Yamato
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I updated my index.html:
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Yamato
Legendary member
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- 9,840
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- 246
Yamato
Legendary member
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- 9,840
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- 246
If there is one major crime I've committed in all these weeks I've been away and even before I stopped writing here, that crime is this: impatience.
I've waited for months before GBL was ready to fall, and then I closed it the day before it began its 300 ticks fall, because I needed the margin for something else - something which I was doing in the meanwhile, because I was being impatient.
Then I ventured on the JPY again, long. I was right. But once again, impatient. Today, I closed it just hours before it rose hundreds of ticks, after I had been waiting weeks for this move. I made half of what I could have made, because of impatience.
As Jesse Livermore wrote:
It takes a very modest person to be patient. You have to first acknowledge that you're at the mercy of the market and you cannot control them in any way, that you cannot even waste your time wishing and hoping. And I am anything but modest. I still need a lot of humiliating experiences to become modest enough for the markets.
Another quote that is right for me is this:
10 Things I Wish I Knew When I Started Trading | The bclund BlogThe bclund Blog
That's why I'll stop writing, because I don't need to brag about anything, I don't deserve to do so, and even if I did, it is extremely counter-productive in that it boosts your ego. I need to become ego-depleted, and writing a journal doesn't help at all.
At any rate, I wrote all this for the few readers, who might be learning something from my experiences. Just for them. For me it is counter-productive to even have written it, because the more I write about something, the less I work on it. It's as if I left all my efforts on the page I wrote. It's as if writing about a problem, makes you stop worrying about it, because it makes you feel that you've solved it, when in fact you haven't.
I've waited for months before GBL was ready to fall, and then I closed it the day before it began its 300 ticks fall, because I needed the margin for something else - something which I was doing in the meanwhile, because I was being impatient.
Then I ventured on the JPY again, long. I was right. But once again, impatient. Today, I closed it just hours before it rose hundreds of ticks, after I had been waiting weeks for this move. I made half of what I could have made, because of impatience.
As Jesse Livermore wrote:
It takes a very modest person to be patient. You have to first acknowledge that you're at the mercy of the market and you cannot control them in any way, that you cannot even waste your time wishing and hoping. And I am anything but modest. I still need a lot of humiliating experiences to become modest enough for the markets.
Another quote that is right for me is this:
10 Things I Wish I Knew When I Started Trading | The bclund BlogThe bclund Blog
That's why I'll stop writing, because I don't need to brag about anything, I don't deserve to do so, and even if I did, it is extremely counter-productive in that it boosts your ego. I need to become ego-depleted, and writing a journal doesn't help at all.
At any rate, I wrote all this for the few readers, who might be learning something from my experiences. Just for them. For me it is counter-productive to even have written it, because the more I write about something, the less I work on it. It's as if I left all my efforts on the page I wrote. It's as if writing about a problem, makes you stop worrying about it, because it makes you feel that you've solved it, when in fact you haven't.
Yamato
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lesson #1: don't anticipate the reversal
Pretty unexpected. I feel like writing again, just when I said I would stop.
However, I will still try my new experiment of "ego depletion" (I'll tell you more about it in the future).
Wait for the second bounce and don't try to catch the first bounce. Of course everything else also has to be in place. Too much to talk about as regards "everything else"... but for now let's just say: don't anticipate the reversal, if that's what you're betting on. In other words, don't worry about being late. That way, you will avoid being early a zillion times.
Pretty unexpected. I feel like writing again, just when I said I would stop.
However, I will still try my new experiment of "ego depletion" (I'll tell you more about it in the future).
Wait for the second bounce and don't try to catch the first bounce. Of course everything else also has to be in place. Too much to talk about as regards "everything else"... but for now let's just say: don't anticipate the reversal, if that's what you're betting on. In other words, don't worry about being late. That way, you will avoid being early a zillion times.
Yamato
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lesson #0: use the stoploss, get used to losing
Except for my fixation with GBL's stoplosslessness, the rule is to use the stoploss, because once you have that method, you're much stronger.
To do so, you must accept the idea of being a "loser". You must take so many losses that you just don't care any more about them. I am not at that point yet.
In a way it is very much like they say in this song:
Dream On by Aerosmith lyrics - YouTube
"you've got to lose to know how to win" (minute 1:24)
In fact, this is the concept I was talking about earlier. In my opinion, the only way to be a trader, a discretionary trader, is to not be afraid of being a loser. You have to train yourself all day long, in all situations, to see yourself as a loser and not be afraid of it: "so what if I lose?". Even in arguments: don't feel like you have to win every argument. There's no shame in losing. Only when you accept that you can be a failure, that you don't have to be a success, then you have a chance of becoming a profitable trader.
Which I am not yet. I am a major loser. And that is OK.
Except for my fixation with GBL's stoplosslessness, the rule is to use the stoploss, because once you have that method, you're much stronger.
To do so, you must accept the idea of being a "loser". You must take so many losses that you just don't care any more about them. I am not at that point yet.
In a way it is very much like they say in this song:
Dream On by Aerosmith lyrics - YouTube
"you've got to lose to know how to win" (minute 1:24)
In fact, this is the concept I was talking about earlier. In my opinion, the only way to be a trader, a discretionary trader, is to not be afraid of being a loser. You have to train yourself all day long, in all situations, to see yourself as a loser and not be afraid of it: "so what if I lose?". Even in arguments: don't feel like you have to win every argument. There's no shame in losing. Only when you accept that you can be a failure, that you don't have to be a success, then you have a chance of becoming a profitable trader.
Which I am not yet. I am a major loser. And that is OK.
Last edited:
Yamato
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lesson #2: the markets don't give a **** about you
Quite often, when it goes your way, you feel the gods are with you, and when it goes against you, you feel the gods are fooling you.
Well, until you feel that way, it's impossible to observe the markets objectively and to act rationally.
As Lund said here:
10 Things I Wish I Knew When I Started Trading | The bclund BlogThe bclund Blog
Quite often, when it goes your way, you feel the gods are with you, and when it goes against you, you feel the gods are fooling you.
Well, until you feel that way, it's impossible to observe the markets objectively and to act rationally.
As Lund said here:
10 Things I Wish I Knew When I Started Trading | The bclund BlogThe bclund Blog
Yamato
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lesson #3: focus on THE method rather than on a specific trade
The trade may work, be profitable, and you might have used the wrong method, and bring your account from 4k to 40k and then back to 4k, which has been my typical experience, year after year.
That is the wrong method. I am a major loser. Right. It is OK.
Right, B.C.Lund again:
10 Things I Wish I Knew When I Started Trading | The bclund BlogThe bclund Blog
Let us be that "schlub at the ice cream store". I don't have a reputation to preserve. I am a loser, and always will be, officially. Then whatever extra money I make on the side, so much the better. Officially I have to be ok with being a loser, and never again brag about any winning trade, winning streak, upward equity curve.
What matters, again, is not being right on a trade or being right on a six-months winning streak, or showing off a winning equity curve. That way, you will blow out your account sooner or later. What matters is not your reputation on a journal. In fact, from now on, I am officially and forever an unprofitable trader who likes to write his thoughts on a journal. I don't have to prove anything, I don't have to brag about anything and no one has to praise me.
What matters is that, aside from what your reputation is, and in fact you should have none -- and no expectations to burden you -- what matters is that, behind the scenes, you are developing a profitable method, even if it makes you lose on your next trade.
You should be more satisfied about losing with the right method, than winning with the wrong method. And this is exactly the opposite of what I've been doing lately, so focused as I was on showing how good I am.
In other words, martingale will make you win 9 times out of 10, and, the tenth time, it will make you blow out your account.
Using the stoploss may also blow out your account, much more slowly. But at least you will not be fooling yourself as you are, when you engage in martingale.
Maybe I'll stop here, and won't write again for a few months, or maybe I'll write again. What's important is that this journal doesn't become an addiction. It has to be useful.
Also, it must not be a place where I get rewarded for winning or rewarded for anything. There must be no ego-boosting, nor pride, nor anything. Ego-boosting would mean that I come here and tell you how much I just made on a trade, and I glorify myself, and... basically if I do that, it is a sure way to hurt my own trading. My own trading , profit or losses, must stay out of this journal.
I may be winning, like in the last six months, and be doing the wrong things, or I may be losing despite doing the right things. The methodology I discuss might be the only thing to matter. My own results must stay out of this journal, or it will affect them adversely.
The trade may work, be profitable, and you might have used the wrong method, and bring your account from 4k to 40k and then back to 4k, which has been my typical experience, year after year.
That is the wrong method. I am a major loser. Right. It is OK.
Right, B.C.Lund again:
10 Things I Wish I Knew When I Started Trading | The bclund BlogThe bclund Blog
Let us be that "schlub at the ice cream store". I don't have a reputation to preserve. I am a loser, and always will be, officially. Then whatever extra money I make on the side, so much the better. Officially I have to be ok with being a loser, and never again brag about any winning trade, winning streak, upward equity curve.
What matters, again, is not being right on a trade or being right on a six-months winning streak, or showing off a winning equity curve. That way, you will blow out your account sooner or later. What matters is not your reputation on a journal. In fact, from now on, I am officially and forever an unprofitable trader who likes to write his thoughts on a journal. I don't have to prove anything, I don't have to brag about anything and no one has to praise me.
What matters is that, aside from what your reputation is, and in fact you should have none -- and no expectations to burden you -- what matters is that, behind the scenes, you are developing a profitable method, even if it makes you lose on your next trade.
You should be more satisfied about losing with the right method, than winning with the wrong method. And this is exactly the opposite of what I've been doing lately, so focused as I was on showing how good I am.
In other words, martingale will make you win 9 times out of 10, and, the tenth time, it will make you blow out your account.
Using the stoploss may also blow out your account, much more slowly. But at least you will not be fooling yourself as you are, when you engage in martingale.
Maybe I'll stop here, and won't write again for a few months, or maybe I'll write again. What's important is that this journal doesn't become an addiction. It has to be useful.
Also, it must not be a place where I get rewarded for winning or rewarded for anything. There must be no ego-boosting, nor pride, nor anything. Ego-boosting would mean that I come here and tell you how much I just made on a trade, and I glorify myself, and... basically if I do that, it is a sure way to hurt my own trading. My own trading , profit or losses, must stay out of this journal.
I may be winning, like in the last six months, and be doing the wrong things, or I may be losing despite doing the right things. The methodology I discuss might be the only thing to matter. My own results must stay out of this journal, or it will affect them adversely.
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Yamato
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lesson #4: you need at least SOME will power
You don't need a total control over every aspect of your life. Say you have a mosquito bite and you feel like scratching yourself. You don't need so much will power as to never scratch yourself again from a mosquito bite. Nor do you need so much that you will never smoke a cigarette again, eat a cake again, swear again, in other words, you cannot expect yourself to be in total control of your impulses.
But if, like me, you're the type of person who cannot abstain from eating anything that is in the refrigerator, one who engages in compulsive behaviors... unable to control most of his urges... then you either change yourself, or you'll simply lose in trading, because trading is made of trading urges that you have to reject.
I believe self-control is like a muscle. Like Adamus said, it does reach a level where it gets depleted and you will give in to some urges. But the amount of self-control can be increased, just like a muscle can get stronger and stronger - although there will be a point when the muscle will reach its limit.
So I am training myself, in two ways. I can work on 1) my self-control and also on 2) my tolerance to losing and "ego-depletion" (see my point #0, about using the stoploss, accepting losses, modesty, patience, and avoiding perfectionism).
Examples:
1) self-control
You can postpone or eliminate gratification: at work I've been doing it. I said to myself: let us process 10 suspicious transaction reports without taking a break. Little by little, I managed to process 40 STRs in one day, which is impossible to anyone else, and why? Because I didn't take a single break during the entire day. Then of course today when I left work, after doing another 30 of them, for a total of 70 STRs (with zero mistakes) in 2 days, I went to a pastry shop and ate like 5 cakes in a row. So what? I am experimenting with my self-control. The objective would be now to manage self-control at work and self-control in the first hour after I leave work, which is usually the hour where I pay the price for restraining myself all day at work. But I am improving, a whole lot. I believe self-control can be trained and increased.
2) accepting losses, accepting being wronged, losing your ego.
I talk to relatives, and I hear their nonsense and instead of giving in to the usual urge of telling them how much they're wrong, I say "hey, maybe so". This is both a test of my will power, and of my tolerance for being wronged, and part of the process of killing my ego, because your ego is mostly useless and harmful. I will be honest. I won't give up on honesty. But for the rest, screw my ego. I don't care to prove that I'm better than everyone else. I must not care.
Another example of working on ego-depletion and on my tolerance to being wronged (which will come in handy when the markets will "wrong" you - which all my life has hurt me so much, morally speaking) is the neighbors. Remember all my complaining about the neighbor slamming her door and the other child neighbor crying loudly, running up and down? Well, I moved to the floor upstairs so I don't have to hear him, but when it happens now and I hear these guys making unpleasant loud noises, i take it as a great opportunity to learn tolerance, not for the sake of it, but in order not to lose rationality in the face of adversity.
And finally, for all these things, one thing to keep in mind is that music and alcohol will alter your self-control and mess with your rationality.
That's why they say "in vino veritas". You lose all self-control when you're drunk. And when you hear music, it will most likely affect your trading decisions. You can do all you want, but it's something to bear in mind.
You don't need a total control over every aspect of your life. Say you have a mosquito bite and you feel like scratching yourself. You don't need so much will power as to never scratch yourself again from a mosquito bite. Nor do you need so much that you will never smoke a cigarette again, eat a cake again, swear again, in other words, you cannot expect yourself to be in total control of your impulses.
But if, like me, you're the type of person who cannot abstain from eating anything that is in the refrigerator, one who engages in compulsive behaviors... unable to control most of his urges... then you either change yourself, or you'll simply lose in trading, because trading is made of trading urges that you have to reject.
I believe self-control is like a muscle. Like Adamus said, it does reach a level where it gets depleted and you will give in to some urges. But the amount of self-control can be increased, just like a muscle can get stronger and stronger - although there will be a point when the muscle will reach its limit.
So I am training myself, in two ways. I can work on 1) my self-control and also on 2) my tolerance to losing and "ego-depletion" (see my point #0, about using the stoploss, accepting losses, modesty, patience, and avoiding perfectionism).
Examples:
1) self-control
You can postpone or eliminate gratification: at work I've been doing it. I said to myself: let us process 10 suspicious transaction reports without taking a break. Little by little, I managed to process 40 STRs in one day, which is impossible to anyone else, and why? Because I didn't take a single break during the entire day. Then of course today when I left work, after doing another 30 of them, for a total of 70 STRs (with zero mistakes) in 2 days, I went to a pastry shop and ate like 5 cakes in a row. So what? I am experimenting with my self-control. The objective would be now to manage self-control at work and self-control in the first hour after I leave work, which is usually the hour where I pay the price for restraining myself all day at work. But I am improving, a whole lot. I believe self-control can be trained and increased.
2) accepting losses, accepting being wronged, losing your ego.
I talk to relatives, and I hear their nonsense and instead of giving in to the usual urge of telling them how much they're wrong, I say "hey, maybe so". This is both a test of my will power, and of my tolerance for being wronged, and part of the process of killing my ego, because your ego is mostly useless and harmful. I will be honest. I won't give up on honesty. But for the rest, screw my ego. I don't care to prove that I'm better than everyone else. I must not care.
Another example of working on ego-depletion and on my tolerance to being wronged (which will come in handy when the markets will "wrong" you - which all my life has hurt me so much, morally speaking) is the neighbors. Remember all my complaining about the neighbor slamming her door and the other child neighbor crying loudly, running up and down? Well, I moved to the floor upstairs so I don't have to hear him, but when it happens now and I hear these guys making unpleasant loud noises, i take it as a great opportunity to learn tolerance, not for the sake of it, but in order not to lose rationality in the face of adversity.
And finally, for all these things, one thing to keep in mind is that music and alcohol will alter your self-control and mess with your rationality.
That's why they say "in vino veritas". You lose all self-control when you're drunk. And when you hear music, it will most likely affect your trading decisions. You can do all you want, but it's something to bear in mind.
Last edited:
Yamato
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self-control and ego-depletion training
My objective will be to play the chart game till you don't get mad and take it personally anymore:
Chartgame.com - The time-lapse stock trading game
Is it possible? Can I undo my life, my personality and delete my pride?
I found out that I get mad at losing on the chart game just as much as I get mad and frustrated with real trading. This is perfect. I can use it to practice until I can approach it as a mechanical and statistical thing.
In life it's rare that you find something as frustrating as trading. Video games are easier to learn. There's a way to play them, and it's pretty clear how that is. There's a way to improve, and it is pretty clear which way that is. With trading, some people, most of the people, claim that it cannot be learned because it is random. But even among us who believe it can be learned (my automated systems make money, so I have the proof), given that even the profitable traders lose every once in a while, it is much harder to learn than a video game, where one action always produces the same outcome.
With trading instead you don't know if you're losing because of the wrong methodology or because of bad luck and vice versa: you don't know if you're winning because you were lucky or because you're doing something right. There's no video game as deceptive as trading is. And yet it can be figured out, by all means. With automated trading I figured it out already, but I can't apply that with my own intraday trading: it is too slow and there is no way I could ever implement that much patience.
Also, I have to practice a fixed methodology for entering (that thing I said in an earlier post about waiting for confirmation, being late and not anticipating), and a fixed methodology for exiting.
If you say you exit here (as a stoploss) and there (as a take profit), you have to do it.
The fact that the chart game is a daily time frame and not an intraday is only a small problem, because the rhythm of the markets and how your mind reacts to it, is the same on every time scale.
Being proud, having an ego and so on, is the biggest part of the problem, and the chart game can help you detect whether you have that problem, and maybe it can help you get rid of it. At least that is what I'll be working on, with the premise that I'm a total loser and that I'll be losing all my life and that is OK. No pride, no pride, no pride.
With pride, come all these problems: perfectionism, worrying about your reputation, revenge trading... your ego must not exist.
...
A good first exercise is to set a stoploss and a takeprofit and exit exactly where you say you'd exit. Little does it matter if you realize it was a bad choice.
1) set an exit point
2) execute it
A second step is to deal with your emotions of regretting an early exit or a missed trade. Deal, neutralize, and hopefully getting to the point where you don't feel those emotions anymore. The biggest threat is feeling those emotions and allowing them to trigger revenge trading, which is the effort of making back what you lost or the profit you missed. In other words, getting back at the market. Whether it works or not, it is in my opinion harmful in the long run.
I used to trade like this all the time.
My objective will be to play the chart game till you don't get mad and take it personally anymore:
Chartgame.com - The time-lapse stock trading game
Is it possible? Can I undo my life, my personality and delete my pride?
I found out that I get mad at losing on the chart game just as much as I get mad and frustrated with real trading. This is perfect. I can use it to practice until I can approach it as a mechanical and statistical thing.
In life it's rare that you find something as frustrating as trading. Video games are easier to learn. There's a way to play them, and it's pretty clear how that is. There's a way to improve, and it is pretty clear which way that is. With trading, some people, most of the people, claim that it cannot be learned because it is random. But even among us who believe it can be learned (my automated systems make money, so I have the proof), given that even the profitable traders lose every once in a while, it is much harder to learn than a video game, where one action always produces the same outcome.
With trading instead you don't know if you're losing because of the wrong methodology or because of bad luck and vice versa: you don't know if you're winning because you were lucky or because you're doing something right. There's no video game as deceptive as trading is. And yet it can be figured out, by all means. With automated trading I figured it out already, but I can't apply that with my own intraday trading: it is too slow and there is no way I could ever implement that much patience.
Also, I have to practice a fixed methodology for entering (that thing I said in an earlier post about waiting for confirmation, being late and not anticipating), and a fixed methodology for exiting.
If you say you exit here (as a stoploss) and there (as a take profit), you have to do it.
The fact that the chart game is a daily time frame and not an intraday is only a small problem, because the rhythm of the markets and how your mind reacts to it, is the same on every time scale.
Being proud, having an ego and so on, is the biggest part of the problem, and the chart game can help you detect whether you have that problem, and maybe it can help you get rid of it. At least that is what I'll be working on, with the premise that I'm a total loser and that I'll be losing all my life and that is OK. No pride, no pride, no pride.
With pride, come all these problems: perfectionism, worrying about your reputation, revenge trading... your ego must not exist.
...
A good first exercise is to set a stoploss and a takeprofit and exit exactly where you say you'd exit. Little does it matter if you realize it was a bad choice.
1) set an exit point
2) execute it
A second step is to deal with your emotions of regretting an early exit or a missed trade. Deal, neutralize, and hopefully getting to the point where you don't feel those emotions anymore. The biggest threat is feeling those emotions and allowing them to trigger revenge trading, which is the effort of making back what you lost or the profit you missed. In other words, getting back at the market. Whether it works or not, it is in my opinion harmful in the long run.
I used to trade like this all the time.
Last edited:
Yamato
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lesson #5: self-sabotage is not the explanation for losses
Just as in "lesson #2: the markets don't give a **** about you", I said that no one is plotting to make you fail or succeed, and the markets do not care at all about you, I now have to stress out (to myself, mainly) that, out of the many good explanations for a lack of profitability, you cannot count the "self-sabotage" explanation, whereby if you fail, it is because you really do not want to allow yourself to succeed.
You might have to deal with counter-intuitive situations in trading, that make you close a position when it's making money and make you keep it open when it's losing money, and this itself might be the cause of unprofitability, but this cannot be called "self-sabotage", which would be the case if you knew exactly how to make money and prevented yourself from doing it.
Another situation is this: your anxiety and restlessness causes you to not be patient and wait long enough to pick the right trades. This could also be the or "a" cause of unprofitability, but, once again, it cannot be called "self-sabotage". We cannot call "self-sabotage" anything that you do, because of course trading boils down to just clicking your mouse at the right time, so, by this rationale, anything that you don't do right is self-sabotage.
Let's rule self-sabotage out once and for all. It is not something to worry about, as it is a very remote possibility. It is far more probable, if you lose money, that your trading methodology is unprofitable in the long run.
For example, I recently reached 38k from 4k in 7 months, and that would make me sound like a profitable trader. Then I proceeded to lose most of it. Self-sabotage? Not at all. The very way that I reached that 38k, by using martingale methods and craving for more money, is the same way I lost it. Martingale methods in the long run are not profitable.
Yes, I could have stopped at 38k, but I didn't realize how lucky I had been and how unreliable my method was. But there is no self-sabotage in all this.
Hopefully now I am done with thinking that if things go right, it's because the gods are with me, and if things go wrong, it's because the gods are against me or I am against myself. Once again, let's take ourselves out of the picture, and try to suppress our ego.
Just as in "lesson #2: the markets don't give a **** about you", I said that no one is plotting to make you fail or succeed, and the markets do not care at all about you, I now have to stress out (to myself, mainly) that, out of the many good explanations for a lack of profitability, you cannot count the "self-sabotage" explanation, whereby if you fail, it is because you really do not want to allow yourself to succeed.
You might have to deal with counter-intuitive situations in trading, that make you close a position when it's making money and make you keep it open when it's losing money, and this itself might be the cause of unprofitability, but this cannot be called "self-sabotage", which would be the case if you knew exactly how to make money and prevented yourself from doing it.
Another situation is this: your anxiety and restlessness causes you to not be patient and wait long enough to pick the right trades. This could also be the or "a" cause of unprofitability, but, once again, it cannot be called "self-sabotage". We cannot call "self-sabotage" anything that you do, because of course trading boils down to just clicking your mouse at the right time, so, by this rationale, anything that you don't do right is self-sabotage.
Let's rule self-sabotage out once and for all. It is not something to worry about, as it is a very remote possibility. It is far more probable, if you lose money, that your trading methodology is unprofitable in the long run.
For example, I recently reached 38k from 4k in 7 months, and that would make me sound like a profitable trader. Then I proceeded to lose most of it. Self-sabotage? Not at all. The very way that I reached that 38k, by using martingale methods and craving for more money, is the same way I lost it. Martingale methods in the long run are not profitable.
Yes, I could have stopped at 38k, but I didn't realize how lucky I had been and how unreliable my method was. But there is no self-sabotage in all this.
Hopefully now I am done with thinking that if things go right, it's because the gods are with me, and if things go wrong, it's because the gods are against me or I am against myself. Once again, let's take ourselves out of the picture, and try to suppress our ego.
Yamato
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So, I am back, but I will not be speaking about results, performance, because that will adversely affect my own trading.
Also, I will not engage in compulsive journal writing, such as when I came and wrote about every single thought I had, complaint about colleagues, neighbors and so on. Let's avoid compulsive behaviors and wastes of time.
I will come here not to speak of results but just about thoughts on what the methodology should be. Whether I'll follow it or not is another matter. In other words, I will not come back here to write "I made it" or "I lost all this money", or "I made this trade today". Nor will I come to discuss future trades. That is where I believe the journal hurts my trading.
I was thinking this just now: we should always ask ourselves in our daily life, whether trading or doing other things, if we're in control or not, and if we're acting in our best self-interest or instead if we are acting compulsively and harming ourselves. And by "we should always ask ourselves", I literally mean every 5 minutes or so. What are you doing now? Are you slouching? And five minutes from now: are you complaining right now? Are you eating unhealthy? Drinking? Scratching your head? All to be avoided. What are you allowed to do? Anything that doesn't cause harm to yourself (or others) in the long term. You can watch tv. You can learn something. You can watch people. You can sing, you can dance... and so on.
This is very important and the quest for profitable trading can turn your life into a healthier one in every aspect of it.
For example, bad and/or compulsive behaviors can include:
1) slouching
2) smoking
3) eating the wrong things
4) saying the wrong things
5) complaining (huge waste of time and with harmful effects)
6) and, very important but the hardest to control, wasting your time with the wrong thoughts
There is a range of harmful behaviors that go from the most controllable ones, such as not eating too much or the wrong things, to the least controllable ones, such as wasting time on some thoughts.
The average person even has trouble controlling what they eat. A trader might have to be better than the average person when it comes to self-control.
But I could be wrong about this. It might be like this, too: a trader has to be in control only when it comes to trading and can be debauched in every other aspect of his life. I don't know. Most likely I am right, but maybe I am being excessive.
Too bad I've decided that I can't talk about results and what I am doing in my daily life, but I feel that would require an excessive amount of writing and it would precisely make me engage in compulsive journal writing, which is one of the many compulsive behaviors I want to try and avoid from now on.
Writing 4 posts per day, on the weekend, is OK. Coming here, every day, to write what a slacker my roommate is, that is compulsive journal writing and it is a form of complaining, too, and therefore useless.
Also, I will not engage in compulsive journal writing, such as when I came and wrote about every single thought I had, complaint about colleagues, neighbors and so on. Let's avoid compulsive behaviors and wastes of time.
I will come here not to speak of results but just about thoughts on what the methodology should be. Whether I'll follow it or not is another matter. In other words, I will not come back here to write "I made it" or "I lost all this money", or "I made this trade today". Nor will I come to discuss future trades. That is where I believe the journal hurts my trading.
I was thinking this just now: we should always ask ourselves in our daily life, whether trading or doing other things, if we're in control or not, and if we're acting in our best self-interest or instead if we are acting compulsively and harming ourselves. And by "we should always ask ourselves", I literally mean every 5 minutes or so. What are you doing now? Are you slouching? And five minutes from now: are you complaining right now? Are you eating unhealthy? Drinking? Scratching your head? All to be avoided. What are you allowed to do? Anything that doesn't cause harm to yourself (or others) in the long term. You can watch tv. You can learn something. You can watch people. You can sing, you can dance... and so on.
This is very important and the quest for profitable trading can turn your life into a healthier one in every aspect of it.
For example, bad and/or compulsive behaviors can include:
1) slouching
2) smoking
3) eating the wrong things
4) saying the wrong things
5) complaining (huge waste of time and with harmful effects)
6) and, very important but the hardest to control, wasting your time with the wrong thoughts
There is a range of harmful behaviors that go from the most controllable ones, such as not eating too much or the wrong things, to the least controllable ones, such as wasting time on some thoughts.
The average person even has trouble controlling what they eat. A trader might have to be better than the average person when it comes to self-control.
But I could be wrong about this. It might be like this, too: a trader has to be in control only when it comes to trading and can be debauched in every other aspect of his life. I don't know. Most likely I am right, but maybe I am being excessive.
Too bad I've decided that I can't talk about results and what I am doing in my daily life, but I feel that would require an excessive amount of writing and it would precisely make me engage in compulsive journal writing, which is one of the many compulsive behaviors I want to try and avoid from now on.
Writing 4 posts per day, on the weekend, is OK. Coming here, every day, to write what a slacker my roommate is, that is compulsive journal writing and it is a form of complaining, too, and therefore useless.
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L
Liquid validity
FWIW, I agree with you and your new approach.
Do whatever works for you
Do whatever works for you
L
Liquid validity
Likewise, you've always given a very open and honest insight into what you do,
pretty rare with anyone doing this stuff.
I for one respect that
Adamus
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I also wish you good luck with this. The psychological theme you describe is pretty much the same as the information I have found in the various psychology books I have read.
I find it easy to grasp what it's all about psychologically, but I also find it very difficult to implement. "Dealing with emotions" for me turns out to be nothing like the macho stuff I thought it was. So often traders talk about having the balls to do something or the guts to do something else, and I always thought that meant being tough, macho and hard. It turns out though - for me - that it's not. It's more about sitting through torture sessions without giving in. Doing what is correct is often totally the opposite of doing what is comfortable. So in other words it is uncomfortable. Sometimes very very uncomfortable.
I am finding that this is beginning to help my results, but it also makes me begin to question whether I want to do this in the long term.
Then I think about the alternatives to doing this, and I realise it's worth it - especially since it is meant to get easier - apparently.
I find it easy to grasp what it's all about psychologically, but I also find it very difficult to implement. "Dealing with emotions" for me turns out to be nothing like the macho stuff I thought it was. So often traders talk about having the balls to do something or the guts to do something else, and I always thought that meant being tough, macho and hard. It turns out though - for me - that it's not. It's more about sitting through torture sessions without giving in. Doing what is correct is often totally the opposite of doing what is comfortable. So in other words it is uncomfortable. Sometimes very very uncomfortable.
I am finding that this is beginning to help my results, but it also makes me begin to question whether I want to do this in the long term.
Then I think about the alternatives to doing this, and I realise it's worth it - especially since it is meant to get easier - apparently.
Yamato
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Right, good points and thanks for the feedback.
In my opinion, from what I've understood so far about myself and my relationship to the markets... in my opinion what we have to assess now is this: do we have to change our self-control throughout our daily lives or just when we trade?
I am inclined, very inclined, right now, to think that we also have to change our lives, at least as far as I am concerned.
This is also good news, because, if I can have as much self-control in my life as I need in trading, then I will be solving a lot of problems in my daily life. Up to now I haven't had enough of it in both fields.
As I said, I wouldn't be describing either my trading or my daily life's changes, because it hurts my progress to have to describe my progress every step of the way. But let's quickly mention that I have discovered that I am able to postpone gratification for longer than I thought. Especially if we're talking about "harmful gratification", such as eating the wrong things, saying the wrong things... doing something that hurts you, even if it just meant drinking a glass of beer.
Just a quick example: you go to work, work all day long without a break (six hours in my case) and that is already quite an achievement if you think about it. Then you'd expect that once I get out... judging from the past... you'd expect that i'd go get drunk, buy a pastry, or flip out in another way. Well, that is not the case and if you apply yourself to it, you find out that you can act in your best self-interest for as long as one day. At least that's my record so far. I am talking about total self-control. Go to sleep early, wake up on time, go to work, work all day, don't do anything stupid such as smoking, eating sweets or drinking a beer, then come home and still feel like you've got some will power left.
As I said, I must not dwell too long in describing my progress and glorifying myself, because that's when things go wrong because I stop paying attention and listening to myself. It would be as if I had to write down what I am doing in the middle of playing a video game.
I will probably come back and write at length and extensively about how to do it, but only once all these things, including profitability, have been achieved for a few months.
In my opinion, from what I've understood so far about myself and my relationship to the markets... in my opinion what we have to assess now is this: do we have to change our self-control throughout our daily lives or just when we trade?
I am inclined, very inclined, right now, to think that we also have to change our lives, at least as far as I am concerned.
This is also good news, because, if I can have as much self-control in my life as I need in trading, then I will be solving a lot of problems in my daily life. Up to now I haven't had enough of it in both fields.
As I said, I wouldn't be describing either my trading or my daily life's changes, because it hurts my progress to have to describe my progress every step of the way. But let's quickly mention that I have discovered that I am able to postpone gratification for longer than I thought. Especially if we're talking about "harmful gratification", such as eating the wrong things, saying the wrong things... doing something that hurts you, even if it just meant drinking a glass of beer.
Just a quick example: you go to work, work all day long without a break (six hours in my case) and that is already quite an achievement if you think about it. Then you'd expect that once I get out... judging from the past... you'd expect that i'd go get drunk, buy a pastry, or flip out in another way. Well, that is not the case and if you apply yourself to it, you find out that you can act in your best self-interest for as long as one day. At least that's my record so far. I am talking about total self-control. Go to sleep early, wake up on time, go to work, work all day, don't do anything stupid such as smoking, eating sweets or drinking a beer, then come home and still feel like you've got some will power left.
As I said, I must not dwell too long in describing my progress and glorifying myself, because that's when things go wrong because I stop paying attention and listening to myself. It would be as if I had to write down what I am doing in the middle of playing a video game.
I will probably come back and write at length and extensively about how to do it, but only once all these things, including profitability, have been achieved for a few months.
Yamato
Legendary member
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One more insight. The craving for any unnecessary temptation is very close to the craving for necessary things like food.
I don't know what else to make of it for now, but I am noticing that in the same way I can repress my craving for scratching my head, looking at the markets, smoking a cigarette, and another similar compulsive but unnecessary behaviors, I can also repress the craving for food, when I am starving.
But to different degrees and there are other differences.
You see, if you haven't eaten for 24 hours, like me right now for example, your craving for food is slightly stronger than your craving for the markets, but only because i've gotten used to it by now (I've only looked at them once a day in the past few days), and it would equate it otherwise, but there would still be differences.
1) my craving for food keeps me alive
2) if I postpone eating, my craving for food will increase
Looking at the markets if you shouldn't trade is not necessary, but harmful. If you repress it, you get used to not doing it even more. Food is different.
Probably the way to go is to train your self-control in repressing unnecessary cravings. But I can tell you that the way it feels, repressing necessary vs unnecessary, at the moment you do is virtually the same. In other words, if you have a compulsive activity you're used to, it feels as necessary as eating when you're starving.
I don't know what else to make of it for now, but I am noticing that in the same way I can repress my craving for scratching my head, looking at the markets, smoking a cigarette, and another similar compulsive but unnecessary behaviors, I can also repress the craving for food, when I am starving.
But to different degrees and there are other differences.
You see, if you haven't eaten for 24 hours, like me right now for example, your craving for food is slightly stronger than your craving for the markets, but only because i've gotten used to it by now (I've only looked at them once a day in the past few days), and it would equate it otherwise, but there would still be differences.
1) my craving for food keeps me alive
2) if I postpone eating, my craving for food will increase
Looking at the markets if you shouldn't trade is not necessary, but harmful. If you repress it, you get used to not doing it even more. Food is different.
Probably the way to go is to train your self-control in repressing unnecessary cravings. But I can tell you that the way it feels, repressing necessary vs unnecessary, at the moment you do is virtually the same. In other words, if you have a compulsive activity you're used to, it feels as necessary as eating when you're starving.
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Yamato
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compulsivity and self-control
compulsivity - definition of compulsivity by the Free Online Dictionary, Thesaurus and Encyclopedia.
I have realized that when you're a compulsive person, like I am, on the edge of an obsessive-compulsive disorder, you have curb your compulsive behaviors through will power and self-control, in order to maximize the return you get from yourself.
Compulsive behaviors can be of two types: good and bad, and producing good outcomes and bad outcomes for you.
Examples of bad:
Compulsive scratching of your head: bad, at the very least it is a waste of time. I no longer do it.
Compulsive nail-biting. Same. No longer do it.
Compulsive gambling/trading. Very tricky, because it is bad, but it is under the disguise of an effort of making money. Instead you lose it. When you trade with the drive to trade, with the desire to look at the markets, that's when you lose.
Examples of good:
Working. I can work all day long, with great passion and speed, and efficacy, because i get into the subject, at keep at it for hours, the entire day. Few other colleagues can do it. Unfortunately this type of thing cannot be applied to trading, because you cannot exactly predict the outcome of your efforts like in other fields, where you pretty much know that the more you get into it, the better you do. In trading it is different, due to the unpredictability of the markets.
So basically, there are many other examples, pretty much every minute of my day is an example, because when you are compulsive, you virtually apply it to everything. It also comes in the form of passion, and perfectionism, and it ranges from brushing your teeth, to choosing the quickest route, to... doing everything in the best way that it can be done, with the biggest effort.
Well, it has to be curbed in the fields where it produces damage. In all other cases, it can be allowed to run free, as an engine, and as a source of positive results.
For me, being compulsive as I said, I cannot let myself look at charts as I wish, because I know where this will lead. I can let my fingers type as fast as they do, I can type all I want. This is only good. But if I let myself free with the markets, disaster ensues. Others, non-compulsive people. know exactly the right balance of monitoring and not monitoring. They're good at finding a balance. Me, instead, I have this engine in my mind, and in my heart, that never stops running, always looking for new tasks to embark on, and spend all its energy.
compulsivity - definition of compulsivity by the Free Online Dictionary, Thesaurus and Encyclopedia.
I have realized that when you're a compulsive person, like I am, on the edge of an obsessive-compulsive disorder, you have curb your compulsive behaviors through will power and self-control, in order to maximize the return you get from yourself.
Compulsive behaviors can be of two types: good and bad, and producing good outcomes and bad outcomes for you.
Examples of bad:
Compulsive scratching of your head: bad, at the very least it is a waste of time. I no longer do it.
Compulsive nail-biting. Same. No longer do it.
Compulsive gambling/trading. Very tricky, because it is bad, but it is under the disguise of an effort of making money. Instead you lose it. When you trade with the drive to trade, with the desire to look at the markets, that's when you lose.
Examples of good:
Working. I can work all day long, with great passion and speed, and efficacy, because i get into the subject, at keep at it for hours, the entire day. Few other colleagues can do it. Unfortunately this type of thing cannot be applied to trading, because you cannot exactly predict the outcome of your efforts like in other fields, where you pretty much know that the more you get into it, the better you do. In trading it is different, due to the unpredictability of the markets.
So basically, there are many other examples, pretty much every minute of my day is an example, because when you are compulsive, you virtually apply it to everything. It also comes in the form of passion, and perfectionism, and it ranges from brushing your teeth, to choosing the quickest route, to... doing everything in the best way that it can be done, with the biggest effort.
Well, it has to be curbed in the fields where it produces damage. In all other cases, it can be allowed to run free, as an engine, and as a source of positive results.
For me, being compulsive as I said, I cannot let myself look at charts as I wish, because I know where this will lead. I can let my fingers type as fast as they do, I can type all I want. This is only good. But if I let myself free with the markets, disaster ensues. Others, non-compulsive people. know exactly the right balance of monitoring and not monitoring. They're good at finding a balance. Me, instead, I have this engine in my mind, and in my heart, that never stops running, always looking for new tasks to embark on, and spend all its energy.
Yamato
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practicing with the chart game
I am practicing on the chart game:
Chartgame.com - The time-lapse stock trading game
1. pick a stoploss and stick to it: this the first lesson, practice for days and days until it sinks in
2. learn when not to trade
3. learn the right size of your stoploss
4. learn when it's the right time to get out
For now, I am just focusing on #1. It's not easy, once you get into it. You get into a trade, and hope for the best, and once that hope gets into you, it gets harder to get out of a trade, although it is a paper trade, on past prices, of unknown stocks. Once again, this is related to self-control - how to control your actions based on what you know to be best for you, rather than your immediate impulses and emotions.
It sure is a pleasure to see it work, to see that through self-control you can predict the future well enough to be profitable, on paper:
Then of course the markets in real time, with real money, have a few extra elements to deal with: lower speed and more emotions. You can't press a button and make one day go by. You have to wait 24 hours, and, having invested real money, those 24 hours will be crowded with emotions, doubts and urges.
...
In fact, I think that with the experience I have, having seen so many charts, all I'd need to do to be profitable, on this chart game, is to each time pick a stoploss and stick to it, and, for the rest, listen to the markets. Just listen to the markets, place a stoploss and make your bet. That's all, at least as far as this chart game. But often I cannot do it, because a loss makes you lose that confidence, and once you lose it, you are not as good at picking trades, picking stoplosses and sticking to them. A loss breaks your concentration. But if I keep at it, I might get better at staying focused in the face of adversity.
I am practicing on the chart game:
Chartgame.com - The time-lapse stock trading game
1. pick a stoploss and stick to it: this the first lesson, practice for days and days until it sinks in
2. learn when not to trade
3. learn the right size of your stoploss
4. learn when it's the right time to get out
For now, I am just focusing on #1. It's not easy, once you get into it. You get into a trade, and hope for the best, and once that hope gets into you, it gets harder to get out of a trade, although it is a paper trade, on past prices, of unknown stocks. Once again, this is related to self-control - how to control your actions based on what you know to be best for you, rather than your immediate impulses and emotions.
It sure is a pleasure to see it work, to see that through self-control you can predict the future well enough to be profitable, on paper:
Then of course the markets in real time, with real money, have a few extra elements to deal with: lower speed and more emotions. You can't press a button and make one day go by. You have to wait 24 hours, and, having invested real money, those 24 hours will be crowded with emotions, doubts and urges.
...
In fact, I think that with the experience I have, having seen so many charts, all I'd need to do to be profitable, on this chart game, is to each time pick a stoploss and stick to it, and, for the rest, listen to the markets. Just listen to the markets, place a stoploss and make your bet. That's all, at least as far as this chart game. But often I cannot do it, because a loss makes you lose that confidence, and once you lose it, you are not as good at picking trades, picking stoplosses and sticking to them. A loss breaks your concentration. But if I keep at it, I might get better at staying focused in the face of adversity.
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