Jan 31

My Top 10 Favourite Self-Destructive Trading Thoughts

Finally – after weeks of hand cramps, crossed eyes and other nerd-induced unattractiveness, my testing is complete.

I’ve finally finished manually testing the FX 1H method I developed, and on Monday I started trading it live.  I really enjoyed testing it – the method made sense to me, gave me clear entries and exits with defined rules regarding each, and it felt good (enough) emotionally.

So I was understandably pretty keen to turn the money machine on and let it start churning out the cash.

Unfortunately, on the very first day of operation my lovely, shiny new method started making scary grinding noises and blowing out  a swirly mess of black smoke.  Crap.


My house on Monday. Sadly, my insurance doesn’t cover faulty money-machines.

It turned out there was something wedged in amongst the workings of the machine.   After much pulling and wrenching I managed to get the mangled object out, only to find it was, in fact me.

The Return Of The Evil Trader

I always seem to screw up the first day trading a new method.  It’s a weird thing.  It’s as though my whole internal being spontaneously rebels and shrieks and twist and turns and doesn’t want to go through with it.

It seems I have a freakishly noisy anti-trading persona residing in my head that makes itself heard at particularly inopportune moments.  Either that, or I might be possessed by Satan.

My Top Ten Destructive Trading Thoughts

Taken From Monday.

  1. That resistance is way too close, I really shouldn’t have taken that signal. 
  2. I should definitely trade that breakout. My method doesn’t trade breakouts,but that’s a really good-looking trade.
  3. I’m long, this is a downtrend.  What the heck was I thinking?
  4. This going to be a loser, for sure.
  5. Price has ripped so far away from me – please don’t turn into a signal.
  6. This is clearly in a congestion range.  I’m going to ignore that signal and wait for a breakout.
  7. Buying spikes – this short is doomed.  See ya, money.
  8. Yippeee! It’s not turning into a signal!
  9. Ooh, nice profit – I should take that while it’s still there.
  10. Take the profit. TAKE THE PROFIT.  TAKE THE DAMN PROFIT!!!!!

As you can see, I was in fine form.

Thankfully, despite my mind being absolute crap and tormenting me every step of the way, I stuck to my plan like glue and actually ended up trading well.

But it fascinated me to watch and listen to myself trade.  It became very clear that there is some part of me that is quite intent on sabotaging my efforts – a part that would have been far more successful a couple of years back.

We all have an Evil Trader inside us that wants us to fail.  He sits there and watches, just waiting for the right moment to strike.

The problem most traders have is that they don’t realise he’s there.  They are so used to hearing his voice that they can’t distinguish their own thoughts from their Evil Traders and as a result their trading reflects their great big internal mash-up.

Ways to Recognise and Defeat Your Evil Trader

  • Have a plan.  If you don’t have a plan, your Evil Trader has zero boundaries and will take over entirely.  When you have a plan, you’ll start to notice him telling you not to follow it.  You’ll hear him whisper seductive anti-plan ideas that sound and look perfectly reasonable – except they aren’t in the plan.
  • Have an Evil Trader Journal.   The thing with ET is that often his ideas sound great and are really hard to ignore.  So as not to discard potentially good ideas, keep a log and after each trade is closed make a note of whether the idea would have been positive or detrimental to the outcome of your trade.  After a period of listing these ideas you’ll be able to notice that a) ET is wrong and he needs to shut it, or b) his idea deserves some further testing as it’s possible it has merit.
  • Try to make your method as water-tight as possible.  A signal needs to be a signal without a shadow of a doubt.  An exit needs to be a definite exit, no two ways about it.  The more black and white the better, as your Evil Trader loves to second guess your judgement.  Planting seeds of doubt is just the way he rolls.
  • Make a check-list for those times when you’re just not sure.   There will always be times when things just don’t seem so clear-cut.  This is your evil trader’s very favourite moment to strike.  You need to be armed with your weapons of ET destruction – aka, your check-list – to guide you through.  Having a checklist on hand allows you to objectively determine whether what you think you’re seeing is in fact what the market is presenting.


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