The Elephant in the room: Anger

 Elephants are gentle giants who are remarkably powerful, but when triggered by anger can do untold damage to anything in their vicinity. In trading, there is often another powerful "elephant" in the room, Anger itself. Much like elephants in the wild, this elephant can also do untold damage--to one's account. The reason why it's an elephant in the room is that very few people talk about the contribution of anger in trading. People instead deflect everything to fear and greed, which sound much more palatable and relatable to the trader next door. Anger, however, is a more of a raw emotion that is often associated with unpredictability and violence, perhaps why it's taboo to admit to it in the context of trading. There's the anger that arises from prices not going one's way, the anger that builds up by having been wronged by brokerage glitches or trading platforms, etc. The consequences of this anger are numerous - going on tilt, revenge trading, breaking all rules including a daily max loss, re-funding one's account against prior promises to not do so, etc.

Identifying the root causes of one's anger in trading may require a bit of a deeper dive into what things make you angry in general, triggers in your personal life that bleed into trading, etc, but an immediate solution to negate its effects in one's trading is incredibly simple: to do nothing. Instead of feeding the source of the anger, you're allowing it to dissipate. As a trader, you're inclined to take action to rectify situations, so doing absolutely nothing almost amounts to going on the offensive against your bias toward action. Even taking the rest of the day or week off may be needed to fully discharge the battery of anger that you've built up, but the main thing is waiting for clarity of thought and objectivity to return to one's decision making. 

What I've discussed here isn't rocket science, but this simple solution may save you from many situations that are hard to recover from. Your objective is to take every trade independent of other trades, which allows your edge to express itself. Corrupting this process by making your current and future trades conditional on past trades (by allowing anger to seep through) is a sure-shot way to corrupt your edge. A simple example is beefing up one's position size in anger to make up for a loss. Two losers in a row (which is very common) could create a huge, unnecessary dent that would not have been created with normal position sizing. Been there, done that. Now I know better.