Thanks for taking the time to read today's blog post in these posts we talk about emotions and the psychology of trading. Please be sure to read the disclaimer on our site before moving forward, comment below and follow us on instagram!
Trolls are the worse! Or are they?
Most of the time when someone calls me out on a trade I dismiss them pretty quickly because they don't see what I see in the charts and therefore their opinion means little.
Especially if they have a combination of numbers and letters in their user name. It seems like they are just trying to waste someone's time and get a reaction.
And that's not what I am on twitter for. There are tons of highly skilled traders and fantastic accounts that are helping you to change and become better at whatever it is you're trying to learn.
So when I posted that I was shorting $HEAR this week of course John Rodgers had to reach out and prove me wrong (see blog photo). This was of course after Lawrence Rincon asked me "Any DD, reasoning, substantiation for this trading idea ?"
So, instead of trying to make an example of anyone I asked myself "Is this really the right trade to make?" and quickly realized I was on the wrong side of the trade.
I had made an emotional decision based off of the interaction I had with Turtle Beach's customer service and knew I was wrong on two fronts: my trade and not helping my twitter followers. So what did I do?
Listened to John's input, pulled up a chart of $HEAR (Figure 1.1) to see if my trade was incorrect, created a chart and analysis, sold my puts for a loss and bought February 19th 2021 calls for $24. Posted my analysis to twitter and then let Lawrence know as soon as possible.
Instead of being stubborn and trying to prove my point based on emotions I listened to what others had to say and changed my mind. Reducing the potential losses and even making gains.
Lesson: Be flexible! You're not always going to be right in the market and the sooner you recognize that you are wrong and change direction the better off you will be.
When we are trading and investing not only do we want to protect physical capital, we also want to protect emotional capital. This is why it's always important to listen to price and not just our emotions.
We took some profits on the calls for 85% Friday to lock in some gains and will re-enter if the market suggests.
Essex's Trading Quote of the Day (QotD)
“Trading doesn't just reveal your character, it also builds it if you stay in the game long enough.