My Biggest Trading Weakness- and My Method in Combating it, Trading Essays

My Biggest Trading Weakness – and My Method in Combating it – – By AllxDayxRay

Ray D'Argenio
Ray D’Argenio

Me seemingly choosing two careers (trading & poker) that require keen mental dexterity would seem counter-intuitive to an overseer of my life. I’m a highly emotional being. Some blame it on my Italian heritage and upbringing; I’d think most would agree Italians on a whole are a passionate group. I’ve had people in my life turn to astrology to explain my nature: “Scorpios are inherently one of the most emotional signs”. Others of an old school variety would say I’m just a pussy, where they would get met with an unpleasant response because I’m anything but. The reasons for my sensitivity honestly don’t matter and for years I’ve wasted mental energy trying to determine why. I identified my hypersensitivity; how do I cultivate it into my gift instead of my curse?

The correlation to trading is straightforward. It’s well documented that a person in an emotional state is rarely using their reasoning and logical faculties. When you feel angry, discouraged, irritated, frustrated, sad, confused; it’s tough to be of a clear mind. On the converse, I’ve found when I’m over exuberant, overconfident and in general over stimulated, you get the same dampening effect.

While I’m considered a “newbie” in the trading game with just under a year of trading experience, I’m no amateur when it comes to wagering money. Starting off in poker I had success relatively right away. I mean that is what hooks a person right? Winning from the get-go, fast money. Open my laptop, fire up a few tables and watch the account balance grow. I put tremendous dedication in learning the theoretical and technical aspects of poker. What I was ill equipped for was the bad luck that accompanies money waging activities; and poker in my opinion (and the opinion of others I’ve spoken too who’ve venture in both arenas) is far more callous than trading. Poker really teaches you about probabilities in a visceral way. Still to this day its hard to wrap my head around losing as a 95% favorite in a poker hand; why does God hate me? Losing a hand being such a statistical favorite test your fortitude. You played the hand to perfection, got all your chips in the middle near 100% favorite, to then digging in your pocket for more cash befuddled at your misfortune. Losing a hand like this and letting it disrupt your mental equilibrium can and will have dire consequences. In poker we call this “tilt”. Now people’s tilt looks different from individual to individual, but more often than not it leads to pressing the action. You’re down money now and you’re going to do everything in your power to fight back tooth and nail. Lady luck the supreme seductress, played you and left you with the rage of a scorned lover. This is 100% applicable to trading right? Losing a trade on a surefire set up of yours can have the exact same effect. How about a string of 5 losses in a row? 10? The more they compound the bigger the explosion can be. Protection of the account is of the utmost importance.

You might not be inherently as emotional as myself, but you’re human none the less. These are issues we all deal with. So how do I go about combating “tilt”?

  • Understand the Game You’re In

Often “tilt” stems from a lack of understanding. In a poker book that has stood the test of time, in my opinion, where many have failed to do so, author David Skalansky in “The Theory of Poker” said the #1 way to prevent tilt is to not only understand and perfect how to play the game, but understand the role luck plays into the equation. I am going to lose. Being 95% favorite is not 100%. I am not entitled to that pot. My mentor and podcast co-host JJ (vwaptrader1) echoes essentially the same premise. When you understand market mechanics, what drives markets to move, the underlying structure; you’re not going to tilt. There’s a big emphasis on trading psychology in our current environment and rightfully so. But you don’t have to fix your mommy and daddy issues to become a profitable trader. Having a deep understanding is not a cure all, but it’s a huge step in the right direction in curtailing rising emotions that can have disastrous effects on our bankrolls. 

  • Set rules/parameters for losses

A well talked about subject so I won’t go too in depth. Personally though, I’ve been far too liberal in this area. I forget who coined the phrase “maximum pain threshold” as I’d love to give them credit for this idea. We all have a point to where additional losses do not add to the already excruciating pain we feel: we’re numb to any additional money lost. For an extreme example let’s say you lost 50% of your account on a given trading day. You might be beyond tilted at this point to where blowing up the whole account doesn’t add to the pain and frustration you currently feel. For poker players & traders this is a frightening place to be. This leads to account blow ups. This leads to days, weeks, and months of great execution going down the drain. Setting account stop losses prevents you from spewing money. You must be thorough with yourself and set parameters to prevent from breaching your threshold: 3 losses in a row, x% of your account lost, a fixed dollar amount lost. There are no right or wrong ways to go about it. The point is set parameters & rules to prevent yourself from going past your “maximum pain threshold”. 

  • If you have drama or difficulties in your personal life, you may be and probably are prone to tilt

Being a professional poker player, I didn’t necessarily have the luxury to take time off when there was drama in my life (too frequent and much of my own doing). But I had to keep this in mind when I went to the tables. You are in a vulnerable state. Losses that normally do not affect me have the ability to make my blood boil. It can be difficulties in a relationship, the health of a love one, a child struggling in some facet of life. JJ has impeccable discipline when it comes to this. Having a heart condition there are days he is just not feeling it: a lack of energy, lack of clarity. He doesn’t trade. There are people though, that are great at blocking life out and showing up with complete focus. It serves as a distraction from the troubles of everyday life. I believe I fall into this category somewhat. But I cannot forget I’m human. I don’t think you can completely block life circumstances out; I’m not sure it’s possible. When I’m at turbulent periods in my life, I’m apt to shut a potential disastrous day down quicker than normal; I tighten my daily stop losses. Not trading in the first place is never a bad idea, but if you must, be hyperaware of your condition. 

The beautiful thing about trading and poker is that it has taught me principles about life. Being a highly emotional person susceptible to mood swings, these endeavors have taught me how to moderate my temperament and keep my wits about me. All we can do is focus on the process, refine it and push forward with unwavering determination. 


If you want to learn how to use market profile, trade futures & or equites: Trade along side JJ & Ray at or