psycology in trading!

[montmorencyt2w]

damn poxy rep system. spot on Joey!

What would Gekko say?! (note spelling!) Always lead me back to this.........

YouTube - Chopper Reed - Harden the **** up

LOL! someone with an obviously soft beer belly telling people to harden the f|ck up :cheesy:

 

[Citizen2007]

This has always been a subject of major discussion amongst traders, whether or not to approach a psychologist to help them perform better. In my opinion a psychologist will be of little help in the long term .

Reading the charts is all about Technical Analysis , if there are gaps in your understanding then when a situation in the market arises that is not known to you, you will react emotionally . The strength of this emotion will decide what action you will take. some may exit on a little dip, only to find that the market has rallied in their original direction, this creates further emotional turmoil, they will then re-enter in an attempt to retrieve some of the snatched away profits. Of course by this time the market dynamics have changed and it may really be ready for a fall. This will confuse the trader even further. It is this constant play that creates most of the psychological issues involved in trading.

Imagine the other scenario . You understand that the market is in an uptrend but it can only go so far and have an exit plan/signal . Already you have reduced your expectations and psychological burden. As the market rises and reacts in a way that you had anticipated, your signal appears and you exit with a small profit.

No psychologist will be able to program your mind to think this way about the market. This is screentime, experience or a complete understanding of the technicals/price movement.

It is probably better to speak with someone in business consultant who understands planning and risk assessment more so than a psychologist.

The fear will only be conquered when the unknown becomes the known . Greed will only be controlled when our expectations are real. Hope will turn to confidence only when we have complete knowledge.

 

[everyonerich]

The problem is that how do you know you're not feeling any emotions? I know plenty of people who do not recognise that they are governed by their emotions or that they even feel any emotion. This doesn't bode well; it means they can't look at themselves from the outside and thus just act on their emotions without thinking. Maybe you're fine. Only you can truly know. Or maybe you won't. Or will you.

thanks for your comment.

 

[everyonerich]

If psychology is a problem for you in trading, your gambling. Trading is 1% psychology, tops.

you remind me what i said few months ago. http://www.trade2win.com/boards/gen...l-trading-profit-tips-work-46.html#post579406

 

[new_trader]

The fear will only be conquered when the unknown becomes the known . Greed will only be controlled when our expectations are real. Hope will turn to confidence only when we have complete knowledge.

Trading is both an evolutionary and revolutionary process. You are right, fear is conquered when the unknown becomes the known but will return when the market delivers an outcome opposite to what is expected and or previously experienced. This is when you will realise that your knowledge is incomplete and there is still a lot of work to do. Newbies will usually give up at this point and start looking for a new system or methodology or indicator when instead they should persevere, trading with tight stops to keep the mistakes as cheap as possible so that they can afford to complete the trading education..

 

[Black Swan]

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....]

That's some way for your Granny to go out; gets mugged, has a quickie with Brenda, snuffs it, respect.

 

[montmorencyt2w]

That's some way for your Granny to go out; gets mugged, has a quickie with Brenda, snuffs it, respect.

*chuckle*

Seriously though, I think that anyone who doesn't think that they are prey to emotions, whether in trading or any other aspect of life, is kidding themselves.

It's probably better to be aware of them, and then try to work around them (I hesitate to say "master them" because I'm not at all sure that we can).

Worst case is perhaps if you know you are an emotional wreck one day (or one week, one year), lock away your computer(s) and go and throw frisbee, go for a walk, or perhaps go and do some random acts of kindness to some folk. (Go and do some shopping for Brenda's Grannie for example ... you might even get lucky ).

 

[forker]

i see trading much the same as going to a casino with the only difference being an edge weighted slightly in my favour. if you throw a coin in a slot machine you dont know what to expect, you might win or lose but you do know that the machine ultimately has the edge over time. thinking in this fashion really helps me get by. if i were to look at each trade on its own i would without a shaddow of doubt place an emotional attatchment. This trade will win, this trade my system is telling me what is going to happen.. this kind of thinking leads to only one destination for me which could be termed as a monumental f***up.

like a casino has an edge over time so must i see my trading in the same light. i know that over time i can have a 60-65 percent win rate which means mentally i should be very comfortable taking every trade much like i play a slot machine in a casino. i know one of 2 things will happen.. none of the big guns are going to play ball and ill get hammered, or they will and the trade turns out to be a winner. what i know for sure is that i dont know when that will happen. when you play poker you place an initial bet before you get your cards but you have absolutely no idea if your hand will be good or not. For me the only difference is that i see the cards before i place a bet. this doesnt mean that the other players are holding a good hand. so ultimately i still have no idea if the big guns are going to play ball or not.

one of the best things i ever could have done for myself was move away from looking at my system as my personal yoda informing me what the market is gong to do next. i might have exactly the same setup as i did last week but that doesnt mean ill hit a home run. we all depend on other people (the big guns) to make money. all my system can do is outline a situation where "A" is more likely to happen than "B" and it is nothing more than that. if i looked at each trade or each day where i want to make "X"% or "Y"pips is no different than me looking at each trade as if it will be a winner. like a casino i cannot guarantee success because i am dependent on others to make money and i dont know when they will step in to play ball.

for this reason i only started to make some chum once i removed all the bull5h!t of looking at each trade and over analysing losers. i learned there is such a thing as normal losers and there is no point trying to analyse them to learn something when it means nothing at all. for now at least i look at trading as my own casino and over a period of a month i know i can have a 60-65% win rate. i dont give a 5h!t if this trade dont work or the next or even the following 5 trades. i know that over time i end up making chum. so going onto the topic of psychology i think its a matter of how you see the market and yourself aligned to the market. its got nothing to do with this loser or this setup because at the end of the day you are just relying on others to see what you see and take action and that in itself is something that is naturally unemotional to me.. well my 2 cents atleast chaps...

 

[Chartergas]

you odnt need a psychologist you just need to know the pyschology of groups of people/markets

 

[ymanly]

I place no value on knowing what others are likely to do. Only what I am going to do when my signal appears. I studied for too many years the emini markets. intraday is a beautiful thing when you learn it only runs or rests. Technical Analysis is the reality of what price is doing ...and has done so recently that it tells you very high % what is coming next . Knowing how to read the few candles of immense value is next. A hammer, for instance, is not a good indicator unless it is a "unique" hammer..what makes it unique? It's location in channel...not top or bottom because u do not know when top or bottom is truly there. Location, Location , location.......shooting stars, dojis, shaven heads, etc.

 

[ymanly]

i do understand......hammers are bottom only patterns...just general rhetoric