Today I was talking with my brother, who is also a trader, about market sentiment.  At the moment, he is heavy on the bullish side with the belief that the when the market is full retard you grab and hang on until it stops, riding to victory, and while I agree with him on a level – I am much more cautious and don’t like chasing or feeling like I am not in control. I told him I am nervous about possible news over the weekend to which he replied, “You’re always nervous.”

It’s true. I am always complaining about hypothetical news based situations that would rain on my parade and destroy the planet.  I realized awhile ago that fear is my biggest obstacle trading the markets – by a long shot.  In my everlasting quest to become a robot and destroy all my petty human emotions I often need to step back and take a look at the bigger picture before I allow myself to make trading decisions based on irrational emotions and fear.

The greatest tool in battling emotions while trading is understanding what they are. Thoughts are powerful. A single thought can be responsible for destroying a good trade.

The mental part of fear always involves a projection into the future. It’s our reaction to something we think might happen that we don’t want. Or it’s our reaction to something we think will not happen that we do want.

News is irrelevant and inevitable, the only thing that matters is how your stock reacts to it. You need to trust ONLY your rules.  You know how to read charts, but do you trust them as you should?  If they don’t work and you are able to close out positions quickly there is no issue. Though, it’s always easier to say that than exercise it.

I missed most of this run on Thursday and paid for it today (Friday). Not with a lot of money but with emotional damage. Which is just as annoying.

This market is a crack whore and Europe isn’t suddenly magically OK overnight.  So, I’ll continue to be bullish but optimistically cautious until the market says otherwise, which maybe Monday. It doesn’t matter, but I won’t trade on irrational emotions.

“Fear is a primal instinct, not a function of higher brain faculties. When we logically think through our fears, we often find that they have no real rational basis.”

Clearly, this post is for me. I needed a reminder. If you found something worthwhile in it too, I’m glad. I’ll be posting some awesome charts over the weekend.

-Enjoy your evenings

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