Trading Emotion

[tsptalk]

A great topic discussed in another thread, but thought we'd copy it here in the psychology thread.

...usually right about the time I feel like bailing on a trade the market decides to turn around. It's almost as if the big boys are trying to shake out the "dumb money" longs before taking us back up.

Exactly! It took me years to admit to myself that I am the dumb money and that my emotions are the best contrarian indicator. It's still tough but I have to tell myself that my excitement or dread is probably a sign that things are about to change.

Right now I'm somewhere in the middle so my indicator is not giving me much help.

 

[peterson82]

I have noticed this too. If I have a strong desire to sell, but don't sell (for what ever reason) most of the time it tends to reverse direction. I told this to my brother who was losing his shirt because of poor timing. We both have more patience now, and are better for it. That's not to say I actually do sell it at the correct time, haha.

 

[Nate]

I hope you're right. Im getting bored with seeing more red than green lately. -out on a limb this month with sent-survey 100% in, and changed some stock positions.....if I remember, I believe it was C.H's post pointing out smart money went to the sidelines the day after I jumped in.

 

[burrocrat]

I'm convinced that a 1% pop or drop doesn't really matter any way. Until you cash out. Then they will pay you in dollars. Which don't have such a good track record for retaining value.

I could waste so much time worring about today, that I forget to live today.

wheeee, whee, whee.

 

[tsptalk]

I hope you're right.

Of course that doesn't mean every time you think the market will go down, it goes up, but almost every time you are ready to puke over the market falling, it is close to a reversal. Or if you are ready to cash in your kid's education fund so you don't miss the relentless rally - its time to sell.

 

[FAB1]

good advice!

 

[WorkFE]

but almost every time you are ready to puke over the market falling, it is close to a reversal.

For me it is because I do not have a grasp of my pain threshhold. Same thing happens in reverse when you are standing on the sidelines. Very often you jump in a day or two early.
A very wise man told me unless you are doing this for a living you should not look at the markets everyday.
Can't remember his name but I met him at a homeless shelter.:worried:

 

[peterson82]

A very wise man told me unless you are doing this for a living you should not look at the markets everyday.

Totally agree. If you do, you worry yourself to death. Death doesn't make for a good retirement!

 

[jpcavin]

Ha! I sit in front of my computer watching as the tickers fluctuate up and down. :nuts:

 

[BigJohn]

Ha! I sit in front of my computer watching as the tickers fluctuate up and down. :nuts:

Sorry...no time to comment, I am busy with four different screens open tracking the yen, the S&P, the VIX, and my fantasy baseball team.

 

[jpcavin]

Sorry...no time to comment, I am busy with four different screens open tracking the yen, the S&P, the VIX, and my fantasy baseball team.

Makes me appear normal in comparison. :laugh:

 

[RealMoneyIssues]

Sorry...no time to comment, I am busy with four different screens open tracking the yen, the S&P, the VIX, and my fantasy baseball team.

Wow, now I don't feel so bad :blink: