The Real Source Of Harm
"Keep in mind that it isn't the one who has it in for you and takes a swipe that harms you, but rather the harm comes from your own belief about the abuse. So when someone arouses your anger, know that it's really your own opinion fueling it. Instead, make it your first response not to be carried away by such impressions, for with time and distance self-mastery is more easily achieved."
— Epictetus, Enchiridion
Another meditation today demonstrates how we can be the source of our own harm by reacting in anger to situations. This can definitely be the case when we are trading! If we lose a trade and we haven't moved swiftly to control our red at our defined exit point, we have taken a much worse unmanageable red! This can then trigger an angry reaction and our instant response is to try and get back what we have just lost, as quickly as possible! This can mean jumping on trades that don't meet the criteria for our strategy because we are now not thinking rationally and all we want to do is get our money back fast! We are now angry and annoyed that we didn't stick to our plan and we have gone full tilt into what we think is recovery mode using a quick fix of trading anything that comes along and we are "revenge trading!" Our plan, strategies, patience and discipline have all gone out of the window! Sure enough we will take another big loss and that just makes the situation even worse! Then we will hate ourselves and call ourselves all the names under the sun and realise how stupid we have been; all because we got angry! This has all got out of hand, because we didn't get out of that initial trade at our defined exit point like we should have done! If we get angry and don't address this situation, it will soon escalate out of control; so STOP, take a break, go for a walk to clear your head. Only go back to trading when you are calm and relaxed and ready to go again.
The best way to stop this happening of course is to stick to your rules 100% of the time. If a trade is going against you, then you must force yourself to exit as per your rules! This can be extremely difficult initially as nobody wants to voluntarily take a loss, but you have to protect your bank; always! By managing your potential losing trades as you should do, you are not reacting in anger and therefore you are avoiding "the real source of harm."