Excitement vs Regret

Monday, February 23, 2009

I attended a workshop a couple of weeks ago (Van Tharp) and one of the exercises we did was examine where we may have conflict within ourselves.
One of the conflicts I brought up is the uneasy relationship between "excitement" which I usually associate with large positions and "regret".

What is interesting is that both emotions have positive intentions, in my case excitement is there to take me out of my comfort zone, to strive for more, to achieve my goals. Regret also has the positive intention of wishing to prevent feelings of I wish I never did that or I am such an idiot. What is clear from examining these 2 emotions is that they need not be apart and work against one another, rather if regret becomes a part of excitement in that certain ground rules are laid then there can be no cause for disharmony but rather on the contrary there should be better harmony.

How does one achieve this. The secret is to do ones homework and establish that in fact there is a suitable risk reward setup to place the larger trade. If in fact there is this payoff profile then regret has no place as the excitement is duly being rewarded for this increased risk. On the other hand if I am not going to do my homework then regret is correct in staying apart and that conflict should remain until such time as I am able to bring them together.