Paul J Singh

Limit pain for smarter swing trades

The trading game is a painful experience for most traders. Base emotions like fear, greed and panic are amplified the second we put on a trade. 

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Ever taken yourself out of a great trade early for no reason other than the fear of losing your small profit? That’s your brains emotional center limiting pain even when the logical you knows otherwise.

“That cotton trade was almost a deal breaker for me. It was the point that I said, ‘Mr. Stupid, why risk everything on one trade? Why not make your life pursuit of happiness rather than pain.’”

Everything Tudor Jones does is an effort to limit pain. By limiting pain, we make better decisions and put ourselves in the best possible position to win. 

Here, Mr. Jones describes how trading too big caused him pain. Many traders fall into this trap. They do not limit risk and position size, and trade too big for their accounts. This type of trading leads to bad decisions, along with sleepless nights.

Other pain causing trading leaks include, but are not limited to watching financial news mongers like CNBC, mindlessly following the Twitterati, chasing stocks, micro-managing positions and trading against the trend.

If you find yourself making bad decisions, do everything you can to limit pain in your trading. At the very least you’ll sleep better.

Quote 1: Nehru on Caution as Risk

Quote 2: Bruce Lee on Creating Opportunity

Quote 3: Machiavelli on Risk Management

Quote 4: Michael Jordan on Limits and Trading Scared

Quote 5: Will Smith on the Past, Present and Future