ZF Capital

A trader may put too much energy into trying to protect a losing position, hoping that it will turn around, rather than saving energy by getting out of the trade. The unwillingness to face the truth and readjust to the new requirements of today’s market is a good example of the psychological defenses of denial and rationalization that lock the losing trader into repeating yesterday’s errors with yesterday’s strategy.

– Ari Kiev, Trading to Win

The losing trader cannot tolerate the stress of a changing market. While focused on disaster, it is difficult to process useful information and to trade wisely. Stress also reduces the ability to make decisions. As the trader loses, anxiety intensifies, producing behavior that may multiply losses. The losing trader increasingly relies on others because of anxiety and cannot make independent decision.

Another response to loss is to repeat oneself, to make more of the same efforts rather than to step back and reassess. The losing trader keeps trading the same stocks in the same way. Reliance on memories of past trading experiences and remaining stuck in an old trading style keep one from seeing what is happening today.

– Ari Kiev

There are several concrete things you can do to grasp what part your emotions play in your trading success or failure. For instance, keep a journal of your feelings so that you can track your emotions and more easily see our progress or setbacks. By having this detailed written information, you can visually follow your progress, and your notes will help you more readily find solutions to your problems.

– Ari Kiev, Trading to Win