A Trader Recounts the Pain of Losing.

A coaching client of mine at a bank has sent me a brilliant email that they penned this morning. They have given me permission to post it on my blog, so long as they and their firm remain anonymous. (Rest-assured all my client's discussions are confidential, unless the client provides permission to reveal details, as in this case.) I feel it will be an interesting read to all traders and active investors alike, who I'm sure will resonate with some of the feelings echoed in this email. 

The email:

I had a bad trading yesterday, not a disaster by any stretch, but a bad day, I was run-over by the EURUSD action post the ECB meeting. That is part of trading, sometimes you win, and sometimes you lose.  – However what I always find hard is how unpleasant and disturbed I feel the next day, even though I have been through it on many hundreds of occasion in my career.  It seems you can never escape it, it never becomes a neutral feeling, but always a bad feeling, an ugly feeling. 

A few months ago, I decided to write down how I felt in my journal. I did this because I realised then, that within a few days the feeling is forgotten, and I usually cannot even describe the feeling a few days or weeks  later, however I do know that it may have had a detrimental effect to my trading which usually has aggravated the original setback.  I thought that way, the next time I have it I can compare how it feels now to how it was then. And I can also ensure that in future I take the best course of action, which in the past I have not always done.

This is a copy of the note I made then, about the same feeling I have now:

‘The first thing I notice is I feel tight around the back of my neck and have an uncomfortable feeling running down my back and down my arms from my shoulders. It is not a pain, but a nervous and unpleasant feeling, it runs almost to my fingers. As a result of this feeling I think I am more hunched when sitting at my desk. I also have a little of that feeling running down the front of my legs. Overall the feeling makes me feel a little heavy and slow. 

The feeling is also unpleasant in my head, but it’s different, my head feels a little hot as well a heavy, and also slightly fuzzy in a way that is hard to describe. There is a kind of pain running around it, but not a headache or migraine. It is focused mostly on my upper front part of my head. I am also slightly clenching and almost grinding my teeth, this makes my jaw feel tight and heavy. 

My mood is angry and slightly dark, on the one hand I am distracted from my normal morning routine, but also I would say I am more focused on the market than normal, my eyes are darting across the screens looking for news, data, watching prices and scanning charts. This is not good for me, because I work best in a structured way and this morning I feel like I have been knocked out of my stride. I can sense an impulse to get involved straight away, to go into the market and try and fight back. It is almost as if I have been insulted and need to both seek revenge and prove myself.‘  

The odd thing is, that the loss I suffered then and yesterday’s loss were not devastating losses, far from it. Also I know that losses are part of trading, I accepted that long ago, and in doing so that became a big part of my trading philosophy, a big part that I think has contributed to my success over the years. Yet, no matter how big, and often how small my losses are, I always feel the same. I am a rational person, and I know I will most probably recover, yet at this instance my emotions are fighting to over-ride my logic. – My experience and my head has taught me over the years not to trade when I am like this, but my immediate desire is telling me to get straight back into the trade. 

Yet if I do this it is likely to be the battle for me, and I will almost certainly lose. – Therefore I am removing myself from the screens. I will not look at the market all day. I know many people who are running portfolios and trade-books can’t do that, I however have that luxury. By Monday I know I will probably have recovered my composure, though the feeling will probably linger in a smaller way for a few days, and I must proceed with extra caution for a while.  

I am sure most traders, fund managers and active investors reading this will resonate with this, and in particular will also recognise the internal battle between the rational and emotional. – If anyone would like to know more about that internal battle, I would strongly recommend buying or downloading a copy of Professor Steve Peter’s brilliant book ‘The Chimp Paradox’.

If you would like to know more about Trader Performance Coaching please email me at steven.goldstein@chrysalis-pc.com or visit our website www.chrysalis-pc.com. Chrysalis Performance Consulting Ltd is the new name of BGT Edge Ltd

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