V.13:08 (342-344): Stopping Points in Trading by Ari Kiev, MD
This psychiatrist, who teaches strategies for trading success, discusses the identification and management of psychological stopping points that can limit your success as a trader.
It happens to everyone sooner or later: Disaster strikes. When the market goes against you, automatic physical and emotional stress responses may manifest themselves as unplanned withdrawal or overtrading. When this occurs, a cycle of misinterpretation and overreaction to the marketplace remains alive until the trader can learn to deal with the adverse events through a more proactive and disciplined trading strategy.
The stopping point is the whole sequence of events, reactions, interpretations and automatic decision making that characterizes your approach to life and trading that may keep you from being fully engaged in trading opportunities.
A stopping point can even be the absence of a trading objective. It rationalizes your position by the fact that it is
consistent and satisfactory, when it may in fact be a cover for your unwillingness to take a larger risk.
To be able to act, you must know when your stopping point has been reached and when you are trading in an
unsuccessful pattern. Everyone has such a stopping point, and most traders evince several of the following patterns that reflect conflicts that are repeatedly expressed in unconscious negative behavior.