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MTrader Class - 2006

 
 

 

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MTrader Class (C) copyright MTrader 2006

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Overcoming Fear and Dave Drain
by catman  

 

[09:33] <catman> OK today we are going to continue the discusssion we started yesterday..FEAR
[09:34] <lucy> sure more than anything
[09:34] <gimmie>  yes
[09:35] <beads> uh oh...be afraid...
[09:35] <catman> there are only 4 kinds of people in the world when it comes to fear while trading: those that have been paralyzed by it, those that are paralyzed by it, those that will be paralyzed by it, and Liars
[09:35] <d> correct
[09:35] <BG> lol - true
[09:36] <d> i am on section 2
[09:36] <lucy> I think i am the first 3
[09:36] <catman> we are extremely fortunate to have 2 very couragious people, Lucy and drf who have been willing

to openly lay out their fears for all of us to examine.....I love to work with honest couragous people, and I am proud to know both of them
[09:37] <drf> geez i f i knew everyone was listening dont knwo if id be that courageous-:)
[09:37] <catman> yesterday Gimmie talks about some aspects of fear and did a nice job of laying the foundation for

us to build on today
[09:38] <catman> today we are going to talk about conquering paralyzing fear .......forever
[09:38] <lucy> cool
[09:39] <catman> to start with I am going to tell you a story about me and fear, then we will talk about how it applies to you.
[09:39] <d> ok
[09:39] <lucy> ears,ears,ears, all ears
[09:39] <catman> when I was a youngster, I went to a school that was run under a regimen of rigid discipline.   one of the things we had to do was learn to box.
[09:40] <catman> I was terrified of the idea.  I am not particularily athletic, more prone to books than sports and the idea of pain was nowhere in my list of fun things to experience
[09:42] <catman> we were not going to have to get into the ring once, but twice a week for several weeks....we

would be paired up for the entire course with one sparing partner, and we would be boxing 3 1 minute rounds with 16 ounce gloves
[09:42] <d> wow
[09:43] <d> glad i am a gurl
[09:43] <catman> now 3 one minute rounds may not sound like much,l but I can tell you that by the end of the third round carring a one pound pillow on each hand, you were so shot you could not even lift your arms let alone hit anything
[09:43] <catman> but I digress
[09:44] <catman> I was pair up with a guy named Dave Drain.....nice guy....biggger than I was, stronger than I was and god knows much more athletic than I was
[09:45] <catman> I was so scared that for the first couple of days I would throw up before boxing class.
[09:45] <gimmie>  ooh
[09:45] <d> ahhh
[09:45] <catman> We would get into the ring, Dave would chase me around the ring for a while and eventually pop

be hard enough to knowck me on my butt

[09:46] <catman> I would loved to have quit, but  quitting was not even an option
[09:47] <catman> so twice a week the punikshment would continue....it got to be a joke among my classmates....they took to calling me "Canvas Back" because I got knocked down so many times
[09:48] <catman> Eventually, I noticed that the fear had lessened,   I had never really been,,,I mean how much damge can a person do with a one pound pillow on each hand?
[09:49] <catman> So I began to be able to defend myself better.  I would still get knocked down, but it was harder

for him to do that.
[09:50] <catman> eventually, I had the fear under control, and before the course was over lil ole me managed to cold cock old Davey buddy!!   It was truely a red letter day in my life
[09:50] <gimmie>  :-)
[09:50] <catman> Now here is my argument:
[09:51] <catman> paralyzing fear cannot be conquered by reading books, or going to class, or by taking therapy
[09:51] <catman> it it a physical manifestation of an emotional condition, and must be faced....physically
[09:52] <catman> it has to be looked square in the eye and attacked....again and again and again until it loses its hold
[09:52] <catman> there is no other way
[09:53] <catman> that means in trading we have to trade our way through fear
[09:53] <catman> if I could, I would force each of you, as I was forced, into a program that would be guaranteed to whip the problem
[09:54] <catman> that is not possible, so all I can do is recommend a course of action....this will make it harder for you, because and outside force cannot be your "surrogate" courage (I was more afraid of the consequences of being

a coward than of boxing)
[09:55] <catman> here is what I feel you must to get over this as quiclkly as possible.
[09:55] <catman> 1. stop trading
[09:56] <catman> 2. tell Gimmie about your problem (this is to force you to be accountable)
[09:56] <catman> 3.    trade no more than 100 shares
[09:57] <catman> 4.  determine and write down how much you are going to spend on each trade if you are wrong. 

(ie perhaps 10 cent stop ....one 100 shares is 10 bucks)
[09:58] <catman> 6.; determine a potential (I am entering aapl at 63.31, I expect 20 cets so I will not exit before 63.51)
[09:59] <catman> 7.  STAY IN THE TRADE UNTIL YOU HOT THE POTENTIAL, OR ARE STOPPED........ABSOLUTELY NO EXCEPTIONS!!!
[10:00] <drf> EVEN IF your signals turn right against u? without being stopped or hitting target?
[10:00] <catman> if you do this, in a very short period of time you will begin to feel the fear lessen, sweaty palms dry up and the hyperventilation cease.
[10:00] <catman> Then, and only then will you be ready to trade TO MAKE MONEY
[10:01] <lucy> well gimmie knows about my problem, and so does everyone else!
[10:01] <yosmaos> sorry to disturb but is there a #5, cat?
[10:01] <lucy> that is a secret yosmaos
[10:01] <catman> until then you are trading for PRACTICE ONLY!!!   so you are going to lose money each and every day
[10:01] <d> i think so yosmaos
[10:02] <catman> read what I said again drf
[10:02] <catman> ]signals are not worth a diddley to you if you cannot follow them because you are too afaid to listen to them [10:03] <gimmie>  ah.. very wise
[10:03] <catman> this is a protracted training exercise
[10:03] <catman> you are not "trading" you are training
[10:04] <catman> say you do 5 trades a day of 100 share with a 10 cent stop (hard stop btw) the training will cost

you 50 bucks a day
[10:04] <catman> Now put this in perspective:
[10:04] <lucy> btw?
[10:04] <catman> by the way
[10:05] <d> by the way
[10:05] <lucy> ty
[10:05] <catman> how much have you been paying a day because you trade scared to death???
[10:05] <catman> \how much do you pay for entertainment eahc day??
[10:06] <catman> thios is dirt cheap and will over time fix the problem
[10:06] <lucy> So....scared to trade, like you were scared to get in the ring.
[10:06] <catman> right
[10:06] <drf> Ok...i will try it..
[10:06] <lucy> So.....we HAVE to trade about 4-5 times a day to like you HAD to get in the ring
[10:07] <drf> evn though i think im partially there
[10:07] <lucy> even if we are scared
[10:07] <catman> if you "try it" you will fail............losers try, winners do
[10:07] <drf> ive made money the past 2 weeks..not a good week this week though
[10:07] <catman> yes Lucy
[10:08] <lucy> And practice, til i hit my potential or get stopped out.
[10:08] <catman> yes
[10:09] <lucy> That will be a challange, because I will have to committ to making a minimum # of trades a day.
[10:09] <catman> too bad
[10:09] <catman> ya gotta do it
[10:09] <drf> OK...ill consider it training...here's my issue which i may as well lay out...
[10:09] <lucy> drf, i;m so glad i'm not alone here
[10:10] <catman> If works gets in the way lucy, you may have to cut the number
[10:10] <drf> Beginning of day i'm typically psyhced, prepared..with tech preparation as well as mental prep to confront fear..
[10:10] <drf> but after first trade or first setup..falls apart....
[10:10] <drf> either scared of losing profits on next trade, scared of missing setup..and seem to lose attitude after that
[10:11] <drf> so ill take your tradining challenge cat..adn appreciate you offering it up
[10:11] <catman> OK drf......here is what you need to do.
[10:11] <catman> read over what I have written twice more
[10:11] <drf> its liek  I need a reset button to go back to setting up like i was at  begining of day [10:12] <catman> then walk away....go get coffee walk the dog....an hour from now read it twice again
[10:12] <catman> then print it
[10:12] <catman> then tonight read it twice again
[10:12] <catman> tomorrow morning do the sam
[10:12] <catman> same
[10:13] <catman> until you thoroughly understan what you are trying to accomplish
[10:13] <gcrispin> i feel that a great thing about this program is that you can stop thinking about your stops as failures and think of them as part of training
[10:13] <catman> it takes an intensive course of traing to conquer the fear!!!!
[10:14] <drf> OK. I will take the course.
[10:14] <catman> if you try to do this half way, the fear will simply hide, then come back stronger
[10:14] <drf> yeah..thats whats been happening..think im over it and then whammo either the next tradeor next day it keeps coming back.
[10:15] <catman> I rest my case
[10:16] <lucy> thanks catman
[10:16] <catman> yw
[10:16] <drf> Ok..thx for sharing your experieince and that course cat..ill go ahead with it.
[10:16] <catman> if no questions, I be done
[10:17] <drf> thx cat.outta here
[10:17] <drf> have good weekend all
[10:17] <BG> thanks catman - helps
[10:17] <BG> see ya drf
[10:18] <drf> see ya bg have good vacation
[10:18] <beads> ty catman, that is great plan..
[10:18] <BG> thanks drf
[10:18] <catman> someone whom I have trained in the past just PMed me and said to tell you it took that person over two years to beat the fear because we did use this techinique.....I feel you can be "fear free" in from one to two months this way
[10:18] <catman> we did not use
[10:19] <KenWolff>  good class cat... thanks
[10:19] <catman> shooa
[10:19] <KenWolff>  canvas back
[10:19] <catman> LOL
[10:19] <KenWolff>  I used to be called a name that I can't repeat in mixed company.... by my relatives
[10:20] <BG> ok - while in class closed out remaining q's short at 36.53 +.12 -- if i had been lucky i would've been distracted and entred the trade a minute later when i would have caught this big whoosh down - funny thing i've learned about this job is to let the "lucky events" go - so i missed it - could've went the other way to - was a good exit because we had made three new highs off the s1
[10:20] <BG> (though it would have been nice to have caught it) - lol

[10:21] <BG> in the past holding out for luck has killed me
[10:22] <catman> it is a shame that we cannot open folks heads up and give them our hard learned knowledge........becoming a disciplined trader is extremely hard BG.....making money after you do is almost a joke
[10:22] <BG> yeah - a trading chip
[10:22] <BG> would've saved me lots of cash
[10:22] <d> ty very much , nice class Catman!
[10:23] <catman> ty
[10:23] <BG> funny - i normally would've been bummed by this - honestly looking at the q's fall more and i don't care - there will be another trade - never really felt this until the last month

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