a lot of their trading is just gut FEEL. What people donât realize is the prerequisite to get to that point IS NOT just time in the market (which btw is silly). Time is not EQUAL for all traders. The prerequisite is you understanding those FEELINGS and incorporating them into your trading to the point where it SEAMLESSLY meshes in with your psyche. The perfect proprietary blend of technical and emotional planes of analysis for YOUR trading đđ»