experience is the culpit of anxiety trading.
human brain learns things by experience through association, generalization etc. driving a car most time is fun, but if you once had an accident, particularly serious one or almost killed you, you will never forget, when you pass that place again, you will pay particular attention to cars or yourself, you will be very nevous it seems you will have another one again.
trading is the same thing. when you win, you have fun. when you lose,even a small loss, next time when the similar situation occurs, you may freeze or hesitate or second guess a good trade(you do not want to get hurt again subconciously), ...
the only remedy is: accept the fact you will have losers, but do not put a too big bet enough to knock down your whole account ( a well predefined risk that you can accept or will not hurt you much, my rule is not affect my account liqidity: even I take that loss, I still can trade as usually), this will create severe anxiety. for example, a 5k account, you can take 50~100 buck loss per trade, will not have great impact on your account liqidity. if you take 1k loss, that will seriously threat your account survival.
actually, there is good trades in option with 50~100 bucks loss/risk. you just trade one lot penny option or using spread, easily limit your risk under this level. of course if you trade future, 100 bucks just several ticks, a random move will knock you out, so that is not suitable or you will be very nervous, if you are nervous, that means you lose objectivity and you can not trade that thing. take AAPL option, when you see most option price is very expensive compared to your account, but when spread strategy is employed, your risk can be easily defined to your acceptable level. spread methods is used to minimize option premium risk.
I trade future a lot, but late I found option is better. one, I can easily define my trading idea; second can clearly define my risk; third, I can adjust my size easily; fourth the most important is the leverage is far better than future, less money better reward, double/ten fold reward is easily achieved. with future, often my idea is right, but the market easily hit my stop loss ( I am right, but I lose), if I do not use stop loss, when the market trends long time against me, I lose more, so that puts me in a bad dilama: if I place a stop loss, I may lose with good idea because of market noises, if I do not place a stop loss, I may be totally wrong and lose big, so I must put a stop loss there. the stop loss thing makes me nervous, that seriously affect my trading reaction speed ( I need setups to initiate trade, not my sound judgement), for example, when in a uptrend, I bought EMA touching, but because of risk/setup definition, often I buy the thrust in order to put a stop loss (saw the low).
I normally trade ES/CL/NQ, but I found I can not easily define my risk because of volatilty, the reality is "right/wrong is vague, you can not exactly pindown where to drop/to rally". with my stop loss, I get hit easily or frequently. like this week, I saw ES has good support at 1220~1230, if I bought 1220, then use recent new low to place a stop loss, I may be stopped out at 1218.75 (former low is 1219.75). I bought 100lots of SPY 124 call with averaging price 0.93, sold at closing friday with 2.8, that is three times gain. but if I bought 9k ES, just two lot(overnight), or the best 4lot for intra-day, suppose I bought the lowest 1220, and out at friday closing 1263.75, I just net 43.75 points, or 2 times 50 and 43.75=4.5k gain, you may say ES is not risker than spy option, when you bought 9k ES not means you take 9k risk, in option 9k option may be worthless this friday (real risk),but in order to take real 9k risk in ES, you may need far larger margin (you may need trade 20lot, that needs a 100k account).
with no stop loss to consider, I am not nervious any more. I do not need frequently check the quote or worry about overnight/weekend adverse development (pay too much attention to market noises) to take my stop loss then late it is just some crap market noise. I can ignore those noises totally, focus on those good trades. I am happy. I do not over trade any more (try to recoup stop loss created loss, that greatly reduce the quality of my trades, most are impulsive, there is no sound thoughts).
http://www.elitetrader.com/vb/showthread.php?s=&threadid=230183&perpage=6&pagenumber=5
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