My view is that it all depends on how well you understand why what you are doing should work.
If you understand why your strategy works, be it purely mechanical or wholly discretionary, you should be able to tell yourself how to excecute your edge in the market. Once you have covered all the bases in building your strategy (ot collection of strategies), you already know how to execute your edge - it is just a case of doing it, whether your Gran died / just been mugged on the tube / had a quicky with Brenda from accounts.
Of course, emotions and psychology are important parts of trading - important parts that you just need to trade through. Anyone who says they don't ever get emotional isn't human, just as anyone who says psychology doesn't affect performance is either harded wired already or has never really performed at the edge of their envelope.
One of the things I have written down somewhere is that my profits come from the weak links in the chain - other people [who don't execute]. As soon as I let emotions or psychology play a role in my decision making, I become one of them.
[The irony is that all of this is psychological....]
If you understand why your strategy works, be it purely mechanical or wholly discretionary, you should be able to tell yourself how to excecute your edge in the market. Once you have covered all the bases in building your strategy (ot collection of strategies), you already know how to execute your edge - it is just a case of doing it, whether your Gran died / just been mugged on the tube / had a quicky with Brenda from accounts.
Of course, emotions and psychology are important parts of trading - important parts that you just need to trade through. Anyone who says they don't ever get emotional isn't human, just as anyone who says psychology doesn't affect performance is either harded wired already or has never really performed at the edge of their envelope.
One of the things I have written down somewhere is that my profits come from the weak links in the chain - other people [who don't execute]. As soon as I let emotions or psychology play a role in my decision making, I become one of them.
[The irony is that all of this is psychological....]
wasp
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........as you say, its something you work through and take advantage of where others let it affect them. There is a difference between personal psychology issues and utilising others though.
End of the day though, business is business and once you stop being a gambler or a big fking pansy, you treat your trading like any other business. Cold, clinical, ruthless money churner.
As for Brenda, she was crap... One less distraction!
End of the day though, business is business and once you stop being a gambler or a big fking pansy, you treat your trading like any other business. Cold, clinical, ruthless money churner.
As for Brenda, she was crap... One less distraction!
Agreed - but this is a paradigm shift away from the psychology of Joe Bloggs. Most people cannot succeed in a trading role until they have adjusted their perspective and learnt to view old problems in new ways.
A simple example is that of target setting and circuit breakers.
wasp
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Joe Bloggs runs a pub : Each day, his useless bartenders waste 5 pints through spillage, but sell 100.
Jo Bloggios trades : Each day he loses 5 ticks but makes a 100 overall.
Whats the difference? Business is business.
In your example, nothing.
But not everyone see's it so clearly - it's the old NY taxi driver scenario. Trading is a numbers game, and most people are sh!t at thinking in numbers.
Numbers don't remember, people do.
http://www.economist.com/finance/displaystory.cfm?story_id=13447720
^^ in the last issue of the economist.
But not everyone see's it so clearly - it's the old NY taxi driver scenario. Trading is a numbers game, and most people are sh!t at thinking in numbers.
Numbers don't remember, people do.
http://www.economist.com/finance/displaystory.cfm?story_id=13447720
^^ in the last issue of the economist.
wasp
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damn poxy rep system. spot on Joey!
What would Gekko say?! (note spelling!) Always lead me back to this.........
YouTube - Chopper Reed - Harden the fuck up
What would Gekko say?! (note spelling!) Always lead me back to this.........
YouTube - Chopper Reed - Harden the fuck up
The thing I would strongly advise against is this 10p a point lark.
Demo for ages if necessary, but then do enough size so that you nearly can't sleep.
It must be psychologically difficult to make the transition from something meaningless to something that matters.
Demo for ages if necessary, but then do enough size so that you nearly can't sleep.
It must be psychologically difficult to make the transition from something meaningless to something that matters.
wasp
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Surely this should work both ways though unless one is such a pessimist that they only remember the bad. newbies need to spend more time with excel and less time worrying about their weak minds and would see how psychology is irrelevant.
wasp
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Agree but should also remember, whether 10p or 10k per point, as long as its all relative to %, then its just business.... same old, day in and day out... its just a job... do your excel pre in advance, stick to correct % per your risk structure then try and try and try for days on end to get banned from a trading forum... Now THATS hard work!
I always wake up and they've deleted everything
Take this t2w hedge fund thing for example...
wasp
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I always wake up and they've deleted everything
Take this t2w hedge fund thing for example...
Its terrible ay, no one can keep up with just whats going on... such a shame!
I try to "de-monetise" my PnL, for example by considering it in ticks per lot and units of risk. I try to perform the best I can according to my performance measures, and let the $'s take care of themselves.
Precisely - it doesnt work both ways.
Good trades are left out of fear, and winning streaks are all given back from exuberance.
Fear and exuberence are put in place from the recent history - something that the market cares not one jot about. It doesnt matter.
People are irrational.
wasp
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People are mostly fcking stupid.
Yes, I think that's a good idea - writing results in units rather than £s.
I've found not using a price ladder immensely helpful as well. What used to look like a blue-arsed fly looks almost stationary now.
I use it for actually putting the trades on, and for managing stops etc. I like to have the option of Limit and market orders, and combining them - in terms of actual execution, I don;t think there is a better way.
You are right though that it gets kinda stupid. A feature I Like is to combine levels - say for the ES, one full point per level. Or set it up so it resets every couple of seconds or so - that way it looks like your trade is going nowhere.
[Bear in mind... some of these front ends are designed to increase activity].
