The Empowered Trader by Mark Fechner

Learning to Respond to the Market, not just React

Series: A Trader’s Diary on Fear 2

with 3 comments

So when last we spoke about Fear we were in the water with the shark from Jaws hoping to hear the theme song. But do we really need to have a theme song? Don’t we already have internal indicators that take care of that? Before we get into a discussion about Fear, I think we need to lay some ground work.

As humans we are ingrained with the need to have an emotional commitment to all our decisions. For example, deciding what to eat for breakfast is going to require an emotional commitment. Hence, if you are rushed and need to get out the door, the decision to grab something quick can be as “right” a decision as the leisurely Sunday afternoon brunch. If we were to reverse those two decisions, the leisurely breakfast with the quick one, given the same circumstances, we wouldn’t be nearly as happy with our decisions.

The reason the decision feels “right” is because there is something of a greater value that we’re holding up as a standard. Perhaps the quick breakfast is chosen because we need to get to work or we have an important appointment to keep. That holds the greater value and hence we feel good about the decision.

Same can be said for the Sunday brunch. The desire to take some time for ourselves, perhaps spend it with friends and family, or we’re simply tired of too many quick breakfasts, is the greater value that we are holding dear. Either way, each decision has the feel of being “right” and we’re happy we made it.

Now I grant you the emotional weight of breakfast is not the same as investing in the market. What we can take away from our breakfast dilemma is an understanding of what is important in our lives and making choices that are in tune with those values. I’ve talked to hundreds of traders over the years and a common theme is the quest for the holy grail of trading. That “thing” (replace “thing” with indicator, software, course, advisory), outside of themselves, that will answer their trading woes. These searches, although profitable for some, typically yield poor results for the individual leaving the trader to take up a new quest in search of a new “thing” (more on that in a future posting.)

My ‘a ha’ moment as a trader came when my focus turned inward on my trading decisions. That the battle for success lies between my decisions and values that I either don’t understand or can’t acknowledge. Our feelings are a gateway to that understanding and acknowledgement.  Being aware of those feeling is the first step.

In the next installment, I share my insights about the use of those emotions.



Written by etradingcoach

February 20, 2012 at 12:08 pm

3 Responses

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  1. […] So what do we do? Stay tuned for the next installment. […]

  2. […] As it turns out, my skepticism was well founded.  Though my continuing education as a trade and a coach, I’ve learned that to divorce ourselves from our emotions is impossible.  As humans, we need to have that emotional component in our decision process.  All decisions.  I wrote about this as part of a series, A Trader’s Diary on Fear. […]

  3. […] In the previous posting, I talked about the role of emotions in our decision making process. The feeling that we are making the ‘right’ decision is part of who we are as humans and really can’t be separated from the cognitive process.  The use of those feelings, that feeling of making the ‘right’ decision, is what I’d like to expand on in this posting. […]

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