Think Like A Trader Blog

Thursday, 1 December 2016

The Latest Blog Post In Our Beginner Trader Series by Craig Sanders

Hello Traders.

A fairly unusual venue for the writing of this fourth blog post. I am sure you will all join me in wishing Craig a speedy recovery.

I hope you've all had a great trading week!

James Orr

Blog Post 4 - Craig Sanders


Hi and welcome back, this time from my not so comfortable hospital bed, rest assured I’m ok just high on pain relief maybe. Never in a million years had I ever imagined id be writing a blog post from within hospital, but these minor obstacles happen I guess and the key like in anything is to push on forward and overcome the challenge at hand. I do not have my diaries at hand nor my computer with me but I refuse to take the easy road and spoil the sync of these blog posts for those of you that do read them and find any value no matter how low I feel I have decided to plug away anyway, swallow the concrete and punch on with this post/email draft the best I can from my phone. I have so many things Id like to discuss and could do this alone without the need for my diary for every post, this is one of those moments and still a worthy subject to raise.

Blast from the past

Topping your demo account back up just because you can.

SOME wont but the Majority just may! So, on this particular topic I certainly fell under the ‘majority just may’. (This could potentially be worded the opposite way around with trading)

Rewinding back to the time where I started off on my first ever demo account with my brokerage platform IG. For any of you un aware, with IG and as with many other brokers, up on new account registrations you get 10,000 pounds/dollars to use as free demo funds. I call this monopoly money, essentially it is exactly just that. It’s a nice, appealing, healthy chunk of an account balance in toy money at your disposal.

Logging into my brokerage account (Welcome Craig), at the top of my screen catching my attention first and foremost is the whopping account amount of a (10,000) figure. This is the same for every individual with an IG demo account, if chosen to be used that is!

So, after a number of winning trades at the start of my trading journey I also had various spells of losing trades as you can imagine.  This in turn making my balance some days appear in the positive (10,350) and on other days as negative (9,980). There was a period of 2/3 weeks where my funds had slipped to around the 9,700 mark and it seemed to just sit there idling for what seemed like months, but realistically was only around 2 weeks. This eventually caught my attention as I remember it beating me up mentally, day by day chipping away at my mind, ‘I’m losing still’.  It’s true, I could handle the fact I was given 10k but now I’m sitting under 10k, ‘not acceptable Craig mate’, fix it I remember telling myself with that denying guilty conscience hovering over me. Obviously, impatience at its best.

A few more trading days had passed by in the market and I was still sat below 10,000 pounds. “How” I remember mumbling to myself still in disbelief and fighting the guilt of wanting to top my account up but knowing it’s not the right way to learn.  The frustration and the outbalance of my logic (at the time) over my trading plan were becoming more dominant in my mind, yet the logic I later realised was emotional triggers setting me up to seek safety and comfort for that particular moment and wasn’t true logic in relation to trading at all! However, there I was still trying my hardest to ignore what my thoughts were speaking to me and yet I couldn’t shake them and decided to break therefore showing myself the pathway to have a play around within the account settings page and out of curiosity see if I could possibly manually adjust my balance and return it to the default of 10,000 pounds again. (nobody will ever know anyway)!!

Finally finding my ‘at the time’ comfort, I had figured out how to manually add or subtract any value I wanted to my demo funds, so I did just that. I had finally broken, the devil within got his temporary fix, I raised my account back to 10,000 and remember feeling instant satisfaction. I could have raised it to 15,000 or 20,000 but I never. I only wanted what I started with and surprisingly that small difference gave me a euphoric buzz, at least for that remaining day anyway. “Wow,” I say when I still think back, a euphoric buzz over being able to affectively cheat myself by not accepting losing and then doing the easiest thing in the world by rising my balance just so I could feel in control again. When I think back to this time, I find it laughable and amusing that I still buckled under the lack of being in control and the lack of acceptance with uncertainty.

Trading moving forward with this new recent ’reset’ mode that I was able to manipulate, luckily continued to rise. Rise not for the best, but just how that particular time played out for me and it continued to rise for some time. The point being all along that what I had done was really pointless and nothing more of a ‘sugar fix’ so to speak. It was nothing more than giving a dummy to a crying baby soaked in honey just to silence it! A shore fix but for how long??? And was it a true solution to what I was chasing overall??? Certainly not, it was just easy!

Had I have left my 9,700-account balance alone, my trading over the same period of time could have gradually built back up over a longer period of time and would have still been in positive equity given my emotional state not altered. However, as a beginner and on this new journey into trading I was clearly caught in an emotional state that had been triggered at that time due to the losses that placed me below my 10,000-head start.  This of course made me act in the way I went on to do so. This was me hiding behind my mental pain but unwilling to accept I was doing just that, eventually thinking it will be forgotten.

UNCERTAINTY - clearly I wasn’t a fan, maybe I could trick myself? Its only play money.

EXPECTATIONS – clearly I had stronger expectations of winning over losing, normal, isn’t it?

CONTROL – clearly trying to control my individual trade outcomes.

The above behaviour I lived out basically highlights some concepts of how I could not accept market uncertainty at that particular time. I clearly had very strong expectations of winning trades over losing trades and I was trying to be in control of each individual trade outcome and failing to accept losses at all costs. These are all huge problems each beginner trader may have to come across and battle in their own heroic way as they build their own puzzle on mindset as they drive deeper into their trading journeys all at their very own paces.

I felt the need to briefly touch on the ‘oh so simple to avoid’ topic just because it’s something if you read for a first time, then you would usually read and laugh. Yet I’ve experienced it, I did so even knowing it was stupid to be doing so and at the same time of doing it :-)  - so I’m either plain stupid or just showing how your mind as a funny way of turning on you when in emotional pain and blinding any logic, usually resulting back to the fear of losing and all the causes above I’ve mentioned.

This became apparent for me to want to write about due to having an experience of turning to a live account earlier on in this year and having a flashback moment of the ‘nightmare memory bank’. Yes, that’s right, my first ever live trading account I had an almost similar repeat performance!  and without diving into it too much here, the minute I realised emotions were live again were because the dreaded laughable memory of topping my account up back in my demo apprenticeship days haunted me. I instantly sniggered and realised that in order to top my live account back up id need real money, fact! There was no + button to tap and see the digits rise this time.  This soon became apparent that this wasn’t possible nor was it the right thing to do anyway. I took my lesson from my early days (because I’m a trader veteran) ha, I controlled my emotions and continued trading over the weeks ahead. In turn starting to grow monthly equity curves of 7% then 14% and so on…. Point being, I could have thrown more monies into the account in order for a ‘quick fix’ or ‘feel better’ moment again, yet realised from past mistakes that this isn’t the correct thing to do moving forward so sucked it up like a good little princess, learnt and finally come good and still increase my account sticking to my PLAN.

It’s crazy because most may never experience this but like the genuine guru’s all say, getting the bruises and learning is far better than being told what to and what not to do. Human mind does not retain most of what is shown to them. Only when self-research is done then you retain knowledge. Once you have certain knowledge then you can build upon it. not the other way around.

So instead of me continuing to bang on about this topic and drive you all around the bend, although I don’t care as I have to stay awake for further blood test well into midnight, so suffer with me ha-ha… 1 of my main learnings from it all was how I started to first learn what being an objective observer of my own thoughts and actions was really all about. So even if we forget the above ‘demo’ topic, if 1 person out of 100 reading this (I’m confident in numbers) takes away something that makes their brain tick and one day when attempting to make an emotional error without awareness!!! and this stops them and makes them think, then my work here is done. This is a door that when reached, I believe continues to keep opening as it still is for me today :-)

Happy trading guys and until next time….

Ps - I’m beginning to sound like an affiliate to IG, rest assured I’m certainly not :-)

Also… There is no such thing as a STUPID QUESTION. If you are stuck and feel the need, reach out as I have many times and James will service you the best he can, that I’m confident in.


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