The EQ Trader

Why "trading without emotion" is the worst advice in this entire field, and what to do instead.

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A trader I'll call David, who runs a small futures account and has given me permission to tell this story without his real name, decided in early 2024 that the problem with his trading was that he was "too emotional." He had read three trading books and watched a popular YouTube channel, all of which had told him, in various words, the same thing: emotions are the enemy of good trading. The goal is to be a robot. Trade like the algorithms. Feelings out, profits in.

David took this advice seriously. He set up a battery of mechanical entry and exit rules. He stopped looking at his P&L during the trading day (a reasonable idea, taken too far). He literally taped a piece of paper over the unrealized P&L window on his platform. He started journaling not his emotions but his "deviations from optimal robot behavior." He read The Daily Stoic in the morning. He sat very still at his desk. He breathed deliberately. He told himself, repeatedly, that he was now an unemotional trader.

For about two months, this seemed to work. His win rate inched up. His average loss inched down. He felt, for the first time in years, like a serious trader.

Then March came. The market did a thing the market does sometimes: it changed regimes, sharply, in a way that broke his mechanical rules in a specific way that they were not designed to handle. By March 14, his rules were generating signals that any experienced trader would have recognized as low-quality, but David had committed to the robot. He took every signal. He honored every stop. He felt nothing, on purpose, while doing it.