Seth Godin published a post last week called The Existential Crisis (and the other kind). In that post, he explained that while a crisis might mean the end of a project, it almost certainly won’t mean the end of your life. We don’t live in that kind of world anymore, for the most part.
This got me thinking about my tendency to overreact to pretty much any situation, but extremely good and bad situations in particular. I wrote about my mini-meltdown when TRN split a few weeks ago. I also jumped up and down like a little kid when AGN put in a huge gain the day after I bought it.
I generally overreact to pretty much everything in my life. That makes me very similar to the people Seth describes that treat a failing project as if their life is coming to an end as well (my wife will vouch for me on this one).
This is one of my biggest weaknesses as a trader.
Successful trading requires that we have the ability to keep our emotions under control. Obviously, this is easier said than done. I need to get better at it.
So what’s the best way to distance myself from my trades and get better at controlling my emotions? Hell if I know. I suck at it.
The only thing I can come up with is that I need to continually remind myself that my trading results do not define me as a person. Whether good or bad, no individual trade or life event has the power to ruin me.
Even if I blow up my account tomorrow, I would just start over again on Thursday. My focus and determination make success inevitable and failure irrelevant. The rest is just insignificant details.