Difference between amateurs and professionals

Professional trader:Good trading is boring , I have nothing to do all week except wait wait wait patiently , for the righ entry

Professionals understand trading phsychology

Amateur :Good trading is exciting: being scalped 3 times a day , then taking small profits and large losses getting scalped.Stress is good ,Let's say you're walking down a path and a tiger jumps out at you. Instantly, you perceive a threat and adrenaline is released. The tiger emotions is exciting , you fear ,get attacked by market , then I win .It is more like the exciting chase before the sex.

Amateurs are driven by their emotions , stress ,mistakes and ambitions , they don't understand trading psychology.

http://www.trade2win.com/boards/psychology-risk-money-management/45686-trading-psychology.html

http://www.trade2win.com/boards/first-steps/223070-find-great-mentor.html

http://www.trade2win.com/boards/first-steps/223070-find-great-mentor-6.html#post2893944

The subject is far more detailed and beyond the knowledge of most posters , the superior knowledge is obtained by listening to many webinars and reading articles /books by top trading psychologists and other non trading psychologists .These psychologists are Rande Howell , Dr Br Steenbarger , Dr Van tharp , Mark Douglas , Dr Andrew Menaker and a few others .The knowledge of the subject of psychology of these psychologists is way superior to the discussions by non psychologists on forums.These PSYCHOLOGISTS give a far superior understanding of the differences between professionals and amateurs .

The main differences are
1) Trading mindsets 80 % is pychology and 20 % the method .Professionals understand trading psychology
2)Professional's Methods incorporate psychology
3)Professional's Methods have an edge

Professionals trade because they have a trade , amateurs trade because they have to trade , when there is no trade.Professionals are very patient.

The 2% is too high to be used for amateurs.This should be around 0.2 % .

Traders make mistakes , mistakes make traders underperform , subconcious errors and underperformance versus expected back tests due to psychology will result in losses .

Why do amateurs underperform and professionals make money ?Amateurs make more mistakes , professionals rarely trade and make least errors.


Because people make mistakes. The average person will never achieve anywhere near the expected return from their system because they make mistakes.

http://www.trade2win.com/boards/edu...963-trading-plan-template-12.html#post2900068

Very well put !Trading success is 20 % skill 80 % psychology

copy from plan

T RADING PLAN TEMPLATE
5. Know Yourself, Know Your Purpose
5.1 Almost any professional trader will tell you that the key to success in the markets
lies in understanding your own psyche. (Understanding the psyche of fellow traders,
collectively referred to as ‘sentiment’, is also an invaluable tool). Many inexperienced traders
are unprepared for the violent assault on their thoughts and emotions at the start of their
careers. They soon find their heads spinning with euphoria when winning (greed) and the pits
of their stomachs knotted with anxiety when losing (fear). Contrast this with many
professional traders who, it is said, achieve a sort of trading nirvana, whereby their thoughts
and emotions blend into a sea of calm regardless of whether they are winning or losing. Their
heads do not spin and their stomachs do not churn – ever. For you to achieve this exalted
state, you will need to know yourself and how you will react to both winning and losing
positions. Once armed with this information, your trading plan can incorporate some of the
positive aspects of your psychological make-up and filter out some of its negative aspects.

Planning and executing involve different skills that draw upon different parts of the brain. Planning the trade is largely a function of your intellect, the prefrontal cortex PFC. You create your plan in a relatively calm state of mind with your PFC in charge. But when it comes time to execute the plan, other areas of your brain will become involved.

There should be a execution plan , and a plan to execute under stress , emotions etc.To execute the plan , one needs to control the brain and have a plan to control .When executing the brain is in a state of uncertainty ,emotions (your emotional brain is faster and doing the execution) , stress response with reactive stress patterns.

This is what professional psycholosists say and professional traders have experienced.

https://www.amazon.com/Thinking-Fas...=2025&creative=165953&creativeASIN=0374533555

a very good book about processing information and critically analyzing while avoiding the cognitive traps.

i highly recommend it. You can't put it down...fascinating! i think you'd like it foroom lluzers

The impact of overconfidence on corporate strategies, the difficulties of predicting what will make us happy in the future, the profound effect of cognitive biases on everything from playing the stock market to planning our next vacation―each of these can be understood only by knowing how the two systems shape our judgments and decisions.

Piphoe

Just google search and youtube is enough , more info than we can handle and plenty of same for free on search engines.Clones!



http://www.trade2win.com/boards/edu...stress-can-ruin-your-trading.html#post2900110

Trading is very simple and easy , in this post I show you how succesful professionals trade.They ex[ploit the same edge as in this post.

http://www.trade2win.com/boards/forex/223410-how-profeessionals-trade-forex.html

foroom lluzers said:

Professional trader:Good trading is boring , I have nothing to do all week except wait wait wait patiently , for the righ entry

Professionals understand trading phsychology

Amateur :Good trading is exciting: being scalped 3 times a day , then taking small profits and large losses getting scalped.Stress is good ,Let's say you're walking down a path and a tiger jumps out at you. Instantly, you perceive a threat and adrenaline is released. The tiger emotions is exciting , you fear ,get attacked by market , then I win .It is more like the exciting chase before the sex.

Amateurs are driven by their emotions , stress ,mistakes and ambitions , they don't understand trading psychology.

http://www.trade2win.com/boards/psychology-risk-money-management/45686-trading-psychology.html

http://www.trade2win.com/boards/first-steps/223070-find-great-mentor.html

http://www.trade2win.com/boards/first-steps/223070-find-great-mentor-6.html#post2893944

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Yes I agree. Trading is boring as **** most of the time.Waiting for the right setup. Sometimes a whole day doing nothing. Then pouncing on the right setup. Snooze and lose.

Dn1977 said:

Yes I agree. Trading is boring as **** most of the time.Waiting for the right setup. Sometimes a whole day doing nothing. Then pouncing on the right setup. Snooze and lose.

Click to expand...

While waiting use that time to evaluate other strategies on a separate system.

Place another desk at right angle, a separate computer and displays. A slight turn of head to watch for your setups while you play around.

piphoe said:

While waiting use that time to evaluate other strategies on a separate system.

Place another desk at right angle, a separate computer and displays. A slight turn of head to watch for your setups while you play around.

Click to expand...

With all due respect , I have spent the last 12 years doing so and I learn something new everyday. And no doubt I will carry on learning.

Dn1977 said:

With all due respect , I have spent the last 12 years doing so and I learn something new everyday. And no doubt I will carry on learning.

Click to expand...

ok. thats great didn't mean to suggest otherwise or offend. i think too many may try to do too much on one setup. computers, displays and desks are cheap...i setup a separate sys just for fooling around with ideas.

piphoe said:

ok. thats great didn't mean to suggest otherwise or offend. i think too many may try to do too much on one setup. computers, displays and desks are cheap...i setup a separate sys just for fooling around with ideas.

Click to expand...

No problem. I totally agree that it takes constant testing new strategies and refinement. I like to keep things simple with not to much clutter on the charts. But so many ways to skin a cat.

the true difference b/w ...proffs have proffs peers to draw from. IN THE PROP OFFICE. retail, well we are mostly alone to fend for ourselves.

we can do ok too though

piphoe said:

the true difference b/w ...proffs have proffs peers to draw from. IN THE PROP OFFICE. retail, well we are mostly alone to fend for ourselves.

we can do ok too though

Click to expand...

Was in a prop shop for 4 years before it went tits up. Cft financials in London. Better of at home so to not overtrade.

Dn1977 said:

Yes I agree. Trading is boring as **** most of the time.Waiting for the right setup. Sometimes a whole day doing nothing. Then pouncing on the right setup. Snooze and lose.

Click to expand...

Fear and greed are potent influences on trading, but the greatest trading problems, I find, are addictive in nature. Successful traders really want to trade; they have a passion for trading. Addictive traders need to trade; they have a passion for action and excitement.

An addictive trader will not manage his risk. That is because risk is part of the high.

Advice/opinion from a phd doctor (real doctor)

foroom lluzers said:

Professional trader:Good trading is boring , I have nothing to do all week except wait wait wait patiently , for the right entry

Click to expand...

Bill Lipschutz summed it up when he said, "Out of 250 trades in a year, it comes down to five, three of those will be wrong and you will lose a fortune and two will be right and you will make a fortune; for the other 245 trades-you should have been sitting on your hands."

I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime.

Jim Rogers

foroom lluzers said:

I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime.

Jim Rogers

Click to expand...

For me, that just about sums up my experience with trend trading. Most of the time is spent watching and waiting – exceedingly boring but very profitable. Apart from "walking over to the corner and picking it up" the most strenuous thing is to summon up the mental strength to get rid of a trade that is not working.

Learning to be patient and wait, and being decisive about failed trades are probably the two things that took me longest to learn but paid the highest dividends.

foroom lluzers said:

I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime.

Jim Rogers

Click to expand...

On youtube videos, Jim Rogers said he's the worst timer in the world. How is he able to time the money laying in the corner that perfectly ? What kind of magic is this ?

EnlightenedJoe said:

On youtube videos, Jim Rogers said he's the worst timer in the world. How is he able to time the money laying in the corner that perfectly ? What kind of magic is this ?

Click to expand...

He picks entries that are fundamentally robust , then sits patiently for a few years after entry.The entries are the ones he can't lose on .

The market timing of the entry is not important , we can't time the markets , we don't know what is going to happen next , it is the exit or the patience which pays .

Take an example of Apple shares or coca cola shares , Warren Buffet was patient in the entries and patient in exits.