‘I want to give up’, ‘I’m not cut out for this’….Throw in a few ruthless words as I have countlessly fallen into that category. Since I started it took me a few months to grind out a good month to give it all back and some in a day. How is that possible? In my mind I had a daily stop loss.
I’ve always been a competitive son of a gun, hence I love sports. Giving up is not an option for me. I should say losing doesn’t go down well at all. However when it comes to daytrading this WILL punch you right in the face. So far I have had probably 20 or so such days ( maybe more ) as I have started my journey 3 years ago. I have a great week or two, then BAM! I can’t take a small losing day, so I overtrade and trade some more and then some and lose 10-20% of my account in a single day.
After reading every mental trading book, which have helped and getting a mental coach, I found myself still in the same boat but a lot less deeper. I still continued to have mini blow up’s and questioned whether I will ever stop, as it became a distinct pattern.
So how do traders have the discipline to stop trading when their daily max loss is hit? Mine was 3%. This is a true gift I thought I could never have, and hence after 20 or so disastrous attempts at trying maybe I should give in.
Not so fast! When a basketball player, or a soccer player are having a tough day there is a coach on the side lines that can take them off for another teammate. As a daytrader that coach needs to be your broker or trading platform as we are not blessed with a in house risk manager like a prop firm. When that max stop loss hits, your account is frozen and market orders close any existing or pending positions.
As described in his book Atomic Habits (by James Clear), use friction as a way of breaking a bad habit. Eventually the urge to revenge trade or trade till your green will cease over time.