Emotions & Trading
In my time trading I've been put through the emotional ringer time & time again.
You are supposed to keep emotions out of trading. Emotional decisions usually lead to poor results. But can you really keep emotions out of trading?
As humans, emotions drive us. If you felt nothing, an automaton, a robot there would be no life in living.
But in trading, too often emotions destroy capital & confidence.
The up/down cycles of the past few years have been breathtaking. 2016 started off with the worst start to the stock market in history & was immediately followed by the biggest short-squeeze in history. This year has featured the most 1% moves in the major indices since 1938 and is on track for the most 1% moves ever. In volatility like this you can rest-assured that emotions are running high.
The usual suspects such as Fear & Greed run the show. Compound this with a host of algorithms & HFT and what you encounter mind-boggling price-action day-after-day.
My strategy for a while has been to trade with a global-macro view based on fundamental trends. I have been trying to catch a major trend-change, a bear market.
Unfortunately, this strategy has only resulted in pain. Extreme-Highs followed by even more extreme-lows... My strategy isn't working.. The fundamentals don't seem to matter anymore in this digital age of markets & government intervention.
Yesterday Mario Draghi unleashed his ECB Bazooka on market which resulted in complete chaos across all asset classes. The Euro, initially getting hit then made the biggest reversal of all time finishing the day substantially higher. People are getting blown-out left & right in this logic-less market. I should know, I'm one of them.
After catching the downdraft in January I let my overconfidence get the better of me & have since given back all of those gains & more.. I'm in dire-straights now. Unsure if I can even continue trading..
Oil has the most production, the most inventory in history. Cushings is rapidly filling to capacity even as we outsource oil to Panama for storage. Oil is well off its lows & today was trading north of $40.
Business is struggling, earnings contracting but none of that seems to matter to the markets. They levitate as if by magic. Yesterday was one of the biggest craziest doji days I have ever seen. Finally people had a technical reason to sell. Instead, what happened was the government PPT manipulators worked hard all night to paint the tape much higher on non-existent volume. Today opened above yesterday's highs.. Gap & go as shorts scramble to cover.
I don't really know what I'm going to do.. It's above SPX 2000 again & I told myself if it closed above SPX 2000 I would cover & quit the markets for a while to let them sort themselves out..
I have to do something because the market is killing me.
I was at account ATH just weeks ago & now the market is at 9wk highs & my account has been massacred..
I'm really embarrassed at how badly I've fucked up this year.
I'm completely amazed how the fundamentals seem to not matter to the market. It's all smoke & mirrors..
I really just don't know...