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  • Writer's pictureJan

Trading and self-worth on a red day

Alright time for some real talk, for something more personal and very much under-discussed for plenty of good reasons.

This article will not address market behavioral observations as previous ones but might have rather more personal connotations for many involved in the trading industry or markets in general. It might not relate to everyone but certain groups are likely to find common ground, especially those younger individuals trying to make it full-time in this industry.

The idea for this article came about from an individual with who I was in discussions for a while around few different trading-related subjects, and the last topic of discussion about negative self-talk and valuations that come especially around red performance days, is the one that is very common and also not very much discussed which made it worthy of new topic and article.

Why is discussing this very much a taboo subject?

So before I dig any deeper, be aware that you are taking a lot of psychological observations from someone who is by no means an expert in this field, and has plenty of self issues yet to solve, so take everything with a grain of salt.

But if there is one thing I specialize in that does bring value in discussing subjects like that is high objectivity and a lot of pattern-seeking observations, including reflection-to-action-driven consequences, mostly based on experience with self-reflections and observing others in financial markets. Once you observe something for long enough, with the aim to see patterns in it, you start to understand possibly the root cause, even if you are not the one who is addressing it and you are only giving a helping hand to someone else before fixing the issue for yourself (mostly because that is easier to do and involves dodging on primary responsibility).

Why would discussing self-worth or just negative talk openly be a taboo subject, especially when we feel beaten down? Without oversimplifying it too much, using one angle of answer would be: Because men (yes male-oriented industry and issue) are not made to be open vases when it comes to discussing something like that, it is evolutionary very off-putting. A weakness, step down in social hierarchy of your own competitiveness versus your peers, not because you necessarily see it that way, but because evolution ingrains it to the extent of everyone. Some respond to it stronger, and some to a lesser extent.

Social media "poker face" facade

It is why you don't see much of this discussed on social media, even though there are thousands of beginner traders going through this in some way or the other on daily basis. And no we are not talking about posting winners or losing trades or thesis on social media, but rather the depth of anxiety that one goes through sometimes on harsh days.

It is not that frequent to see losing positions being posted, it is actually far rarer to see in-depth self-reflection of internal value drop being posted on social media, or the net itself. Posting missed thesis or losing a position, in general, is not that difficult. It is more difficult and rare to post the depth to what some go on difficult days, but as well to see in-depth responses from others which is equally rare to see, mostly because where does one start?. "It will get better", "dont worry about it", "live to trade another day", those ain't helpful messages at all. And as mentioned since the industry is heavily male-oriented, everyone prefers to put on an iron mask or poker face and consider a dismissive state of their own, as superior.

In short posting about it, is weak, it is also very down-putting for everyone else. It crushes the dreams of those who seek field of easy gains at no struggle, and while some do much prefer honesty, that is not really the case for majority. If financial markets are a field of easy at no time spent needed cash machine then surely one wouldn't want to hear about stories of struggle and despair when difficult days arrive.

Think about it, when someone reads about existential value questioning self spilling stories from someone on social media or forums or chats, people will give him or her a helping hand:

-1. Because they see themselves going through the same issue and they provide comfort to the person just as they do in reflection to themselves,

-2. Or they will ignore it because admitting to it is too difficult to bear, ignoring the issue of someone else might help swiping my own issue under the rug too.

-3. Or perhaps since they rationalize that it's just a temporary weakness which will be solved in near future it doesn't require attention to bring it about. It is over-reaction basically, at least rationalized that way. But many dont realize that even consistently profitable traders for long time, can hit into one month of major difficulty and questioning all of sudden.

Regardless of which reaction it is, each will eventually lead to pushing the issue under the rug most likely. Why?

Because to work on the issue of self-worth decrease that often comes around bad performance days, especially if rooted in deep issues other than just quick monetary loss, it's not a quick solution to solve. It takes a lot of attention, direction, and strategy to solve.

Most people that give others a helping hand, will abandon them eventually (sooner rather than later) because they realize they are chewing too big of a cookie they initially realized. Not because they are mean-spirited against others, or lack empathy, or lack the spine, but because its a hell of an effort to solve this for someone else, even for yourself it is already big enough challenge. And everyone knows their own circumstances and themselves better than they do for others, for most of it.

Once you stack the numbers in the right direction it's easy to see that this becomes a taboo issue, under-discussed because the math effect of deterioration or decay effect does its thing.

Few of the total population talk about it, few will comment on it and take their time to address it, and very few will stick long enough to give another person or even themselves a helping hand to have an issue "online" and exposed so that it even gets enough spotlight in the social media or other online communities. And let's face it that is where we discuss most of these things when it comes to the financial markets industry (trading especially), very little is done on a person to person basis, again all due to the reasons of deterioration effect which even decreases chances for it to be done personally-physically rather than online. All of which makes chances of proper commitment lower, and especially the honesty decrease since with poker face projection, most will project in social media circles slightly stronger personality out there than they might actually be, from a psychological perspective.

While everyone has bad days, rough days, the taboo effect makes it even more problematic not just that the spotlight doesn't shine on it enough, but because actually addressing and solving the issue can be very difficult, especially in individuals that lose self-worth very quickly on a red day, more about that will be outlined lower.

And to be clear, the topic of article is not about feeling down on a red day. That is not long-term issue, it is short-term phenomena. What specifically is discussed here is a much deeper issue which is when one is facing a red day, and self-value and worth are being questioned. That in itself is not just short-term thing, and will repeat until one addresses it properly and does something about it.

And again not that everyone goes through that, in fact many do not. This is addressed only to those, who do feel like this is the core of their downfall on a red day often, and what they struggle the most with. A low self-value system combined with a morale drop can in fact be very dangerous on a red trading day, as it can spiral out into something even more problematic, especially could trigger revenge trading or even worse complete nihilistic YOLO response.

"How important is the negative self-talk control?"

The individual I discussed this with asked about the importance of negative self-talk, and whether it should be controlled or not or how to get rid of it. So let's lay out some examples on why it happens and why it might or might not be something that is easily fixable:

Did you ever have a bad losing day and started to question whether this industry is right for you because it just might be too difficult and too unpredictable? Yeah me neither.

Have you ever helped someone with a thesis, you executed on it and so did they, but you messed completely your executions but they did not, resulting in a gain for that person. So you wondered at the end of this made you a good samaritan but is that good enough while your P/L is resting?

Yeah me neither.

Did you ever get a huge value increase from a great week just to have it completely overturned the next week while your self-worth dropped negative, even though you learned some good lessons along? Yeah me neither.

The point is, negative self-talk is often your value system giving you a hint "hey, something ain't going the right way, it needs a change". But because sometimes we overvalue short-term results above long-term results, making the negative self-talk sometimes also unproductive and unstrategic. What I mean by this is, that self-talk is often needed and healthy, especially if it makes you reflect on your poor actions, and gives you ideas on how to solve them. Without negative self-talk afterall, it would be too easy to steer an individual into a completely destructive path. However, the question is if a person replays the right amount of reflection after the negative self-talk, as only with reflection and figuring out actions the negative self-talk will yield a positive result long term.

Stressing about short-term results and producing a lot of negative self-talk without strategic addressing of issues only leads to a loss in morale, excessive self-doubt, and likely a failure ending with giving up. So too much negative self-talk while being completely driven by poor short-term results and not being process-oriented (learning) can easily deliver too much un-productive negativity and self-doubt.

And to stress it once again, negative self-talk is often needed to steer one in a better direction. But for many, who prioritize values wrong and are still too early into careers are likely to overdo it. "Am I good enough", "Is this right for me", "when is it going to get better and easier", "why is everyone doing so much better", most of those self-talk questions come due to lack of experience and forcing too quick results without really giving yourself time to even figure out where your lack of competence of understanding the market behavior or your actions comes from.

Most of us went through that phase, and somehow if you keep exploring new markets and edges it is likely that those questions will still pop up in your subconscious sooner or later and remain with you for years. Yes, that is the reality, if you pick a path of explorer, the self-doubt will never go away, it just minimizes and you learn better on how to shut off as much of the unproductive part of it, while only keeping the productive skepticism "online" in your thoughts.

The instability and chaos of markets behavior typically ensure that one is always kept in the loop of self-doubt, the question is just to what extent.

To what extent it is healthy self-doubt that results in positive performance due to better selectivity, or negative excessive self-doubt that is result of lack of competence and research and false expectations.

Prioritizing value (learning from mistakes versus short term gains)

Above all, a lot of unproductive negative self-talk on red days comes from the wrong value chain for beginners especially. Proper value hierarchy for a beginner in markets should always be learning and opportunity exposure as primary objective, the results of actions and executions should be secondary. That is because at the beginning one will still need to grasp a lot more knowledge and experience before a consistent edge will be built, and short-term results of trading will be much less important, relative to how important it is just to keep growing.

One thing I like to keep bringing up often (that was my personal goal while in two different industries) is that you have to outgrow your lack of competence. This means that you have to increase the growth of your knowledge and speed it up more than you have daily engagement and capital exposure to the market. The faster the growth curve is tilted and moving the more likely it is that you outgrow your lack of competence and therefore stop the unnecessary negative self-talk and doubting.

So prioritize knowledge and growth rate above short term results in directional opinion on financial assets and how much you get it right or the monetary return gained from it. And above all, if you can make whole process of being engaged with markets enjoyable regardless of results and how quickly you are growing then you have even higher chance of making it through. But this often cannot be forced, you either have it, or dont.

If the value chain is not properly formed, and monetary gains take a front seat from early on, it is much more likely to then spiral into negative self-talk, and plenty of pessimism. That is especially true because early results in trading or market career are likely to be poor, and if that remains full focus and priority the consequences can be felt especially when poor performance keeps dragging on for while. Since the difficulty of this industry can be paramount for beginners, it is easy to get into a spiral of negative self-talk, especially if expectations are not met and just keep getting crushed.

The Sisyphus work

Do you ever feel like markets or trading is one step forward and one step back? Like pushing rock upon the hill that each time sooner or later keeps rolling back down to where you started?

I find many decent examples of situational awareness from Greek mythology often. Religion is a no-go for me or anything that obstructs science, but there is something special about mythology. One of such decent examples from it is the pushing of stone by Sisyphus upward of the mountain, which relates to trading often, especially to beginners who too quickly prioritize everything about the game in terms of short-term results. One week reaching the top of the mountain and then the next week coming all the way back down into the depths of the valley.

There are many industries out there just as difficult or more difficult than trading or markets, yet not many who attend those fall into deep self-questioning spirals of depth and nihilism as they do in this field. There are many different reasons why that is.

A human is made for physical work (moving things) and not a full day of intellectual work (researching and clicking buttons), if you push a stone towards the mountain each day -physically not just metaphorically speaking and the stone rolls back each day, even though you technically did not make any achievement, the struggle to get near the top of the mountain with heavy obstacle and the burden is itself giving one self-value, especially because the tired body and increased stamina gives you direct feedback. Doing difficult work, especially physically related one can feed the human body with plenty of endorphins, even if the result is devastating to morale, such as a rock falling back down. Many who served in the army and faced similar challenges, of pushing sandbags on top of piles and then back down just as part of practice of mental training, again and again, could probably relate to that. This or did I just watch too much of the Jarhead movie? Probably not, the history has many of such recorded events along with what you can as well observe on daily basis.

The point is, that it is easy to get distracted without questioning your self-value when you are heavily physically tried even if the results are not what you want them to be quickly. It is easy to get distracted without questioning your value systems when you have had to push through challenging social situations because at end of the day that will feed your self-worth through the dopamine and endorphins released.

On the other hand, it is that much easier to start questioning things in financial markets and trading especially because nothing replaces that void at the end of the day when you are down. There is no endorphin rush, exhaustion, or needed distraction, at end of the red day often. Its just...void.

Build enough self-value outside of short term market performance, create a large surplus

Because of that, it is highly suggested that one engaging with markets in any sort of form that is very time-consuming on daily basis, should create a daily routine that creates the conditions needed that produce the self-value, regardless of how the trading day turns out, or even before one begins. The sooner you realize that and how important it might be, the lesser the chance of having future issues.

This means creating value outside of actual trading is the best way to go, or if it is market-related, it must be disconnected from one's own daily performance. And that typically means finding a way to provide value for someone else. There has to be a balancing act, your self-worth cannot and should not be fully dependent on how your daily trading or investing performance went, because if it is, you are putting one very troubling and difficult task upon yourself. In other words, you will have to ensure that majority of days are positive in such else, else the erosion of self-value will yield negative consequences sooner or later. Funnily many do come to this conclusion, partially as well myself while back, so the answer might be, "well then I just need to get good enough to solve that issue". It's a very arrogant, naive estimation, but to some extent, it could work only if you place a high amount of attention on it, but all at some sort of secondary consequence. More about that down in the article. We should also not neglect one important component. Many of those that go all into this industry, and want to make this their profession, typically will have to spend a ton of time early on just to learn and experience different market conditions, while trading it. After all most people are not comfortable just watching markets and learning, they have to click something, push some positions, trying to churn over that P/L into something short-term productive. That is why the erosion of self-value can come that much quicker to those individuals. And be not mistaken, if you want to go all-in, and have a strong passion for it, who is to say this isn't the right path? The idea is, do you understand the path fully that you will take? That is where most of them, including myself, early on did not understand.

The end equation that it comes down to is relatively straight-forward: You rush things, and you will likely have poor short term results as consequence, which will erode self value and perceived value of your journey as well. In other words, you will not appreciate as much the journey itself, because it will be tinted by your value decrease and pessimism more than it needs to be.

Discussion extraction around self worth and time spent in markets

"I guess it starts when I break rules or when I take a dumb loss. The loss can be small honestly but me breaking my rules pisses me off. But it’s mostly linking my self worth to my trading man. It’s so hard to no link it but in the beginning stages it’s so difficult because this is all I have been working on for the longest."

Extracted from the question i was asked, let us address it further on how this applies to beginners but just anyone really over long term.

For while the realization for many might be that there are only two ways to fix issues like that since the roots probably go deep. One is by really addressing the situation from outside and that takes a ton of work, properly addressing everything that impacts your self-worth...its a big issue to address especially when you see it impacts you and you want a solution quick. Because be aware, just because your self-worth drops on red day or day where you did plenty of mistakes into the very deep territory it means that your base levels are likely already too low. It's not the single day that is the issue, but rather the average, the surplus total.

If your value is high the jump does not cause an issue, it only causes an issue where the value is already low to begin with, the self-perceived value that is of course. It does not matter as much what others think of you in such case, but what you project for yourself.

It can be difficult to be aware of all the factors that cause this, because it's easy to see "oh I didn't follow my plan, hence now I am mad at myself, hence I start doing monkey stuff, and the result is a decrease of self-worth". That's how many see it, but that's not a realistic way if you want to fix the problem.

Because the solution to this is to just "always stick to plan", or "be green 7 out of 10 days", again which is unrealistic, everyone breaks rules some more some less and until your edge is polished the consistent performance won't come out of nowhere either. So you need to ask yourself what causes your self-worth to drop so quickly when you break rules or have losses because that is a real differentiator to many.

The last message in the question: "This is all I have been working on for the longest", sums up the majority of the article. Much of the issues outlined in the article come from those who want to turn this game into a full-time profession and decide a lot of time to it, but then expect results to deliver earlier than when they are ready (when their skill set gets good enough). Much of it has already been addressed above.

If you think about it, many of the things about society are structured in a way that they only require half-assing. Therefore the cost is not too great, and you can as well expect some sort of reward with decent probability as it goes for things that can be half-assed.

But some industries are highly competitive, it is impossible to distribute the wealth in short-term trading of financial markets to some side consistently without some other side getting consistently enough burned for that mechanism to work. This means that figuring out a game like that should be expected to be very difficult because the equation of fraction capital available for consistent distribution defines it so.

To put it into biology example, for a honey badger to reach into a beehive full of angry and dangerous African bees, there should be a high cost to pay, or else everyone would eventually get there and the reward of sweet honey would no longer exist. On top of that, the beehive should only be rarely accessible, in case if the number of courageous honey badgers increases too much, which can easily be the case.

But to expand on it, some professions are not half-assing oriented, instead of the educational system straight away telling you to become competitive in it, you will have to dedicate a lot of time (5 years plus) and then your chances to become valid competitor are quite high, but not guaranteed.

Trading is just like that, with one exception, there is no guarantee whatsoever, and there is no real finish line ticking clock, you don't know where that line is, especially in earlier stages.

All of this leads to the fact that in typical universities you will not see many individuals who struggle with self-worth and do very troublesome decisions afterward just because they have a few bad days in a row, or even just because they have been resting for an entire year without studying (hello). It is because when the finish line is quite clear and defined, and the overall prospects at the end of it are quite a lot more stable it makes self-worth systemic drops much less frequent when struggle arrives in such circumstance.

Because none of that stability and predictability exists in the financial-trading industry or many entrepreneurship-related businesses, it creates the issue where self-worth can quickly start to drop when facing big difficulties, since the future remains and always is somewhat foggy.

Or to put it into the concept of strategy gaming, the "fog of war" is always present, it just takes a lot of time before the map gets revealed enough to understand just how much was really hidden underneath. And each new piece of hidden map is still a mystery regardless of how much was already revealed, to a certain extent, altugh the context of all that was revealed certainly helps in furthering better expectations on what might be hidden underneath the not yet explored parts. That is a decent summary of how journey in markets look afterall.

The one on top of the mountain and the one on the bottom of the valley

Some can break many rules and still see themselves as on top of the mountain and for some, it very quickly spirals into an eternal hole of self doubt when something goes wrong.

Without getting too personal, it's not secret that if you think of your self-value in being not as great as you think it should be (not reaching your potential currently), you are much more likely to be under the issue of having quick self-worth decrease on red days, that's a fact. And vice versa applies.

Higher self-worth individual (self-perceived):

Someone with strong self-worth is just gonna say quickly "oh this game isn't worth it" or "something is wrong with the market", basically it's a quick deflection, sometimes for good and sometimes not good reasons.

Someone with strong self-value might also shrug off the short-term losses better and have a focus on the long term because they might be able to quickly identify that there is a difference between long-term and short-term results. But also from my observations, it is more frequent to see that those with a lot of self-worth also give up on trading and markets quicker, because they identify as a path being too difficult and not worthy of the struggle. Basically, there is better value to build out there as justification.

Lower self-worth individual (self-perceived):

Meanwhile lower self-worth individuals often seek markets as self-proving mechanisms for themselves or for a display to others if they can get somewhat decent at it. It is one difficult game to crack, and one area where surviving already is a worthy challenge to prove to others. That component for most individuals like that is not well defined, meaning if you asked them what is driving them to this field, they wouldn't articulate it as "proving myself in a difficult game" even though that in reality it is often quite a big part of it if they only dig deep down enough. That also explains why such individuals rush it often much more, wanting quick results. The longer the delay, the more one postpones that "I made it" stamp on your behind that can be publicly shown (or not if PG13). Joking aside, this overall reason of "why doing it" should be dragged in front so that everything is crystal clear because only then the journey can become more enjoyable. Try doing this as best as you can, also you might not like the answers you find. Sometimes we think our values and reasons are nobler than they actually are.

Self-perceived value meter threshold issue

Someone with a lot of self-worth will be able to ignore red days much better, because the red day or just a terrible day in terms of not following the plan is not part of the total value decrease for that individual, at least not big enough to where it starts to cause questioning your value system. That obviously would not be the case if the individual is highly materialistic, which will not be the case for many.

The principle is this, those who are very active and very balanced in life in general, are more likely to have higher self-value, especially if successful in their areas of interest. Typical long-term investor or swing trader is more likely than not to fall into this area. On other hand, those that are more asymmetric, very focused on one thing that drives a lot of their daily attention, will have their self-value drop over time, if they are not performing well or as well as they should, if that one focused area is very challenging, such as markets.

Understanding that is quite critical in trading. If you are a beginner and you have set your path of becoming a full-time trader or investor, while putting full attention to this industry on daily basis (8 hours for example daily), your self-value, especially in earlier stages, will likely take a big hit. And that hit might keep lasting for while until your base self-value degrades quite a lot. Remember, you have zoned into a difficult and challenging task while depriving yourself of balance feeding and building the value elsewhere because likely the markets eat up much of the time. And obviously that will depend very much on the individual, how balanced one really is, but certainly many are quite obsessed in early stages and will connect to the message here.

Degradation effect on decision making if one is unaware of low self-value perceived

That is where if you are in such long term situation of self-value drop and you throw on top of that few red days in a row, it's easy to see why someone in such a situation can start spiraling into questionable, strange, or straight down monkey decisions on trade executions, because when you see your self-value to be low, why not enter into monkey mode and let luck solve your problem eh? It might sound a bit dark, but that is essentially what happens, just on a bit more micro level, un-conscious. When perceived value drops low, people start to make all sorts of problematic decisions, most of which are self-destructive to the point as if you are watching someone who just had IQ decrease by 50 points within very short time, basically turning into a monkey.

Therefore self-value meter is very important to understand. For some they know it exactly where it is, for some they don't, someone else has to tell them, or they need a lot of self-reflection before they figure out "oh I have to work on this and bring it higher". That is why those that never take a serious stab into becoming full-time in this industry, and are fine with slow investing will have a much lower chance of stepping into self-worth questioning trap. It is more likely their time spent on a daily basis on observing or dealing with markets will be lower, their sacrifice therefore as well, and their balance of self-value from outside of the market will be strong enough to prevent them from stepping into those destructive red days where everything just spirals out.

Being self-reflective and observant

Whether you think or not, that you might have frequent issues with self-worth on red days, it is more likely than not, as someone who spends a lot of time in this field that you will enter at some point into the questioning stage. That unless you already are mature, have a successfully running business, or side job, and plenty of things going on. Let's face it, younger guys and gals especially will be far less likely to mark those checkboxes. They are not mature yet, probably are still struggling entrepreneurs or freshly employed, and might also have plenty of personal issues yet to solve. So an ideal victim for a self-worth destruction mechanism to take place, if one tries to make it quickly in this industry as a younger individual.

It is therefore important to realize those outside present conditions and be real / practical. Are you trying to make it full-time, do you think that the reasons outlined above qualify for you? Have you observed consistent issues on red days that are somewhat connected to your value systems and your inability of you to meet them? If that's the case something should be done about it so that you inverse the path for the better. There is no right or wrong single path, everyone is different, and your answer will have to be calibrated upon your circumstances.

It is no wonder why many suggest that before getting into markets, one should have a second job, a business, an additional field of interest, a carrying partner, plenty of capital, etc...

If the self-worth is built and raised to a higher level from such activities it is less likely to plunge to problematic levels on red days.

Having little capital saved will increase the impact of losses on negative self-worth because one realizes that is the end playing capacity. And it is not a secret either that for many capital on trading accounts might need to be replenished several times until it finally clicks and performance stabilizes after finding the proper edge. So low capital can impact self-value much quicker than most realize, even those that consider themselves non-materialistic. This game after all requires capital to play with.

Similar goes for relationships where having someone to provide you daily joy will be able to outbalance the negatives of bad days, or the extra business income that comes in every month will prevent someone to question their ability to provide for the family because of poor trading performance. And nothing can destroy a guy's (yes this applies to guys specifically) self-worth quicker than not being able to provide for closest ones and drive the financial situation to unmanageable.

All of those issues are especially common to those who try to make it as full-time and not just part-time individuals in this industry. This does not mean that those issues cannot be ignored or skipped or successfully jumped over, they can be but it is likely that self-worth battering will become an issue at least once if not many more times during the whole process of self-development.

The lone wolf path and advantage of the community

As someone who always felt the lone wolf path is the only way in any innovative or younger sector, because it allows you to be unique (less influenced), more objective, and find value in innovative fields that do not interest many, it took a while to understand why community is a necessary part of the journey, especially when it comes to dealing with financial markets. While it is true that as you pick your LW route, you are more likely to find things that are neglected and extract edges from those without being influenced by the noise, there is also a cost to doing that too much.

Since this is by default solitary industry unless you work on not making it that way, we may face many challenges that will come from that, much of which relate to self-worth and the issue of not dealing well with poor performance.

Taking hardships in the community is always better than soaking them alone, pretty much the majority of people will agree with that in some way or another. But the issue in the trading industry can be as well that, while on the surface community might care about your issues, they won't provide real answers and tactics to solve them, at least from my observations that is what bothered me the most, and why often so little value was being found. If the community cannot provide you direct insight into edge nor can it provide a shoulder to cry on and solve issues, then what advantage does it have against the LW route? Doing proper self-reflection is often far more helpful than input from 100s of different individuals in communities if only you gave yourself enough time to think it through. But still, the communities do matter, because, in the end, this game is not just about solving problems. As someone obsessed with solving problems, and those who might relate to that, it's often that we might neglect the value of community over the long term, in things you don't even notice, until later on. Where the feedback loop of community comes in with your journey is that self-worth and self-value sharing which is a big part of creating that surplus, all of which was explained earlier.

And just to be clear, this does not mean one should strap to one particular community or group of friends over a long while. Jumping from place to place is actually a better idea as it gives you more perspective and gets you find your own place better, where your value is better provided or extracted. But on the other hand, being too consumed in communities without spending time alone on reflecting is also dangerous as you are too exposed on ideas of others without checking them or validating them. Therefore lone wolf path occasionally is productive to give you perspective and time to explore.

To go closer to the issue, the idea and value of community is not to extract value from it, which is essentially what many in this industry seek. Instead, use community for you to provide value to it as much as you can, as long as you think it's the honest value (even if it is not due to your beginner's incompetence perhaps).

Because providing value to someone else and giving a helping hand at the end is what will help to build a little bit more self-worth, and that extra fuel will be needed, when you will have bad performing days. That is something that took me a while to realize, probably more than three years personally. If one is too focused on just extracting the value because you want to learn and grow, but you neglect providing value, or maybe you do provide value but only by mistake without actual intent of doing that (trough conversations), you will miss the point of how much the providing of value can help you to deal with red days when you face them.

However this brings us to another point, how do you provide value if you have not much to s ay yet? What if you think that this is the right to do for your own sake and the sake of others, but you just don't have enough value at your disposal to provide yet? Well, then we head into the second portion of addressing the whole issue outlined in the article, route number 2 as it will be outlined below.

It is still true that if you are one of the quick-dropping self-worth guys those reasons are additionally external out of the market. You can address those and decrease the chance of getting stuck in this loop, but it will take a lot of time, depending on where the issues come from:

1. Monetary value: You don't have what you think you should, and then every loss will pain a lot more, spiral the good progress of stability. Basically, monetary loss of what you cant afford to lose is bigger than the loss of what is okay to loose and can be quickly recovered. Therefore lowering capital risked is needed to match truly what one can afford to lose, so that the negative drag on self-worth is not too great if one's performance is suffering.

2. Relationships: You are having a bad one or lacking and therefore have low-stress release when needed because that can make bad days less bad quickly. Or even worse, bad relationships can create already difficult ground before trading day starts, worsening the chances of creating stable self-worth and impacting performance negative due to cluttered mind.

3. Realistic self-evaluation of skills: the goals you set for yourself might be too aggressive and can quickly contribute to making you feel worse when you underperform versus someone who has more realistic expectations, etc......

None of those are easy to address by any means, it just means that those will provide surplus of value increase and create cushion when red days arrive.

A quick drop of self-worth happens often if you really want to make it quickly in this game and you have a strong passion for the market but you are way too forcing on expectations, basically, you are trying to make everything about this game, and that happens for many since many want to try to do this full time straight away.

So its always helpful to have something else going on, for example for me I realized on the bad day I need to provide some value to someone in this industry even when my P/L is red or even just neutral on a boring day, and that meant learning as much as possible about markets over time so you have some value to add to someone else, as that makes those days when you underperform and your self-value drops a much lesser issue. Or having an interest in something else outside of markets and providing value there on the side while one is learning to trade.

Its a long-term path, you just need to be crystal clear about it and then set on it for a year if you think it's worth it. Nothing in the world is about you only and since this is a very solitary game often you have to find outside value to contribute to, otherwise, your bad days will drag you to deeper levels than they would otherwise. That would be it for route number 1.

The route of increased value-add through skill improvement

Then there is another route, the route 2, which might be more "in control" route. Eventually you realize that most of those negative issues of self-worth come because when you perform poorly (duh you think?!). If you could just perform great all the time much of it would be fixed or would never spring about. So the only real solution to that is to increase your skill level a lot more, and have a better read on market. That might sound impossible, but it's not if one really dedicates an excessive amount of time to it. It's why I place so much attention to research over the past years, a lot of negatives in this industry can be neutralized by just being better at having a good read on market.

However....that just as the path 1 above also takes a lot of time, but if you are like me you know that ahead and the key is just to make it a goal, and then you need to form a realistic plan on how you will achieve that over a realistic period of time (lets say 2 years). Questions you should be asking:

-What kind of research do you need to be doing,

-What backtests are needed to gather right data,

-What sort of analysis of your trades to figure out tiny mistakes,

-What patterns are you missing out there.

-Who are individuals that are ahead that can provide good foundation to build upon

It requires calibration of the right plan and then sticking to it with obviously a lot of dedicated time. Anything that you think improves your read on the market, overall knowledge, and eliminating a mistake or two is by default an increase in skill level. Most when they face issues are not willing to put time into improving themselves but just want to keep playing the way they do and expect the reversal eventually. Or you expect a skill level increase just because you did one full weekend of research on some stocks and now you think you got it, but the reality might be it's just one tiny piece, and you need to keep stacking a lot more of those before results start to show.

As stated before, I did just as many mistakes as anyone else, and still am performing much worse in many areas after so many years where even many beginners are far better. But if there is one advantage I had since early was to define plans well, plans that can be executed and are not just theoretical concepts.

So if one gives a task to oneself "I have to get better at the game to reduce negative self-talk", then the question is how exactly do you want to achieve that. And what matters is what tools and knowledge will you need to learn and deploy, that respond with decent accuracy. In the end, accuracy improvements are what increase the read on the market action, along with selectivity of course. It is important to be hungry for anything out there that might provide an answer, test a lot, and then build upon decent ideas and expand them. This article will not go in-depth on how that is achieved to not to distract from the main issue, but it is one of the roads that many try to take but fail because most of the answers for improving accuracy in markets are not easy to find out there, require plenty of manual research and a lot of outside the box thinking. Many of such subjects have bits and pieces of clues present in general knowledge but you will have to build the right toolsets and ideas by yourself for the majority of it.

If you are an individual who likes to be in control then this might be in your interest, more than trying to find external value drivers to feed your self-worth. It is because to improve your skillset and knowledge of markets is very much within your hands. It is your own time and dedication that will determine the success of that and is therefore much more within your control rather than some outside random force. The only difficult thing is that it is a very tall task, to improve skillset to the point where your performance has major improvement and your understanding of a particular market improves as well is not a tiny task. Months not days, actually it could be even years. And still even with going this route of improving the read on the market significantly versus the guessing, and therefore decreasing red days which cause whole self-worth questioning cascade are still not going to be enough unless that skillset and knowledge increase has value direction elsewhere. It is not enough if monetary extraction is all how you deploy that increased knowledge, that is why it's very helpful if what you learn is directed outwards to feed your own value back at least to some extent.

Regardless of how good you get overtime, everyone still has days where they struggle. And again, the more oriented and focused you are towards markets in general (unbalanced), the more likely it is to still be causing the issue, regardless of overall performance, it does not take much if your self-value is determined by having a green day, every single day. The higher goal you set for yourself, with little room for flexibility, the more likely it is that you might start growing the "monster in the shadows" somewhere down the road.

The monster in the shadows

The self-value questioning part probably springs up more likely to those who become obsessed with something niched for whatever reason. If that is the case, you become zoned in, and as you do, the value drive becomes largely from that single thing.

And on top of that if your obsession is on the field that already is not well respected in society as financial markets arent for example, then you already are starting in a deficit area of self-value or respect, especially if you make everything about it around it on daily basis. Especially when things outside of it are getting ignored (great positives become dulled out because they don't matter as much as the thing on the priority list, even though they totally could) as a consequence, which even increases the deterioration of self-worth. Again all of this questioning of self-worth is not an issue on a typical day, but it can be on deeper red days, especially when red days start to stack up and a difficult month strikes. That is where the monster in the shadows becomes unrevealed. It no longer can be ignored. Or with other words, the emperor has no clothes on anymore.

One can have all of the issues bottled and hidden underneath as described, all it takes sometimes is just one bad month. The bad month of consistently poor performance, and then everything becomes apparent. That is especially true for those very monetary P/L oriented traders who see entire value in this game just out of that and have no further interest in broader areas of financial markets or the game itself and finding the joy in the complexity of it.

Your lower self-worth can be masked for a long time if it's being masked by solid performance, but all it might take in such a case is one bad month to unravel everything, and very deep, nightmare questions become to spring up because the value system is standing on shaky ground for a while, it was just masked by decent monetary/equity performance. What am i doing? Its unstable.

Diversification of value (give and take) is therefore important. Whatever you identify as your value contribution or value extraction mechanism, it should never be a single thing. It has to be multiple sources and they have to be honest. Having too much value-driven from a single thing will always leave you exposed to that one bad month where the whole house of cards might fall apart if one is unaware of that.

But since one thing I am obsessed with personally is using the devil's advocate approach on every single thing (by the way which many find very annoying, as objectivity is not a primary value of many) let me also point out that often having the narrow focus of self-value comes due to having a very specific area of interest (already pointed out earlier), something that a professional athlete might also engage in for example. When you set a very specific goal for yourself, and you set a marker for yourself that this is the industry in which you want to succeed, it is likely to get into an issue where your self worth will be questioned at some point down the road, when you will hit bad month. That's just how it goes. To chase exactly what you want, in a difficult field where there are not many good guides, you have to understand, that price will be paid for that, and that will be revealed when the biggest difficulty arrives.

The more important question therefore will be: Can you overcome it? Can you bump into it many times again and again, but still overcome it and persist? Can you slowly find your interest in additional things, to stretch your value feeding mechanism, so that you endure the challenges? That will be the true determining factor. And what price is acceptable for you, which will be correlated to the factor of whether you really really want it, or you just only slightly want it. And no, you cannot find the answer to that, it is only revealed to you later on by itself.

So this leads to a mixed conclusion. Having narrow interest and plenty of dedication to markets is needed to build good read on behavior, but at the cost of value degradation, and at the same time there will be balancing factor needed to play out which will have to create surplus of value to sustain us trough the challenge. If you expected black or white answer, you wont get it.


For a quick summary, to avoid as much as possible self negative talk (unproductive) and questioning everything about this industry as a long term path, ensure that your self-value:

-Is added by external non-trading or financial markets activities and is not just strictly driven from your performance

-Understand as early as possible that a young individuals path will be more difficult due to external conditions, and do not set too high standards or too quick routes, too optimistic expectations will deprive your self worth if results do not match it

-Large bulk of your value add should not come strictly from monetary P/L performance, but there are external enjoyable things about this industry that you can find value in, or you provide value to

-Do not just be a value extractor, find ways to provide value, but do not force it. Try to ensure the value is real, however, as a beginner, it is likely that one is unable to judge that well. Focusing on value extraction too much will lead to lower self-worth if the value is not fed from an external source.

-Finding real interest in everything about this industry, in general, will always help to decrease the negative impact of red days. If you think that nothing but the monetary gain attracts you to this field, it might be a better idea to stop completely and go elsewhere, unless you can do just fine like that. To outperform well enough, most likely you will need strong passion in an industry like this one, passion, and distraction are what eventually help to cushion the falls of red days. It helps to divert the negatives into some other area of improvement.


Before rounding up the conclusion, please be assured that I am never one to suggest to anyone how to live or what things are or are not worth approaching. This article is not meant to look down from a bird's perspective with a judgmental tone as if I know better. In fact, I don't, pretty much everything I contribute to articles is always from my mistakes, many of which are still unresolved. There is no judgment, just tips on how to stray from poor paths better. But as well, as the saying goes "the mans gotta do what the mans gotta do". Some paths we all just take because of who we are and warnings were given are completely ignored no matter how much anyone tries to pass them to us. That is why a lot of such content might be an interesting (or not) short read, but the practical value might be weak because it takes a lot of effort to implement those "guides".

As ironic as it might be, much of the self-worth negative talk can be solved by just getting good enough (improving skills and understanding market behavior) to limit the poor performance or to become selective enough to execute when needed and no more than that. Think about it this way, whatever your value systems are they are already ingrained with you regardless of your performance in the market. Those with lower self-value will quickly drop into the issue area not because they do so much worse than others, but because their threshold is lower and they already stepped into the market with lower values. Red days all they do is they just expose your real self perceived value. They show you how high you really are.

But in the end, even for those with low self-worth, or just generally being more questionable of their abilities, they won't bother questioning anything when everything goes along the plan. When green P/L days keep coming, the majority do not question anything. So if you are an individual that especially swings from heights to depths very quickly, your self-value is likely too much dollar monetary driven. For whatever the reason, which could be many, that is likely the case, and that is not a great way to operate long term. It can create too much stress, unrealistic expectations, mood swings, and just general struggle.

It is because of that that self-worth and value have to be built around the markets and game itself, especially if one dedicates a lot of time daily into it, rather than being solo driven from end P/L result. It has to be diverse meaning and interest.

But also keep in mind, anyone who brings on themselves a difficult challenge that is as great as trying to make it in this industry full time as a beginner, you are highly likely to step into this trap of self-worth down spiral. That is not to be ashamed of, circumstances just set one to be prone to creating issues due to how the game is set from the start if one selects such a start. But it very much helps if someone sits you down and shines the light on that so that you realize what challenge you might face rather than stepping into it blindly. However whether one absorbs such advice or insight is another thing, I for sure know that if someone presented this to me at an early stage, I would have not absorbed its significance, it would have went through one ear in and the other ear out, unfiltered, unabsorbed.


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5 bình luận

Kelvin Lee
Kelvin Lee
13 thg 1

This and the finding of the edge article is gold for me (beginner) as it helps me be more aware of psychology and strategy fundamentals. I highly recommend you to keep writing more of these as you have a very natural way to teach based off of your experience and expertise on the matter. Also, I recognize this is a great way for you to increase your self-worth by contributing immense value to others in a journalistic and educational way. I’ve subscribed to you and I hope to hear more from you either through your writing or a direct message (one can only hope). PS - I take notes of your quotes as well!


Dario Martins
Dario Martins
27 thg 8, 2023

Why spend your money on trading psychology b.s. books, coaching/mentoring when this man just sums up the only psychological aspect relevant to trading right here, for free. What an awesome article, and of course you can conclude that I identify with a lot of what is written here.

2 years in and my search for my EDGE continues. Oh and by speaking of edge, for me personally that's one of the most enfuriating things whenever I see psychology advice on can trading calmly without an edge will take you anywhere?! Like...."Hey jump of that cliff but in a calm state of mind!" Result will be the end up dead or worse, paralized from your neck down. Now "Jump...but…


Alex Serdiuk
Alex Serdiuk
09 thg 5, 2022

Unique content and highly valuable thoughts! Thank you for your brilliant job!


Leob Leon
Leob Leon
07 thg 5, 2022

Hi. Great blog. "Rigged small cap stocks" series is pure gold. I start to understand market structure.

08 thg 5, 2022
Phản hồi lại

Thanks, glad you liked it 🙂

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