Do you choose pain, pleasure or both?

[MC]

I just watched a video and something clicked on the issue of taking profits early. 8)

First let's look at why I (and many others) have this psychological issue of taking profit early...
1) Fear of being wrong and to end the pain of not knowing what will happen next.
2) Feeding the greed with quick profit to gain temporary pleasure.

I have known of and clearly defined my above issues some time ago, but breaking down your psyche and rebuilding is a difficult task to do by yourself. I still have some work to do myself, but I am getting better as I practice and focus on the below facts. Maybe they can help you also?

1) Focus on remembering that we can't possibly know whats coming next and just to use your edge and execute.
We have back tested and clearly defined the edge to prove it valid and profitable, now it's time to use the edge to make money through consistent execution. Fully embracing the risk and truly believing we don't need to know what's next should remove the fear and pain we create from issue 1.

2) Then think back to all the times we have taken $30 early to feed the greed, only to realize when it's too late that the move was worth exponentially more. :-\ Had we just executed the edge those few runner trades would have more than made up for the stop outs and we would be making great money. It's not small profit often that will make us net positive, rather just one good move caught and executed on could make a traders week, month or even make the year. The short term pleasure turns to negativity when you realize you are not executing and leaving $$$ on the table, costing you net profitability!

There's a cycle in place stemming back to the values we were raised to believe in. In the market these values are incorrect and they need to be broken in order to succeed. I will continue to work this out and I will become a successful trader. ;D

To my point about the speaker in the video, something he said made me think...
Don't look at profit as something that causes emotions, look at it as a risk free trade.
A trade in the green is a risk free trade, all you have to do is manage it.

Good trading and Happy Easter,
MC

[theyoungdude]

damn good post MJ.., i know myself and probally a few others are guilty of this..., good to break it down and analyze why 8)

[MC]

I thought this fit well into this thread, just a nice depiction of emotions in market cycles. I found it while sifting around on the web.

[MC]

Enacting change is 90% motivation and 10% capability. People focus on what they "can't do" or "don't want" rather than focus on what they DO WANT. Focusing on what you do want will help you commit to your goal and will provide motivation and fuel you to achieve your goals!

An example plan for people that are driven by emotional pain...

(Step 1) "I don't want to be fat", should be changed to "I WANT to be fit". Words are instantaneously interpreted and subconsciously charged with energy. Words can inspire us to create action, or paralyze us into inaction. The words "don't want" shift our focus to negative feelings/energy and have a huge impact on our mindset. Using negative words and imagery sets up and most often predicts failure. Creating positive energy is extremely crucial to success.

(Step 2) For many people, pain is the dominant force in their mind. For these folks pain is so bitter they will do damn near anything to avoid the feeling of pain, even at the expense of pleasure. This group should use the energy their pain avoidance creates to motivate and propel them towards their desired outcome.

So it would go like this...
I have fully committed to the mantra "I WANT to be fit".
I avoid pain at all costs.
I feel pain when I am NOT working towards being fit.
Therefore to avoid pain I MUST work towards the goal of being fit.

Use positive wording to set and commit to a goal. Then use pain as the motivation that drives you to the finish line.


An example plan for people that are driven by emotional pleasure...

(Step 1) This step is the same in both pain AND pleasure motivated individuals.

(Step 2) For most people, pleasure is the dominant force in their mind. For these folks pleasure is so enticing they will give up damn near everything to secure the high pleasure brings, even if it's temporary and will lead to great pain. Gamblers and addicts fall into this group. This group actively seeks pleasure and should harness that power to motivate and propel them towards their desired outcome.

So it would go like this...
I have fully committed to the mantra "I WANT to be fit".
Pleasure motivates me more than anything, even pain.
I feel pleasure when I am working towards being fit.
Therefore to gain pleasure I MUST work towards the goal of being fit.

Use positive wording to set and commit to a goal. Then use pleasure as the motivation that drives you to the finish line.



So you see, it's first about setting up positivity and truly committing to a goal. From there it's about finding what really drives you, (pain or pleasure) and linking that emotion to the goal. That link then provides motivation and sends you on your way to success. This is a method of re-programming your mind and using what supplies you the highest motivation as a catalyst not relying on will power alone which never works.