Restless heart, chaotic hands
The first time I felt like I was done for wasn’t during a liquidation. Liquidations hurt, sure, but at least I know what that pain feels like. One day, I suddenly realized I was retaliating against the market.
Got my long position stopped out, then flipped short. The short got wrecked, so I chased back into a long. Each trade was faster, heavier than the last. My eyes were bloodshot.
I lost track of how many times I got stopped out, when a voice popped into my head: What the hell am I doing? I couldn’t answer that.
At that moment, I knew I wasn’t trading anymore. I was battling with my own emotions.
During that period, the market was flat, stuck in a range, paralyzed.
All my strategies went down the drain, one after another. A normal trader would have pulled back. Not me.
The more I lost, the more I traded; the more I traded, the more I lost. With every cut, the next cut came faster.
It wasn’t that I saw an opportunity. It was a voice inside saying: Get back the pride you just lost.
This phenomenon has a name: emotional trading.
Another term is "loss aversion." They say the pain of losing a dollar takes at least two dollars to make up for it.
So, I’d do something particularly **: place bigger bets to recover from the last round.
Livermore said in his later years: "My greatest enemy isn’t the market, it’s myself.
#EHT