We all know physiology is one of the biggest factors in trading
Share here e-books,video,website etc that has helped you and will hopefully help others in the future.
Ideally illustration and stories like this :
From the great Van Tharp http://www.vantharp.com/about-van-tharp.asp
Worry and Perception All the information obtained through the senses about the world "out there" comes from a set of complex mental operations called perception.
These mental processes interpret and attach meaning to the information the senses detect. For example, one might see a set of black markings on a white piece of paper and “perceive” it as a bar chart with a "head-and-shoulders bottom" or some sort of "resistance" or, to a non-technician, just meaningless lines. Perception is a filtering process, which selects information for conscious, processing. It selects information from the billion of bits impinging on our sensory apparatus, so we can cope with the world. The selection process is not random, but an active process that selects information according to one's expectations. What one sees out there depends on what one expects to see. The investor who expects to see a bull market in stocks will tend to perceive information that supports his expectations. He will "see" bullish technical patterns in his charts and ignore any evidence that might contradict the possibility of a bull market. Worry is a form of perception based on negative expectation. People who worry anticipate negative consequences. Most stressful events are stressful because of the way they are perceived. The event is just an event. It is a person's interpretation of the event that makes it stressful. Winners, for example, have learned how to make it "O.K. to lose." Losers, in contrast, become extremely anxious over losses and, as a result, have difficulty "letting go" of them.
A large loss, or even the potential for a large loss, may devastate the worrier. The person who dwells on the more positive aspects of the situation will view the same event as a lesson or even an opportunity. Suppose for example, the price of soybeans drops 20 cents per bushel. Let's look in detail at the reactions of five commodity investors to this same event.
An old man with a smile on his face had been stopped out of soybeans early in the day. He had a $3,000 loss at the time he was stopped out, but the closing price of the day would have amounted to a much larger loss. He felt good about himself for sticking to his trading plan, so he responded to the news by smiling and telling himself, "Great! You stuck to your system."
*A soybean farmer had sold his crop two months earlier at a much higher price because he was convinced that certain big companies were manipulating the markets down. The 20-cent price drop was, for him, further proof of manipulation. "Damn them," he said to himself as he frowned. He remained in a bad mood the rest of the day.
* An active trader was convinced soybeans were due for a major rally. He had predicted the drop during the day and had used the opportunity to acquire a substantial long position in soybeans. He had a small loss on the day, but he felt a sense of satisfaction because his plan was working well. The only thing he said to himself was, "I'm right."
* A company president phoned his broker in a panic even though he was short in soybeans. He now had a $3,000 profit and he was concerned the market might go against him. His broker had convinced him to enter into the position and now he was afraid that he might lose his profit. "I'll lose again! " he thought as he called his broker to learn if he was still bearish.
*A financial columnist was long in soybeans. He had absorbed the loss because he did not enter a stop with his order. His predominant thought was that he did not stand a chance. If he entered a stop, he was sure it would be picked off by the traders on the floor. If he sold out at a large loss, it would probably be at the low price of the day. If he held onto his position, the market probably would continue to go against him. "Why me?" he thought.
Notice how the same event is a totally different experience for each of these traders. Three traders actually lost money in the market, yet two of them had positive experiences. Two traders made profits, yet both of them were unhappy. Of course, most people are not happy about losses or sad about profits. These examples merely illustrate that profits and losses have nothing to do with experience. People create their own experience by the way they think. Each person experiences life differently because each person's thinking is unique.
PLEASE SHARE STUFF LIKE THIS.LETS NOT BICKER OUT 1% THIS 20% THAT
Share here e-books,video,website etc that has helped you and will hopefully help others in the future.
Ideally illustration and stories like this :
From the great Van Tharp http://www.vantharp.com/about-van-tharp.asp
Worry and Perception All the information obtained through the senses about the world "out there" comes from a set of complex mental operations called perception.
These mental processes interpret and attach meaning to the information the senses detect. For example, one might see a set of black markings on a white piece of paper and “perceive” it as a bar chart with a "head-and-shoulders bottom" or some sort of "resistance" or, to a non-technician, just meaningless lines. Perception is a filtering process, which selects information for conscious, processing. It selects information from the billion of bits impinging on our sensory apparatus, so we can cope with the world. The selection process is not random, but an active process that selects information according to one's expectations. What one sees out there depends on what one expects to see. The investor who expects to see a bull market in stocks will tend to perceive information that supports his expectations. He will "see" bullish technical patterns in his charts and ignore any evidence that might contradict the possibility of a bull market. Worry is a form of perception based on negative expectation. People who worry anticipate negative consequences. Most stressful events are stressful because of the way they are perceived. The event is just an event. It is a person's interpretation of the event that makes it stressful. Winners, for example, have learned how to make it "O.K. to lose." Losers, in contrast, become extremely anxious over losses and, as a result, have difficulty "letting go" of them.
A large loss, or even the potential for a large loss, may devastate the worrier. The person who dwells on the more positive aspects of the situation will view the same event as a lesson or even an opportunity. Suppose for example, the price of soybeans drops 20 cents per bushel. Let's look in detail at the reactions of five commodity investors to this same event.
An old man with a smile on his face had been stopped out of soybeans early in the day. He had a $3,000 loss at the time he was stopped out, but the closing price of the day would have amounted to a much larger loss. He felt good about himself for sticking to his trading plan, so he responded to the news by smiling and telling himself, "Great! You stuck to your system."
*A soybean farmer had sold his crop two months earlier at a much higher price because he was convinced that certain big companies were manipulating the markets down. The 20-cent price drop was, for him, further proof of manipulation. "Damn them," he said to himself as he frowned. He remained in a bad mood the rest of the day.
* An active trader was convinced soybeans were due for a major rally. He had predicted the drop during the day and had used the opportunity to acquire a substantial long position in soybeans. He had a small loss on the day, but he felt a sense of satisfaction because his plan was working well. The only thing he said to himself was, "I'm right."
* A company president phoned his broker in a panic even though he was short in soybeans. He now had a $3,000 profit and he was concerned the market might go against him. His broker had convinced him to enter into the position and now he was afraid that he might lose his profit. "I'll lose again! " he thought as he called his broker to learn if he was still bearish.
*A financial columnist was long in soybeans. He had absorbed the loss because he did not enter a stop with his order. His predominant thought was that he did not stand a chance. If he entered a stop, he was sure it would be picked off by the traders on the floor. If he sold out at a large loss, it would probably be at the low price of the day. If he held onto his position, the market probably would continue to go against him. "Why me?" he thought.
Notice how the same event is a totally different experience for each of these traders. Three traders actually lost money in the market, yet two of them had positive experiences. Two traders made profits, yet both of them were unhappy. Of course, most people are not happy about losses or sad about profits. These examples merely illustrate that profits and losses have nothing to do with experience. People create their own experience by the way they think. Each person experiences life differently because each person's thinking is unique.
PLEASE SHARE STUFF LIKE THIS.LETS NOT BICKER OUT 1% THIS 20% THAT
We miss 100% of the shots we don't take
