Response to a question on YTC Facebook on 29/1/14:
Q. How do I work on emotions?
In most cases emotional issues are not actually the problem. They're highlighting the fact that either (a) your strategy is flawed, or (b) you don't have faith in your strategy, or (c) you're trading too much size.
Correct any of the above first.
But assuming that the above areas of trading are all fine, and you're finding that your emotional response to risk is consistently leading to inappropriate actions:
1. Consider it a whole mind/body system. Manage the body first – eat better, exercise more, ensure sufficient sleep.
2. For emotions… first awareness of the problem and then acceptance. Admit your fears. Notice them when they arise during trading. Welcome them and thank them for providing their information (sounds stupid I know… but do it… it takes some of the edge off the emotion).
3. Develop pattern-interrupts for whenever you observe fear, in order to prevent it from leading to out-of-control behaviour. ie. strategies to ensure either minimisation of risk during these periods of emotion, or avoidance of risk through separation of yourself from the markets.
4. Consider the original source of these fears. It pre-dates your trading! There is great potential for self-growth here.
Best of luck!