Anger Is Bad Fuel
"There is no more stupefying thing than anger, nothing more bent on its own strength. If successful, none more arrogant, if foiled, none more insane — since it's not driven back by weariness even in defeat, when fortune removes its adversary it turns its teeth on itself."
— Seneca, On Anger
I have touched on anger and how it can spur us on to revenge trade and go full tilt and in turn we can lose serious money.
I have a very simple rule that I will never trade in anger. How can we expect to manage risk during a trade when we are not even thinking rationally? When we are angry, all our reasoning goes out of the window!
When we trade day in day out, using our strategies and we wait patiently for a potential trade that fully meets our criteria, we are at peace and calm and waiting to pounce! We have no outside interference because we are channelling all our energy into our strategies only and therefore concentrating fully on the job in hand.
Imagine this scenario. We make a mistake and break our rules; the classic can be not exiting a trade that is going against us and our loss quickly ending up at an unmanageable level. We know what we should have done and also when we should have exited the trade for a controlled loss, as per our rules! This make us angry and then we are not thinking rationally and this is when we need to walk away and take a break, before we dig ourselves an even bigger hole to try and get out of!
It is very hard to not become angry when you make a silly mistake by not sticking to your rules, because those rules are there for a reason of course!
Anger can burn up inside us like a fire and it is something we need to extinguish before we do more damage to our bank! We most certainly do not want to fuel our anger; so close down the pc and go for a walk to clear your head and dissipate your anger.
It happens to us all during our trading journey but "anger is bad fuel" that we certainly need to avoid as much as we possibly can.