The following article is written by IDTA Member Dani McLeod for Your Trading Edge magazine.
Dani McLeod has been a member of the IDTA family since the start of 2016, having completed both the Advanced Trading Course and the Trading Business School Program. A few weeks after I wrote and submitted my last YTE article I fell into an exhausted heap!
If you missed the article, I spoke about finding our reasons why we trade and for me, I mentioned that I have a very strong burning desire; a desire to make a difference not only in my life but in the lives of others. That burning desire (although great to have!) also meant I had blind-sighted determination and it meant I was in complete denial about how it was all working for me (physically, mentally and emotionally) as well as for our family. Most evenings I was dragging myself off the couch to go trade the US time slots and I was often functioning on very little sleep (due to sleep-ness nights with our little girl) but also with very early morning starts every single day.
Some traders I know are naturally night owls and function very well trading in the evenings or on very little sleep. One of my trading buddy’s is one of them! He trades the US open at 11.30 pm his time until about 1 am and then gets up at 4 am to go work in his catering business during the day. As he says, he’s so used to functioning like that it’s not an issue and if his trading results are anything to go by it really isn’t a problem; he is smashing it!! So much so that he is on the verge of selling that catering business to be a full-time trader.
What works for one person doesn’t necessarily work for another and especially in trading, it’s important to figure out what day trading strategies work best for us because at the end of the day, it needs to be a sustainable long term strategy in more ways than one.
I had hit a crossroad with trading and it was either quit trading altogether (never!) or come up with a creative solution. My style of trading is very, very short term meaning I am in and out of the market with profits in a matter of minutes. My average trade is less than 5 minutes with the majority paying in around 1- 2 minutes and I have to trade when there is good volatility in the market usually around a market open. This means that it’s either when the US wakes up or when the European markets wake up. The Asian open isn’t an option for me at this stage time-wise.
I had a discussion with my husband and children and we came up with a viable school pick up and after school activities solution that works for everyone so that means I can trade the European open at 3 pm Perth time. I am now an FDAX trader and I am often finished trading in the first 30 minutes or so. I am really enjoying trading fully awake and alert too! My kids are loving their after school activities and my husband has his wife back every evening so it’s a win-win solution for everyone.
Enough about me!
What I would actually love to discuss in this article are fears that can come up when trading.
Trading is an incredible, personal growth journey and opportunity and the average trader generally doesn’t realise this when he or she starts trading. I’m going to assume that for the majority starting out – it was the same as for me, that it was all about charts and candle sticks not actually thinking I’d have to do some work on my mindset or mastering my emotions! Fancy that!
As my amazing mentor says, trading is a mirror and EVERYTHING shows up in trading.
Got some fears about losing money? That will probably show up.
Got some fears about missing out (FOMO)? That will probably show up.
Got some fears about not being smart enough or good enough? That will probably show up.
n my first year or so of trading there was a certain stress (and if I’m being honest – slight anxiety) whenever I sat down to trade, where this came from or why I had it I had no idea. I was often impatient and impulsive. I took trades that were not in my plan and then got angry at myself as when looking back on all my losing trades most were those not in my plan. I would get frustrated at myself for this impatience knowing that the trading system does work; it was about me working it. I often felt like I was going ‘into battle’ with the market like it was ME against IT when all I should have been doing is learning to just flow with it and to use the market to my advantage.
Fear of missing out? Maybe.
Fear of not living up to my own (often very high) expectations? Possibly
Fear of what others thought of me, judgements and external pressures? Maybe.
I actually think it was ALL of the above and it was also about a lack of self-trust.
From what I have seen over the past few years, the really great traders I know have learned to have a high level of self-awareness and can recognise when fears and emotions are starting to enter their trading. When we lack self-trust we look for it in other areas; we look for some kind of external validation, acceptance or acknowledgement and when looking outside of ourselves we forget that it’s what’s going on inside that counts. That we actually don’t need that validation from others! I believe I had past stuff from my childhood to acknowledge and grow from, stories I used to tell myself about not being accepted and my opinions not being worth hearing, of me not being worthy enough, desperately seeking the approval of my parents so that I too could be seen as worth their attention.
ALL this stuff showed up in my trading and there was a certain level of desperation looking back now. It’s almost like at a subconscious level every trade was a chance to prove to my family (and myself!) that I AM good enough, that I AM intelligent and that I AM worthy, that I AM someone that my parents can be proud of. Of course, none of this I ever thought of whilst trading, it’s all at a level that we aren’t usually conscious of until we go searching for it.
Sounds childish right? Well, there is a little kid in all of us – it’s called our ‘inner child’ that we need to nurture and help heal if we are going to be great traders.
From what I have seen over the past few years, the really great traders I know have learned to have a high level of self-awareness and can recognise when fears and emotions are starting to enter their trading. I’m by no means a trading coach but I do believe the first step is to take note of what emotions are coming up while we are trading and write them in our trading journal. There could be a trend or pattern (no pun intended!) that would be interesting to explore with some inner reflection.
Have I completely mastered my emotions and have a complete absence of fear while trading? Of course not; we are all humans – not robots! What I can say, is that I am a very different trader these days to the impulsive, impatient and slightly desperate trader I once was.
We can only strive to be better versions of ourselves than we were yesterday and in trading it’s a matter of never giving up!