Sometimes traders freeze up in the face of some market event. I had that myself, which led to the loss of my first deposit. Many years later, I remember it as if it were today: I drew a trend line on GBP/JPY and set an order as I thought right above it. It was Sunday evening - in a moment the market was about to move.
In a moment it did. For an hour I watched it slowly but steadily move towards my trendline, then touch it....
Suddenly, to my surprise, I saw that the order was triggered for me! This is not how it was supposed to be! It was supposed to trigger only after piercing the line - and on the chart it touched it perfectly!
Emotions, stress appeared and... I froze. I simply did not know what to do. I watched helplessly as the market fell within a dozen minutes.
Dozens of thoughts flew through my head. I was unable to make the slightest movement. I froze with emotion like an animal blinded by a car headlight at night on the highway.
These were my beginnings, absolute beginnings. I knew there was such a thing as SL, but I didn't consider it necessary, after all, I was here to make money, not lose, and "the market always turns"! Right? :)
This time it did not "turn" and I scored the first margin call.
I was surprised and then heartbroken.
A colleague in a similar situation watched six thousand dollars evaporate from his account in 9 minutes, having previously tripled his account (as did I at the beginning), he was unable to do anything.
How to deal with such a situation, when we are suddenly surprised and "freeze"?
3F reaction
In situations of very high stress, we have 3 types of natural reactions of the body. Let's call them "3F": fight, flight or freeze.
These are reactions inherent in all living beings. The first two are well known: living beings, when faced with a threat (such as an attacker), flee, engage in a fight or freeze in immobility. This is a survival mechanism, encoded deep in the genes.
However, in market situations, as the stories above indicate - this is a rather undesirable reaction.
Dealing with such a situation consists of two elements.
Prevent the "freeze"
First, prepare yourself mentally for what can go wrong. Prepare for the fact that the order may run you differently than you want, not where you want it to. Your electricity or internet may go out (I recommend UPS and backup connections). There may be a sudden huge amount of traffic due to news (I had this happen too, I entered without checking the news calendar...).
Knowing already several possibilities of "what can go wrong" you are in a completely different situation, the chances that something surprising will happen and you will "freeze" quickly decrease.
Expect the unexpected. And when it occurs make a quick assessment of the situation and be ready to take immediate action. If you think through in advance what you would do in a given situation you have a good chance of acting correctly. And the situation will not find you "with your pants down".
Stop the reaction
If you see someone in such a situation shout loudly or if you are standing close push them, this is usually enough.
Apply the same to yourself: shout loudly, use the "Polish universal word for k", get up abruptly from the computer. Clapping your hands loudly works well.
Any loud or violent action will break the "frozen" state and unlock your mind.
In a moment it did. For an hour I watched it slowly but steadily move towards my trendline, then touch it....
Suddenly, to my surprise, I saw that the order was triggered for me! This is not how it was supposed to be! It was supposed to trigger only after piercing the line - and on the chart it touched it perfectly!
Emotions, stress appeared and... I froze. I simply did not know what to do. I watched helplessly as the market fell within a dozen minutes.
Dozens of thoughts flew through my head. I was unable to make the slightest movement. I froze with emotion like an animal blinded by a car headlight at night on the highway.
These were my beginnings, absolute beginnings. I knew there was such a thing as SL, but I didn't consider it necessary, after all, I was here to make money, not lose, and "the market always turns"! Right? :)
This time it did not "turn" and I scored the first margin call.
I was surprised and then heartbroken.
A colleague in a similar situation watched six thousand dollars evaporate from his account in 9 minutes, having previously tripled his account (as did I at the beginning), he was unable to do anything.
How to deal with such a situation, when we are suddenly surprised and "freeze"?
3F reaction
In situations of very high stress, we have 3 types of natural reactions of the body. Let's call them "3F": fight, flight or freeze.
These are reactions inherent in all living beings. The first two are well known: living beings, when faced with a threat (such as an attacker), flee, engage in a fight or freeze in immobility. This is a survival mechanism, encoded deep in the genes.
However, in market situations, as the stories above indicate - this is a rather undesirable reaction.
Dealing with such a situation consists of two elements.
Prevent the "freeze"
First, prepare yourself mentally for what can go wrong. Prepare for the fact that the order may run you differently than you want, not where you want it to. Your electricity or internet may go out (I recommend UPS and backup connections). There may be a sudden huge amount of traffic due to news (I had this happen too, I entered without checking the news calendar...).
Knowing already several possibilities of "what can go wrong" you are in a completely different situation, the chances that something surprising will happen and you will "freeze" quickly decrease.
Expect the unexpected. And when it occurs make a quick assessment of the situation and be ready to take immediate action. If you think through in advance what you would do in a given situation you have a good chance of acting correctly. And the situation will not find you "with your pants down".
Stop the reaction
If you see someone in such a situation shout loudly or if you are standing close push them, this is usually enough.
Apply the same to yourself: shout loudly, use the "Polish universal word for k", get up abruptly from the computer. Clapping your hands loudly works well.
Any loud or violent action will break the "frozen" state and unlock your mind.