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Psychology is nothing

  • #141
  • Edited 7:21am Nov 13, 2007 6:18am | Edited 7:21am
Quoting kiwi_trader
Interestingly enough I wasn't referring to you. Why do you think its all about you?

I would note in passing that the definition of psychology is "the science of mind and behaviour" and its surprising how often in this thread people think they are supporting the "Psychology is nothing" camp by describing elements of psychology.
The title of the thread was over the top, I admit that. I've said that psychology comes into play until you learn technique, then it is a non-issue. And that varies, I'm sure. I want to trade right now, but I have a nice profit for the day, and it's usually best if I stop there. If I see a trade I absolutely have to be in, A+++, I'll break my rule.

All we're saying is that no amount of psychology will make you a trader. You have to learn to trade.

Obviously, psychology plays a role in learning, trading, day to day life, etc. by definition.

The best illustration I think I've come up with yet is the one from earlier today:

I didn't know what to do. There was stress. I lost money, therefore I did it wrong -- made a mistake.

All wrong.

First wrong conclusion - lost money = doing it wrong.
Knowledge: You can do it right and still lose money on that trade. Over time, you do it right, you make money.

Second wrong conclusion - stress = losing. Stress caused mistake.
Right conclusion: Stress was present, it was a result, not a cause.

Correct conclusion from above scenario - stress resulted from lack of data.
  • #142
  • Edited 6:39am Nov 13, 2007 6:18am | Edited 6:39am
Its amazing Blueruby how many people cannot see the 'wood for the trees' or should I say psychological trees lol.

Nice to see that one or two people do get it.

With reference a recent post, trading is just like real life any business can have frequent loosing days, weeks or even years so long as overall they are profitable they stay in business. Of course many have more losing days then winning ones and cease 'trading'. Trading being the operative word here.

Plumber, Builder, Engineer, Currency Trader, Baker, Doctor, Lawyer, whatever the vocation he or she has to gain the Knowledge along with a certain discipline and hard work in order to be successful.

I guess psychology does come into it in so far as you have to believe you can do it and then coupled with the above you have a good chance of success.

I think it was Henry Ford who said:

"whether you think you can or you think you can't either way your right"

And Thomas Edison:

"Genius? Nothing! Sticking to it is the genius! I've failed my way to success."

Two of my favorite quotes.
  • #143
  • Nov 13, 2007 6:27am Nov 13, 2007 6:27am
Quoting Porkpie
Unfortuntaley, we are brought up in the modern world to succede. To be good at everything we do, to be the best, not to loose. Trading is a completely different ball game because in order to succede we have to learn how to lose which goes against everything that has been taught to us before, to be the best and not to lose. Add money into the equation and you have your classic case of fear and greed. Unless we are taught to trade from a very young age, i.e how to lose well to be profitable, we have to learn how to manage our emotions in order to succede in trading. Past experiences and conditioning moulds the mind and knowing how to deal with these emotions when trading is knowing how to deal with the market. If 95% of traders fail, what sort of market activity do you think defines market behaviour? Its a market of fear and greed and only those that manage their emotions can succede and mechanically following a system may be one way of doing it, like filling up a car. But since most of us are taught from a very young age not to lose, your 'article' is not very helpful at all.
I like the way you think!

KISS

Is there separation of mind and body?

Knowing is just another aspect of psychology and philosophy. Do we as physical beings REALLY know anything? It's all perception, our individual acceptance of what constitutes reality.
  • #144
  • Nov 13, 2007 6:31am Nov 13, 2007 6:31am
Quoting Porkpie
...we have to learn how to lose
Porkpie, sorry, your post is full of all that nonsense that you read in trading psychology books. It seems to me that you learned it very well. Do you find it useful? Do you profit from it?

Just starting from "..we are brought up in the modern world to succede... we have to learn how to lose...".
I won't get on all the rest, it would be too long, but do you really thing that we are not used to lose? Do you really thing that we have to learn how to lose?

Please, use your brain, for a moment just forget what those books told you, just use your own brain and answer this very simple question: "Do you really thing we live in a world where the vast majority of people is not used to lose because the world teaches them to succeed?"

We always say that 95% of new traders lose all of their capital in few time. We forget to mention that 98% of all the people of the world lives in poverty (even in civilized countries), have very low ambitions, are used to succumb to bosses at work, to partners at home, to derision in the streets.

98% OF ALL THE PEOPLE OF THE WORLD IS ALREADY VERY GOOD AT LOSING!
EXTREMELY GOOD AT IT!
This is the truth, not the contrary.

That's why when they go trading they lose all. They are used to lose, all their life has been a continuous uninterrupted loss and just that will remain in the future, as they go on perfecting on how to lose.

Remember, when one says:

War is Peace
Freedom is Slavery
Ignorance is Strength
Winning is Losing

Well, when I read these things I think it's way better for me if I start to doubt and to think with my own brain.
You can believe whatever you want, but I think that in order to WIN I have to learn HOW TO WIN, not HOW TO LOSE!

Please, go, do a favor to yourself, throw away those books, go reading this:

Think and Grow Rich by Napoleon Hill
This is not marketing, you can find with google free pdf of it.

This is an old book and it also contains inaccuracies, but surely it's way better than any trading psychology books.
.Ubeee.
  • #145
  • Nov 13, 2007 6:41am Nov 13, 2007 6:41am
Ach you know what, I'm gonna simply refer to my "discussing is pointless, learning comes from trading" post and quit this nonsense.

Most discussions aren't discussions but pitting beliefs against one another.

A Mac user won't convert a PC user and vice versa until one of them secretly has actually tried to USE the other guy's machine for a while.
Trust price. Know yourself.
  • #146
  • Nov 13, 2007 6:47am Nov 13, 2007 6:47am
Quoting ubeee
War is Peace
Freedom is Slavery
Ignorance is Strength
Winning is Losing
When I see these things Ubeee the book ends up in the trash can or if it is not mine to his owner immediately without any further delay.
The world is full of losers.
But I think that our friend might have meant something different.
The process of trial and error is something that we learn to avoid in school while always seeking the "correct" answer.
We avoid getting involved with the pitfalls of research.The unavoidable errors that will occur when experimenting.Let's don't forget that even great mathematician's did sometimes mistakes.

Don't misunderstand me ,I agree with you that the vast majority of people cannot do anything correct but will only act randomly and without thinking.
The GrandMaster of the Forex Market.
  • #147
  • Nov 13, 2007 7:04am Nov 13, 2007 7:04am
Quoting temporary
Ruby I like the way you try to support that knowledge is something
very powerful.It took me a long time to write this so I hope that you will also spend some time reading it because judging the kind of person you are from what you write I'd like to help you clarify some things in your mind.
OK

Quote

Please read carefully.
There is one thing that is always certain in the market .I don't know where the market is headed all the time but one thing is certain: the market will fluctuate.
Market prices will change.If they remain constant forever what we call market now will not be a market anymore.
The concept of what is called change lies deep within everything that surrounds us.From weather to human behavior.Our purpose as traders is to find how this change is happening and earn from it.We aim to define all those properties that remain unchangeable in the market.All those behaviors that keep repeating themselves and remain always the same in order to tame the markets.
This is the act of pursuing knowledge in the market and generally in everything.
Find what remains constant under any circumstance.It's only our insufficient intellect the one that forces us to sometimes name as laws mere rules,proposals that in fact are not unchangeable but just statistically confirmed .

Please see http://www.forexfactory.com/showthread.php?t=40441

It's not a long thread.

Quote
After this brief introduction let me get to the point.

You silently assume that humans can be absolutely rational.
Humans even the most intelligent and logical of us are not immune to the notion of change.If brain is the part of a human entity that seeks stability through knowledge then what we call instincts is not something more but a different name for what seeks change constantly within us.
It's the part of our entity inherited to us from our beast ancestors .
It's something which we cannot affect and control easily only by the desire to do so.That's why religions and martial arts used to put so much emphasis on controlling them.If it was that easy so as to issue a command then things would be simple.Unfortunately it's not.
I understand. But when you KNOW, then it becomes like a reflex. I believe a person can be rational enough to trade properly if they know what to do. Put gas in the car. Get out of this trade now, don't wait for the stop to be hit, it has changed characteristic and the probabilities are now against you.
Quote
In a sense we resemble the markets.Bounded to change ,as them ,due to our nature.The only thing we can control is whether or not our decisions are to be made through logical reasoning while remaining unaffected by the instincts that always aim to throw us out of equilibrium .It's not that people have a choice or not to have emotions,it's a part of what we are.Some people can control them better by default some people cannot control them so effectively or at all.

I will state an example.Let's assume that you are drowning because there is a storm in the sea.You know very well that you have to swim as hard as you can to save yourself but still you cannot make it.Why's that?
Why the almighty knowledge of how to save yourself cannot save you from an occasion such as this?
[Even swimming like Ian Thorp is not going to save you in the middle of the ocean so please don't tell me that if you just knew how to swim better would help you.In fact consider the case that your one hand is broken.Even if you know that you have to swim and save yourself you wouldn't be able to do it even if you know that this is the only thing that you can do in order to save yourself.]
The reason is simple.Knowing what to do in order to be saved and being able to do it are two totally separate things.
You have given a problem with no solution, so the analogy to the market is not sound.

However, as in the market, you can increase your probability of surviving.

Swimming as hard as you can will only tire you out and attract sharks. Fine, if you just want to end it quickly. (Same result as from trading as hard as you can).

But, treading water in salt water is easier than in fresh water. You take a breath, sink a few feet, kick once, let out the breath, take another. You can stay afloat for some time this way. You can take off your pants, tie the ends of the legs and inflate them (learned that in Boy Scouts). You might stay alive until a ship came by and rescued you. All you can do is increase your odds as much as possible.
Quote

[Apply that to the markets.]
Knowing how to trade and trading are two different things.
I totally agree with you that for the ultimate trader there should be no difference.But consider one more example that will clarify things better.
Let's say we have locked a rocket scientist into an empty cage.
If we order him to build a rocket,will his knowledge be enough for that purpose?Does it matter how well he knows how to build rockets?
No.At least he must set himself free from that cage.
That's how you should see yourself as a trader.
You are in a cage bounded by your emotions due to your human nature.Knowing that you are locked in there is the first step you must take in order to set yourself free.That's what you must understand first.
"Ordering" yourself with magical words out of the cage won't help you.You have to figure a way out.Saying to yourself that emotions do not matter is not sufficient to set yourself free.You have to figure out the nature of the cage and find a way out.Then you can worry about how to build the Rocket ...

If by any god given chance you are a person of such good nature (which is not improbable) that you can control the state of your emotions with no special effort purely with the power of your reasoning then you should better understand that this is not the case for all people.

I am a very emotional person, moreso than probably anyone I know. But, give me a job to do, and I immerse myself in it and get it done, and do an excellent job, and a lot faster than most people. But I have to know how to do it. If I run into a roadblock, I look at a physics book or engineering handbook, or run some research to find answers that aren't written anywhere. I don't go exploring my feelings to learn how to design a circuit or write a program.

Tell me something you are very good at. Now, how did you learn to do that? If you're a good psychotherapist, that doesn't count, come up with something else. What, other than passive, role did psychology play?

Quote

Knowing the solution to a problem doesn't mean that there will always be a way to solve that problem since there are conditions that cannot be met or realized through the power of our brain only.One last example.Let's say you are in a burning house in which all the exits are permanently blocked and they cannot be used.Knowing that you have to get out will not save you.The sentence "I have to get out" is contradictory to the "There are no exits." because the first one essentially means "I have to find and exit" and since all of them are blocked both conditions cannot be met simultaneously.The one is a process of mind and thus it cannot overcome the cruel fact that all the exits are inevitably blocked and you have no means of opening them.One more occasion that knowledge cannot help you.
Saying "I have to get out" is like saying "I have to make money trading".

In either case, saying it does not solve the problem.

Your analogy is that knowledge will not help you, psychology is necessary.

So, if the answer to successful trading is psychology, then that would have to be the way out of the building also. Just use psychology to get out of the burning building, right?

That's the nice thing about trading. You can ALWAYS get out. You can do it when you smell smoke, or when you see flames, or you can wait until the pain is unbearable, but you can always decide when to get out!

Yes, there are always market conditions that cannot be traded, or that you don't yet know how to trade. Stay out, or take a very small position for learning's sake. Or, if you're in and see that everything's getting shaky, get out. But you have to learn to recognize it, and you're ONLY going to get that from watching price for lots and lots of hours.
Quote

I know that I am going to die,Can I save myself comes the question or entropy will never let me ?

Lastly a true story about human nature...

During the summer I found myself at a mountain village along with some friends .That village had very few inhabitants and among them there was a rich crazy old woman that had two home nurses taking care of her.
Every now and then,as someone told me ,[I only witnessed it once] that woman would snap and would think she was 12 years old girl.
When this happened she tried to get out of the house and leave the village seeking for her mother.
The nurses that tried to stop her from leaving had a hard time holding her inside as she would
scream so much that she could be heard 200 meters from her house all the way to our house.

Having the comfort of distance I noticed a pattern in her screams.The first time she started
screaming at the nurses to let her out the whole thing lasted about 15 minutes.Then the voices
almost stopped until she could hardly be heard.
After sometime which unfortunately I did not remember how long it was since I thought the whole
thing was over she started screaming again this time the voices kept intensifying over time .
My friends were horrified .They told "How long will this continue?".
Drawing a parallel with the market theories like Elliott wave I told them.Don't worry soon
she will stop and then she will start one more round of fighting with the nurses which
will be more intense than the previous especially in the end but it will last the same amount of time
approximately with the second.
Indeed she stopped and things went exactly as I told them.
The funny thing is that after the third wave she stopped for a long time and then she started shouting but for only 1 or 2 minutes and with less intensity.I guess the was the B wave that I forgot.
I guess Bob Prechter would be delighted if he knew this story.

Human behavior is as it seems governed by those same patterns that we often meet in the markets

At last, a use for Elliot waves! LOL! Oh, I crack myself up....

Sorry, couldn't pass that opportunity up. I know absolutely nothing about EW, it just seems like I don't hear good things too often.

It's an interesting story, for sure, thanks!
  • #148
  • Nov 13, 2007 7:10am Nov 13, 2007 7:10am
Quoting temporary
When I see these things Ubeee the book ends up in the trash can or if it is not mine to his owner immediately without any further delay.
ubeee's quotes are from 1984, temp. The book, that is, not the year.
  • #149
  • Nov 13, 2007 7:14am Nov 13, 2007 7:14am
If more people just accepted each other's beliefs as being valid for that person the world would be a lot better place. There is an absurd amount of energy put forth on these boards by people trying to disprove other's beliefs.

I believe that once everyone gets old enough they realize it just doesn't matter what he or she thinks as long as their actions don't interfere with my life. But the young, as a rule, don't know this, hence all the bullshit.
  • #150
  • Nov 13, 2007 7:15am Nov 13, 2007 7:15am
Quoting Wolf.
I think it was Henry Ford who said:

"whether you think you can or you think you can't either way your right"

And Thomas Edison:

"Genius? Nothing! Sticking to it is the genius! I've failed my way to success."

Two of my favorite quotes.
Edison I can relate to.

Ford, well, we really do have to think this way, but I take exception to the old, "you can do anything if you put your mind to it".

I could never have been an olympic gymnast, no matter what. I'm tall. End of story. For that matter, every one of the top 5 or 10 thought with every ounce of their being that they would win the gold. There were just too many years of work and practice and training not to. All were wrong except one.

Am I a pessimist, or just being accurate?
  • #151
  • Nov 13, 2007 7:20am Nov 13, 2007 7:20am
Quoting Dopey
If more people just accepted each other's beliefs as being valid for that person the world would be a lot better place.
I agree. That's the whole reason this thread started. I was tired of being told it was just in my head.
  • #152
  • Nov 13, 2007 7:28am Nov 13, 2007 7:28am
OH MY GOD!!!!

Geez I just HAAAAAAD to take that long signal on the pound, holy shizit!!!

Dang, I had 15 pips in the bag for the day, main account up 0.6% and just lost 27 pips. Cripe.

(Good thing I held to my rule and took it in my old OANDA account).
  • #153
  • Nov 13, 2007 7:56am Nov 13, 2007 7:56am
interesting thread
  • #154
  • Nov 13, 2007 8:29am Nov 13, 2007 8:29am
Quoting blueruby
You're really into movies and TV, aren't you? I think maybe I see the problem. I hate to break it to you, maybe your shrink is afraid you're not ready for this, but here goes: life is not like TV and the movies.

That's a good quote you've pulled up. I don't know where it came from or how long ago I posted it, or what I was thinking at the time, or what psycho book I'd just read. You must have combed everything I've ever posted to find that. Congratulations. Does this mean you're in love?

However, it's a pretty good post. "Establishing rules" is kinda like setting up a system to follow, regardless of any mental considerations, isn't it?

Obviously I thought at the time that it was the stress, or my personality causing the mistake. The fact is, I ran into something I didn't know how to handle, again and again, and there was stress. There was emotion. That's what I've been saying all along.

Any market condition which I don't know how to handle, I will screw up again and again. It's not fun when you don't know what to do, there's stress. But, take note: the stress, and the mistake, are due to lack of knowledge. Once you learn how to handle that particular thing, you just handle it when it comes up.
Good try - just re-read the first line and this time put it into practice
"to establish rules that will keep my personality from getting in my way". Any further explanation is pointless.

And while you are at it you might consider locking this thread from continuing to perpetuate what seems like a never ending cycle of back and forth on a subject that is the key to trading and I think someone said early on, is the key to most aspects of life - getting your head straight. No you don't need a shrink to do that. No need for analogies or theories either.
  • #155
  • Nov 13, 2007 8:44am Nov 13, 2007 8:44am
Quoting SeekingLight
Ach you know what, I'm gonna simply refer to my "discussing is pointless, learning comes from trading" post and quit this nonsense.

Most discussions aren't discussions but pitting beliefs against one another.

A Mac user won't convert a PC user and vice versa until one of them secretly has actually tried to USE the other guy's machine for a while.
...funny, I use both...

********
heya fellas,

A thread pictured below is one of the most important threads that a new or loosing trader should digest. Those are not my words btw...
..96% (lol) of that threads' participants make money... (go figure...)
....yet the author, who started 'psychology is nothing', never read it, nor he knows it exist...

Fiji traders is one of the most successful traders and entrepreneurs here, that I know of. If you have break from posting here, go use built in FF search function to find his posts. They're REAL gems......
g.luck
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  • #156
  • Nov 13, 2007 9:03am Nov 13, 2007 9:03am
Quoting Dopey
If more people just accepted each other's beliefs as being valid for that person the world would be a lot better place.
There is no problem at all when people is doing well (making money) while believing whatever they want to believe.
Problems arise when someone that is not doing well (not making money) asks for help suggesting that maybe the problem is not in "his head" and people keep insisting that it's there.

Why is this a problem?
Because they keep insisting on something that for its own nature is not falsifiable in any way.
Now this is exactly the same old well-known strategy used by all sort of scam quacks, cheat preachers, alleged magicians, crystal ball and hands readers and so on. All they do is keep saying "you have to believe it in order to have it to work, you need to have faith, you need to have the right mental attitude, it's because you don't believe in yourself" and so on.

All of this is not falsifiable, meaning that it is not possible to verify them with a scientific approach. All you have to do is to pay them anyway, because the problems are always in you and you cannot contrast their affirmations.

Well, in trading fortunately things are different. If you sell me a system I can backtest it and don't pay you at all if it is not profitable. The problem is in my head? Well let's backtest together, let's see together where the problem really is. If I was wrong, well I now learned (that was not "my head" just my ignorance) if I was right, well the problem was "your head" not mine!

I've learned that 99.999% of the times "my head", "my mental attitude", "my will-power", "my discipline" is involved in the supplying of some service or goods I have to pay for, it's a scam.
I buy things and services only by people that say "you can be a dumbass, it works" and only if they offer money-back guarantee.
The same is for free suggestions. Not that I think I'm perfect, that I have blood ice or my discipline is superior and bullet-proof. It's just that I get suspicious when someone puts "my head" in front of "his arguing".

Well, now, having said all that I repeat: I strongly believe that extreme DISCIPLINE and the right psychological attitude in trading are MANDATORY!
Pity is they are not enough at all to be profitable and for me they were by far the most easy part.

Just my opinion based on my experiences.
.Ubeee.
  • #157
  • Nov 13, 2007 9:16am Nov 13, 2007 9:16am
Quoting Dopey
If more people just accepted each other's beliefs as being valid for that person the world would be a lot better place. There is an absurd amount of energy put forth on these boards by people trying to disprove other's beliefs.

I believe that once everyone gets old enough they realize it just doesn't matter what he or she thinks as long as their actions don't interfere with my life. But the young, as a rule, don't know this, hence all the bullshit.
DITTO!!!
  • #158
  • Nov 13, 2007 9:30am Nov 13, 2007 9:30am
Quoting Dopey
If more people just accepted each other's beliefs as being valid for that person the world would be a lot better place. There is an absurd amount of energy put forth on these boards by people trying to disprove other's beliefs.

I believe that once everyone gets old enough they realize it just doesn't matter what he or she thinks as long as their actions don't interfere with my life. But the young, as a rule, don't know this, hence all the bullshit.
Very nicely put....i couldn't agree more.
  • #159
  • Nov 13, 2007 11:04am Nov 13, 2007 11:04am
Quoting SunTrader
Good try - just re-read the first line and this time put it into practice
"to establish rules that will keep my personality from getting in my way". Any further explanation is pointless.
Oh, well, gee, I guess you got me. You're right.

Half a line, from who-knows-when, out of context, while ignoring even the rest of the post it was in....

What you've proven is that you can search someone's journal, which they probably started because they were totally and completely lost in the first place, and looking for any help of any kind, pull up something they once said, and use it against them to try to win an argument.
  • #160
  • Nov 13, 2007 3:03pm Nov 13, 2007 3:03pm
Quoting blueruby
Oh, well, gee, I guess you got me. You're right.

Half a line, from who-knows-when, out of context, while ignoring even the rest of the post it was in....

What you've proven is that you can search someone's journal, which they probably started because they were totally and completely lost in the first place, and looking for any help of any kind, pull up something they once said, and use it against them to try to win an argument.
What I expected. Dopey is right though. C-ya.
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