Extrait qui détaille pourquoi on coupe ses profits trop tôt et on laisse parfois ses pertes s'agrandir
What we focus our attention on in the environment is what we will usually get. The dog-biting example is a graphic illustration of this. However, there are other ways that our fears act as a cause to create what we are trying to avoid that aren't so obvious. Remember that aII fears act on our perception as a warning mechanism to help us avoid what we believe to be threatening. One way to avoid the object of our fears is simply to refuse to acknowledge the existence of threatening information. Another more subtle way that will create some real blind spots in our perception is to focus all our attention on alternative-nonthreatening-information to the exclusion of everything else. These blind spots will exclude whole categories of perceivable information from our awareness, which can result in some disastrous consequences, especially in the trading environment.
For example, let's say that the market is offering us what we believe to be a good opportunity to make some money, so we go ahead and put on a trade, but AT the same time we are also operating out of a fear of being wrong. We will fear being wrong because, if we are, it will force us to feel whatever negative energy has accumulated inside of us as a result of being wrong in the past. Now. if the market offers us a choice between information that would indicate we are tight or information that would indicate that we are wrong, what information will we naturally focus our attention on? The information that will make us right, without acknowledging or considering the implications of the information that would indicate otherwise. Again, those implications could be disastrous.
Let's look AT another example of a trader who is afraid of losing. A fear of losing presents an obvious conflict because it would be difficult to put on a trade in the first place. However, for the sake of this example, Let's say this trader was so attracted to a specific opportunity that he managed to operate outside of his fear long enough to put on a trade.
Now, the kind of information he focuses his attention on will depend on what the market does.
If the market goes against him, he will be afraid to confront the possibility of another loss, so he will focus his attention on any other nonthreatening information. If the market happens to come back to his entry point, he will exit the trade in a sigh of relief, regardless of what the potential is for any further movement in his direction.
But if the market continues to go against him, his mental defenses will begin to break down as the threatening information becomes just too overwhelming for him to be able to block from his awareness any longer. AT that point he could easily become paralyzed and not be able to do anything on his behalf. Eventually his stress and anxiety will become so acute that the only way he can relieve it is by getting out of the trade.
On the other hand, if he finds himself in a winning trade he will focus on completely different information.
His fear of losing will cause him to focus his attention on what the market can take away from him.
In a winning trade he will exclude from his awareness any information that would indicate what the potential is for the market to continue to move in his direction, which is the only information he focused on in a losing trade, and instead focus exclusively on information that will confirm his fears of the marker, retracing back to his entry point or beyond. In effect, his fear of losing causes him to exit the trade early for a small profit regardless of whatever the possible profit potential was in that trade. Once he is out, if the market continues to move in his original direction, he will agonize over the profits he left on the table and wonder why he just couldn't hang in there just a little longer, not realizing that his fear of losing actually caused him to lose all those additional profits.
What you have just been given is an example of why the vast majority of traders cut their profits short and let their losses run. In a winning trade, the fear of losing will cause us to focus our attention on information that the market is going to take our profits away, compelling us to get out early. In a losing trade we will focus our attention on just the opposite information anything other than that which would indicate the trade is a loser. Fear causes us to act without a perception of choice. When we are afraid to confront certain categories of market information, it drastically limits the choices that we perceive as available.
Cutting a Ioss isn't a choice if we systematically block from our awareness any information that would indicate that we are in a losing trade. StayingIn a winner isn't a choice if we are consumed wirh the fear that the market is going to take away our money.
To prevent these blind spots in our perception, we have to learn to trade without fear. And to trade without fear we need to completely trust ourselves to confront and accept whatever information the market is offering about itself, and we need to be able to trust ourselves to know that we will always act in our best interests without hesitation, regardless of the conditions.
Any endeavor will require some degree of trust. We would find it difficult to cross the street it we didn't trust ourselves to be able to get out. of the way of the oncoming traffic. From a psychological perspective, the market environment can wreak just as much havoc in our lives as getting hit by a car. To be successful as traders, we need to believe that we can win with an absence of fear so we can make better assessments of the conditions and perceive more choices. What this means is that we have to do the necessary mental work to release ourselves from anything within us that- would cause us to narrow our focus of attention or specifically block certain categories of information from our awareness.