FREE DOWNLOAD: https://netpicks.clickfunnels.com/dangers-lurking -- Stay Out Of Choppy Price Action “That trading loss was a car payment!” “I made more in this trade then I’d make working a 9-5 J.O.B.!” I’ve heard these and many more emotionally charged statements like this more times than I care to remember. On the surface they appear harmless since for most people: Trading win = Excitement Trading loss = Disappointment Plus, after all, we trade to make money and a loss takes away from that occurring. (more on that later). How bad can these types of trading emotions be? see more: http://www.netpicks.com/r-curbs-trading-emotions/

1. R Curbs Trading Emotions
http://www.netpicks.com/r-curbs-trading-emotions/

2. “That trading loss was a car payment!”
“I made more in this trade then I’d
make working a 9-5 J.O.B.!”

3. I’ve heard these and many more
emotionally charged statements like
this more times than I care to
remember. On the surface they
appear harmless since for most
people:

4. Trading win = Excitement
Trading loss = Disappointment
Plus, after all, we trade to make money
and a loss takes away from that
occurring. (more on that later). How
bad can these types of trading
emotions be?

5. One of the reasons people love to use
trading systems with a hard and fast
rule set is because it is supposed to
take something out of the equation:
Emotions.

6. You don’t enter a trade because the
big green candle gets you nervous you
will miss the move.
You don’t market out of a losing trade
because the P/L has gone negative.

7. Your trading system gives you the
entry, exits, and with many systems
you get points to “scale and trail” your
position. Your emotions are sidelined
only if you follow the rules of the
system.

8. The truth is that even with a system
that lays everything out for you,
people still try to change things,
add/subtract rules, and let emotions
get in the way.

9. Regardless of the system, trading
emotions can take a perfectly good
trading system and make it a losing
system.
Back to the two comments above….

10. What they have in common is they are
full of emotion which is not good for a
trader. These emotionally charged
statements can cause you to step
outside of your trade plan and do
things that most would call
amateurish.

11. “That trading loss
was a car payment!”
Next time I will cut the trade off earlier
OR increase the risk outside the preset
stop area.

12. Both of those plans are a road to
failure. Cutting the trade off before
the setup is invalidated ignores the
“noise” factor in the markets. Moving
the stop away further away during the
trade can just give you an over sized
loss that you didn’t plan for.

13. “I made more in this trade then I’d
make working a 9-5 J.O.B.!”
Next time I will increase position size
OR let the trade run even further.

14. I think you can see the issue with both
of those plans. Wins/losses are a
random distribution (you know you will lose just not when you will)
and an over-sized position may be
taking place when the market takes
your stop.

15. Letting the trade run, while not a bad
thing, has many people not reading
the signs that the run has ended and
they give up most of their winnings.

16. Trading systems and trading plans are
designed to take the emotions out of
your trading. When you celebrate
each individual win or complain about
an individual loss, you are planting
seeds that down the road can
influence your trading actions and
results.

17. I took the “R way” after reading a book
by Van Tharp. It’s not complicated but
you should not underestimate the
subtle power it has over your
subconscious.
R stands for risk and your wins and
losses are represented by an R
multiple.

18. You buy a currency pair at 1.5000 and
each pip is worth $10.00.
Your stop is at 1.4980 which is $200
risk.
Your initial risk is 1R.

19. If you get stopped out at your price
you have a -1R loss.
Instead of logging a $200 loss on this
trade you’d express it as a -1R result
instead of a car payment.

20. If you hit 1.550 and exit your trade,
you’d log the trade as 2.5R which
means you made 2.5 X your risk of
$200

21. Sound too simplistic for trading?
It is simplistic but the effects on your
psyche can be quite impressive.

22. You can also think of it this way: each
trade is comparing apples to apples.
Using R forces you to compare every
trade to the amount of your initial risk
and is a great “at a glance”
effectiveness of your trading plan.

23. What does having multiples of -1.5R
tell you? Either you are not getting
out where you first planned on or you
are getting horrible slippage on your
exits.
Either way it quickly alerts you to an
issue.

24. What about having multiple .5R’s on
your tally?
Either you are cutting trades off too
quick or your entries are in need of
serious help.

25. Combining those two tells you that
you are trading your account into the
ground and it is time to assess. It’s a
new way of thinking for many and
while it may only help with emotions
related to money…

26. it may also show you that your trading
method is not what you thought it was
cracked up to be.