No. 1 Emotion That Kills Trades

2020-04-22 | Simpler Trading Team

From John Carter, Founder of Simpler Trading

(This article is an excerpt from a piece written by John Carter and is being presented over the next several weeks. Watch for John’s insightful takeaways on Wednesdays.)

In my own life, I’ve seen people sue their business partners, shout at their spouses, and send career-altering emails.

I’ve seen revenge trading after a big loss, physical fights, a relapse on drugs... all because of anger.

Tiger King takes these examples of self destruction to the next level. (“Tiger King: Murder, Mayhem and Madness,” is a docuseries about the eccentric life of tiger breeder and zookeeper Joe Exotic.)

Tiger King lays out a very clear path for what can happen when we allow anger to rule our decisions. Many of Joe’s problems stemmed from his prolonged, unbridled anger at Carole Baskin.

This rage influenced a chain reaction of decisions that ended with his going to prison.

How would his life have turned out had he been able to set that anger aside and focus on his zoo?

The best book I’ve read on managing crippling emotions is “Letting Go: The Pathway of Surrender” by David Hawkins.

It has saved me, and many people I know, on many levels.

When it comes to the markets, letting anger seep into your trading plan can be disastrous.

Find a way to “let it go” before executing a trade decision.

Don’t make trade decisions when emotional, especially when angry.

We Saw: end of a two-day market tumble — 

  • Oil rising after historic negative pricing
  • Airlines burning through cash reserves
  • A welcome market rally

We’re Watching: … whether market is not recognizing economic reality —

  • Any trade opportunities in erratic oil prices 
  • For clear signs of people returning to work
  • If false bottoms are shaping up for severe drop

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