Coaching Case Study - How This Trader Learned To Stop Going On FOMO-Tilt For Good!Nov 17, 2023
Hi Traders! (watch this short video first and then read the more comprehensive explanation below)
Today I worked with a trader who is usually a consistent trader, but last Monday he had lost emotional and mental control going on a mini tilt. Even though he finished the day up EU 500 in profit, his performance was subpar.
He knew that if he wouldn't resolve these issues immediately, he would take the baggage into his next trading day, which means he would be at high risk of making his trading decisions from a fear mindset rather than from his usually calm and confident core-self, the HQ of his consistent trading performance.
In the first step we dissected in detail what happened during the trading session:
You can see from the chart annotations that his first entry was phenomenal! He following his strategy to the T. He rode the DAX all the way up exiting as per his plan at a previous resistance zone, banking EU 200. At that stage, he still felt focused and grounded.
But then suddenly something shifted and FOMO was triggered. He took a long position even though the price action was still in distribution and there wasn't even a long setup according to his strategy! And that was the moment when he started going on tilt putting on another 6 long losing trades that were off-strategy.
In the second step we looked at potential triggers that caused him going on tilt:
Turns out the trouble actually had already started last week. The DAX charged to the upside so strongly, there were a few occasions when he doubted his setups and consequently missed out on several phenomenal trades, that could have resulted in EU 1,000 + profits. That's when his FOMO was already subconsciously triggered but he wasn't consciously aware of it!
This time, his subconscious was determined not to miss out again!
So you can see the original trigger was an unresolved emotion from a previous trading session that affected his mindset triggering FOMO in the current session.
But wait, there was more!
Compounding on top of the FOMO was that the second trade cost him EU 145, so essentially he gave back 3/4 of the first profit. That loss triggered in him an impulsive urge to make the loss back instantly, which resulted in a further 5 'trying to catch the falling knife off-system' long entries. It wasn't even his strategy to go long, these next 5 trades were solely driven by impulse.
So you can see, there were two triggers at play that he wasn't consciously aware of at the time, that triggered the tilt: The fear of missing out again on an epic trade opportunity and also the intense urge to make a loss back instantly.
Third step: Disarming the emotional triggers:
Even though he managed to finish the day with a EU 500 profit, his performance was subpar and he knew he had to deal with it straight away to not let it happen again. What makes him a great trader though is that as you can see, he has no problem taking his losses!
But he doesn't like to settle for mediocrity, he knows he can be, do and have better and that's what he is striving for. Now that we identified the emotional triggers, the third and last step was to release the emotional triggers with powerful coaching techniques so that even if he makes mistakes, impulsiveness is not being triggered in the first place.
I hope this will help you with improving your trading performance too.
With a toast to your trading profits