Hi Sara,
I always feel good seeing your posts. You have no idea how great it feels.
Those are all good questions.
Yes, I would have made this trade before, during my addictive spree. But I also said no to 30 other trades I would have made. This one required a lot of patience to wait for. It’s the type of trade that, if it was the only thing I did, I would be just fine for the rest of my life. But it’s never that easy. You have to wait for these, often for weeks. Who has the patience for that, when the addiction demands constant action? That’s the challenge. Waiting for the safe opportunities to come around.
Yes there was leverage in this trade, but much less than usual. You don’t need leverage when you wait for safe opportunities. That’s the thing. You only need leverage to “force” big profits out of small opportunities. The addiction forced me to take unsafe trades and try to squeeze big money out of them using leverage. That is a recipe for disaster, and something I hope I never do again.
The trade had defined risk. It would have closed automatically if the market proved me wrong, without any decision on my part. It was pre-planned. I didn’t even look at it during market hours, so I could stay detached. Another key, since looking at the market during the day is mesmerizing and brings out cravings to be part of the action. Never make decisions while the market is open! There’s too much emotion and greed involved. Make decisions only when the market is closed, everything is still, and you can stay detached. That’s the lesson for me. Then it goes from gambling to planning a transaction like I would in a business.
You mentioned that’s a lot of money. In fact, it’s nothing compared to what I was “betting” before. I was putting $50,000 or more on the line before, because of leverage. This is a small trade. Hard to believe, isn’t it? That one trade could pay the rent for two months. But in the world I’m in, that’s a small amount of money. You can see how that would make it easy to fall prey to greed.
Maybe I am fooling myself. I don’t think so, though. I always feel The Craving when I’m taking wild impulsive trades (gambles). There was none of that this time. It was a pretty boring transaction, based on patience and careful planning.
I’ll probably avoid trading again unless a safe opportunity appears, and even then I will make sure I’m not feeling that Craving. I think most people will know what I mean: that surge of energy from the chest that spreads outward into the head, and makes us impatient & impulsive, but at the same time also makes us feel “alive.” When a trade is boring, it’s just business as usual. No craving. I need to stay with boring. If I ever start having fun thrills while trading, I’ll need to stop because that’s when it will get out of control.
For now I’m only risking small amounts, so if I lose my mind again the damage will be limited. The rest of my money is in a safe account that I cannot touch (it’s restricted for 2 years).
It’s risky to go through with this, but I have to try. I can let go of my loss – money is replaceable. But I can never, ever let go of the markets, finance, and investing. I will try and see what happens, limiting the risk. If I’m wrong and going down a wrong path, please speak out, because I really value everyone’s opinion here.
Daniel