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The most common vice, or negative feeling, that novice traders experience on a consistent basis is anger. Even professional traders will at times experience anger. However, whereas novice traders will direct their anger at the market, their broker, or ''the pit," professional traders will typically direct their anger more at themselves than at someone or something else. |
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Anger is an intense feeling of displeasure. Often the common behavior displayed is belligerence, where the angry individual becomes very hostile toward what is perceived to be the cause of pain. Many traders will attempt to punish or seek revenge against the market for their pain. The physiology of anger includes changes in breathing, body movement, and of course speech. In every part of the world, an angry person sticks out like a sore thumbamazing in a way! Mentally an angry person is unable to think rational thoughts or perceive reality. This is why traders with an "attitude" will always blow up their account within a relatively short period of time. |
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There are a multitude of reasons that traders become angry. The most common is that their expectations were not fulfilled in the way they desired. As we have seen, a novice trader usually has many expectations on one trade. Typically the expectations are unrealistic, thus guaranteeing the trader more pain when the expectations are not met. This is in stark contrast to a professional trader, who normally has only one expectation on any one trade. Can you imagine what that expectation might be? |
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Another reason that traders are likely to become angry is that something they value (or need) is being violated or ignored. The most likely thing that is being violated is their equity or some highly valued belief. Highly valued beliefs among traders include the value of hard work, how success is obtained, how things should be, how perceptive or intelligent they are, and how great their methodology appears to be. In addition, if their basic needs are being violated or ignored, they will experience a lot of anger. If they are trading with money that they can't afford to lose (normally the case), they will become very angry when that money is lost. |
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In other words, if traders carefully develop and back-test a methodology over a period of months, and it proves to be very profitable on paper, they will come to value it highly. When they actually start trading it, they will be very proud of any profits they capture, and they will normally blame someone or something else for any losses. Now if their account starts to lose ever-increasing amounts of money, they will become fearful and then angry. This is because their methodology (something they value) is being threatened by the market (another perceptional belief). Since traders value their money, as it begins to decrease they will focus their anger on the market. In addition, if |
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