New traders are still nervous…
I’ve got countless messages in my inbox from people watching their accounts bleed lower, trade after trade.
The real reason your account keeps bleeding…
- It isn’t the market.
- It isn’t your strategy.
- It isn’t the summer chop, or the tough tape, or the one setup that refused to cooperate…
I’ve seen this over and over again with new traders.
It’s a specific issue. And I’ve got a simple fix.
Last week, my students and I banked on a Walmart Inc. (NASDAQ: WMT) trade.
If you lost money or missed the trade… I know why.
It might be a rude awakening. But the sooner you come to terms with this issue, the sooner you can fix it.
Today’s the day you start operating like a trader.
And your account will show it.
Your Feelings Are Costing You Money
The problem is you.
More specifically, it’s your emotions. Until you get a grip on them, nothing else I teach you will stick.
Fix your emotions, and it will fix your trading.
Emotions can make us nervous, so we stop out of a position that would’ve turned into a massive winner.
Emotions can make us scared, so we skip a perfect setup because we don’t trust ourselves.
Emotions can make us greedy, so we size up too early and turn a decent idea into a total disaster.
- You get too happy.
- You get too sad.
- You ride every tick like it’s a verdict on your human worth.
This thought process used to run through my head:
“If I win on this trade, I’m a successful person who understands the market. If I lose on this trade, I’m a worthless stupid idiot.”
That mindset doesn’t make us money…
I made the same mistakes when I started. Every trader does. The difference is I learned to strip my feelings out of the process. I only focus on the math.
That’s the whole game.
Small Enough Not to Care
There’s a simple fix for this common issue. Simpler than social media gurus want you to believe.
Trade smaller.
When you buy an options contract, you’re not buying Apple and tucking it away for a decade. You’re buying something that spikes like a rocket, but can also drive straight into the ground.
And understandably, our emotions are easily triggered…
That’s why I control my risk while positioning for maximum gains. No emotions involved.
Think of it like trying to turn $1 into $3…
When it comes time to trade, risk an amount that allows you to sleep at night.
Put $100 into a trade. If it works, fantastic. With this volatility, a $100 position can easily reach $500.
If it goes to zero, you lost $100 on a high-probability setup, and the next trade should make some of that cash back, if not all of it.
Do you really care about losing $100? If so, try risking less than $100. Or build up your account until $100 is an acceptable loss.
Now think about it from an irresponsible risk scenario… You put a third of your account into that same trade, and suddenly every tick feels like life or death.
Your palms are sweating. You bail at the first red candle. And your account blows up because of your emotions.
If you’re that emotional about a trade, it’s because you did it wrong. You went too big.
Fix your size, and the emotion disappears on its own.
Why You Never Panic Out of a Swing
Somebody in our chat room stopped out of a swing trade this week. And we need to address it.
A swing trade is a position we’re deliberately giving room and time to work. We enter knowing there will be noise before the payoff. The entire thesis is patience.
Stopping out on the first dip isn’t risk management.
It’s fear disguised as caution.
Surprise, I don’t love sitting through pain either. Contrary to what some of you may think, I like it when a trade works right away. But when I put on a swing trade, I’ve already decided how much room it gets and exactly how much I’m willing to lose (the price of my contract).
The decision gets made before my emotions show up, not in the middle of the trade.
That’s how I can roll a position for longer, buy more time, and stay calm while everyone around me loses their minds.
The math was done in advance.
My emotions don’t get a vote.
Don’t Fall in Love, Don’t Hold a Grudge
Don’t fall in love with a trade. It doesn’t love you back.
When the reason you got in is gone, when the data stacks against you, the trade is over. Get out and keep your inventory moving.
But if you get out, don’t hold a grudge against the setup…
Remember, these trades don’t know you exist. They’re not your ex-girlfriend, ex-boyfriend, or estranged family members.
These are just numbers on a screen. Nothing more.
Every position is a transaction. The second it turns personal, you’ve already lost, even if the P&L hasn’t caught up yet.
Trade Like You’re Dead Inside
That’s my message today, and I mean it literally.
Trade like you’re dead inside.
That doesn’t mean I walk around in a dark cloud, too depressed to frolic in the sunshine… It means I feel NOTHING.
- Feel nothing when you’re up.
- Feel nothing when you’re down.
Size every position so that it’s small enough that a single outcome barely registers, then let the strategies do the heavy lifting.
The market doesn’t reward traders who care the most. It rewards traders who care the least about individual trades, to grow their accounts in the long run.
I’m going to keep beating this into you until it lands.
Some of you will get there. Some of you won’t, and you’ll chase another mystical shortcut that doesn’t exist.
That’s fine with me. Everyone is free to make their own decisions.
But for those of you who actually want to improve and grow self-sufficient, cut your size, kill the feeling, and start trading like a machine.
Your account will thank you.
Stay Street Smart,
Jeff Zananiri
*Past performance does not indicate future results, Not typical.
