The Nemesis of Trading Options
Emotions are said to be a trader’s worst enemy. Our Achilles Heel.
They take control of us and cloud our judgment. They force us to make mistakes and decisions that end up hurting us in the end.
That’s why people introduced trading systems, computer programs, and crazy complicated algorithms. – To take the emotions out of trading.
But I am still human, and so are you. So we are still liable to make mistakes based on our emotions.
In one instance I am knowingly letting my emotions get the better of me. They are making me violate one of the cardinal rules of options trading.
The rule says that you should not hold a grudge against a stock. You do not need to make your money back from the same stock you have lost money on. It is better to move onto another trade.
Online Stock Documentation
I can’t do that. I have documented every stock, etfs, and index I have traded over the past few years along with if I made money on them, or lost money.
Then, in my personal account, I look at the ones I have lost on and try to “get my money back”. I want to have all positive trades. Meaning that if I lost $87 on SRZ back in 2009, I will look to do a trade on it now, that will make me at least $88 so I can wipe off that loss.
Sounds silly if you think about it rationally. But since I am not a Vulcan I continue to do it.
Since these records also incorporate my day trading days, you can believe I have a whole bunch of stocks to get my money back from.
But you know what? It adds a little more excitement to the game. I know you are not supposed to treat a stock like an adversary, that my real adversaries are the other traders, but it is fun.
What about you? What ways, if any, do you let yor emotions get the better of you?
What trading rules do you break on purpose? Please let us know in the comments section below and be sure check out our previous blog posts for best options advisory service and awesome tips on how to do option trading for a living.
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