When we make decisions based on which stocks to purchase, to track, or to evaluate, we do it with the understanding that we accept a risk of potential loss. Yet no matter how often we explain to ourselves that loss is part of the process of becoming a better or more experienced trainer we dont stop becoming emotionally involved until we internalize the understanding that loss is not a failure. When we struggle with emotional reactions we assume that loss is somehow our doing. We often dont admit that based on the information that we believed at that moment that our judgment was purely and intentionally in our own best interest.



Loss, simply as a word, implies misery. When we start to replace the word loss with different vocabulary such as feedback, informational understanding, or even an unproducer, we start to segregate the emotional response we are conditioned to from the event. When we hold ourselves responsible for the loss, we strip away our ability to learn. When we learn from our nonproducers, we grow as traders. Of course, these are all concepts that many of us find somewhat foreign to us as we have been conditioned to understand our need and our drive to win all the time.

When complicated emotional responses are clouding your ability to make additional decisions then you need to step back, if even for a moment. Regrouping our feelings and taking emotion out of the trade is the only way to proceed with any kind of potentially positive outcome. When we are stressed, worried, fearful, or downright angry about a loss or the potential for loss, we hijack our own position and abilities to make the rational decisions that produce money.

There may be some of you that are shaking your heads and thinking that I belong on a mountaintop with some self help guru. But break it down into the basic emotions that we feel when trading and why to get yourself a better picture. When we feel the pressure of being responsible for something we cant control, we often dont perform well.

Believing that you can be responsible for the market runs along the same lines of believing you can be responsible for creating a hurricane or a tornado. You cant control these things. And because you cant control these things, when you place the added pressure of needing to make decisions that only lead to positive outcomes, you paralyze yourself with fear. When we make decisions based on fear, then we make decisions that are not well thought out or planned out.

If you insist on being a victim of the market, you will not be able to produce good results either. Being a victim of the market produces thoughts like, Why cant things go my way more often? or Why did the market do this to me? Statements like this make it out as though the market has victimized you. You are not being productive if you are busy feeling as though the market has done something directly to you with intention.

Because the market has no intention, then you are really only telling yourself that you are a victim of the market and that you are not capable of making really strong, unbiased decisions. The information that feed ourselves helps to determine our actions and helps determine what kind of trader we are going to be in the end.

When we trade from a mind set that deals in simple fact and doesnt create victimization or anger, we make clear headed decisions that are more likely to result in profitable outcomes. Learning experiences are not always easy to go through and sometimes they feel victimized. But the truth of the matter is that you are in control of how you feel. By replacing negative, blaming, or self deprecating thoughts with positive, empowering, and self confident thoughts then you raise your level of ability without having to waste time dwindling more money down the drain.

Coming to these conclusions is not easy. Emotional issues, especially those surrounding loss and loss of money, can seem very complex. In a manner of speaking it is really about practicing over and over until an unemotional and rational response becomes more natural than an emotional response. Often taking up little reminders, whether they are small tokens or a little gnome for your computer or the like will help enable you to gain and retain the insights you find necessary to prevent yourself from getting too emotionally involved in your losses, or nonproducers.

As you develop other trading skills, you will also develop skills to handle your nonproducing investments with more ease and grace over time. Whether you are discussing a skill involving the direct market watch or learning how to interpret reports and projections, you have to practice and hone your skills in order to start trading as a professional. Yet we pay such little heed to developing our emotional skills and in some cases, they can be more important and more intrinsically involved in profitable trading.