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Psychology, Trading and You

  • #1
  • First Post: Jul 21, 2006 11:11pm Jul 21, 2006 11:11pm
This is a thread about Psychology, Trading and You.

Plainly and simply, if the right materials are digested psychologially and emotionally, you will simply just not fail to meet your goals, if we are ready for it. Anybody can do this. Trading and the Consistent mindset can be learned. It is a matter of keeping your emotions positive, without the euphoria of massive success affecting your mindset. You only need to spend so much time programming yourself before you actually make it habit.

My missing pieces are not your missing pieces, but we are not whole unless we are happy and we have everything that we could ever want. Don't struggle any longer through life not having what you want, open up and dive into your full potential, learn how to throw off the weight of your emotional imbalance and psychological egoism, and start making the pips / drawdown curve something to be very proud of not because you are working harder in your market analysis, but because your mind has remarkably started to function in unison with itself for your best interests.

For the best resources on this I know, I would recommened

thesecret.tv
"Trading in the Zone" by Mark Douglas and Left Brain Trading, by niceguy
Seeking the professional guidance of a reputable trading psychology expert.

The 5% of traders we all wish we were if we are not them simply think differently, and it can be learned.

You gotta ask yourself why are you feeling pain man. Why are you feeling it in your wallet size too. Don't back down from the ultimate challenge, get disturbed that you are not at your full potential, to get the drive to reach it. Sometimes relaxing and letting go is what we need to do in order to grasp out full potential.

I have spent years in meditation circles. There is no better article in the world on meditation than this one.

http://www.energyarts.com/cms/index.php?id=226

Anyone else with some ideas on how traders can really realize their infinite potential, transform their abilities and mindset, and also be able to follow through given the immense, sometimes olympic difficulties.

Good Luck Ya'll
I keep a close watch on this chart of mine...
  • #2
  • Jul 22, 2006 12:36am Jul 22, 2006 12:36am
I think you are right

Psychology is everything, at least that's what all the "greats" seem to say.
  • #3
  • Jul 22, 2006 6:50am Jul 22, 2006 6:50am
Something that helped me develop the mindset of which you speak was to spend less time as a loser and more time as a winner. Starting in the beginning of the week I would try and find a good trade that I felt was sure to be a winner. If I lost the trade, I would continue looking for another winner. If I won the trade (even by just a few pips) I would not trade agin until the following week.

For a month or two I went into every weekend on a win and it really helped me identify myself as a winning trader. Once I genuinly saw myself as a winning trader my actual results began to exceed my windest expectations. Now every winning trade is just positive reinforcement...

This also had the advantage of enforcing the discipline to be selective in my trades; the value of which should not be underestimated. Luck be with you.
  • #4
  • Jul 22, 2006 7:32am Jul 22, 2006 7:32am
Quoting Darkstar
For a month or two I went into every weekend on a win and it really helped me identify myself as a winning trader. Once I genuinly saw myself as a winning trader my actual results began to exceed my windest expectations.
This I think is the process for embedding in your subconscious that you are a winning/successful trader.
The mindset... The one that according to M. Douglas is the one that seperates the winners from the losers.
Or in other words - psychology. Which I very much agree with also.
  • #5
  • Jul 22, 2006 8:43am Jul 22, 2006 8:43am
Quoting Darkstar
This also had the advantage of enforcing the discipline to be selective in my trades; the value of which should not be underestimated. Luck be with you.
Interesting, Darkstar. I've been reading several of the books that are recommended to newbies on this forum and keep hearing that it's common for top traders to only win on 50% of their trades - some have mentioned even as low as 30%. The point was to manage money and even with a low winning rate the system can be nicely profitable.

I'm curious what your thoughts are on that approach which appears to be quite different from yours?

Squid
  • #6
  • Jul 22, 2006 8:54am Jul 22, 2006 8:54am
The actual money you have in the trade should not matter, your decisions should be based on only price action. Once you start focusing in on the money, then you need to exit out of the trade.

The best money is made effortlessly. Meaning its like 'free money', if you need to think about it hard, about whether you should enter or not, then don't.

Then you have the 'zen' moments, where your 'intune' with every little subtlety in price action. The waves need to be atleast 20 pips wide for risk reward to be worth it. Since most likely your giving up 3-4 pips on entry and exit, your giving up 8 pips minimum to the dealer. You should be looking to make atleast 10 pips on the trade. I rarely do it, unless I'm in a nirvana state and those pips I give up to the dealer does not matter, and I enter in and out with 3 -5 pips profit, over and over throughout the night, with atleast 5 -10 cycles in a given night.
Price is the only indicator.
  • #7
  • Jul 22, 2006 11:21am Jul 22, 2006 11:21am
Quoting Squid
I'm curious what your thoughts are on that approach which appears to be quite different from yours?
I think it's complete and utter horse****. For the guy at home it's helpful to believe that even the best traders fail more often then they succeed, but you will NEVER be a top trader with less then 80% winners.

No matter how irrational it may seem, the market is not a probability distribution. The sooner you accept that it IS beatable, the better off you'll be.
  • #8
  • Jul 22, 2006 12:33pm Jul 22, 2006 12:33pm
darkstar is right

Trading like that is like running with an anchor tied to your feet. There are traders out there getting 90% and more wins consistantly, with a good win/loss size ratio, and no big drawdowns.
I keep a close watch on this chart of mine...
  • #9
  • Jul 22, 2006 1:32pm Jul 22, 2006 1:32pm
I politely disagree with both statements. I think your view of the market is too strict. What isn't working for you may work for others. And viceversa of course.

If you have a 40% success rate but Reward:Risk is at least 3:1 then you easily come out as a winner.

As for the market as a probability distribution (if I correctly assert what you mean here), from a technical point of view only, price patterns offers you an edge, thus a probability to come out ahead.


Quoting Darkstar
I think it's complete and utter horse****. For the guy at home it's helpful to believe that even the best traders fail more often then they succeed, but you will NEVER be a top trader with less then 80% winners.

No matter how irrational it may seem, the market is not a probability distribution. The sooner you accept that it IS beatable, the better off you'll be.
-soso
  • #10
  • Jul 22, 2006 2:00pm Jul 22, 2006 2:00pm
If you have 40% wins 3:1 Ratio you are 50% sucessful.

Yay you are successful, but that is not the point of this at all my friends.

If you have 95% wins and a 1:1 ratio you are 95% successful.

You are making almost twice as much money with the same risk, but you can increase your risk as well.

This is what being an elite trader is all about, I didn't get into trading to become a good trader and make some dough, I got into trading to become elite, as good as a trader could be. Not as good as I can be, but because who am I really? Can't I change? Can't I unleased genius potential when before I struggled are barely made it through school? (einstein)

So with respect, yes there are more ways than one to skin the cat, and if you are a happy with 50% success rate, by all means enjoy that happiness. But really I am only interested in making the most possible, because why not? Why not continue? Why settle for anything less?
I keep a close watch on this chart of mine...
  • #11
  • Jul 22, 2006 5:34pm Jul 22, 2006 5:34pm
Quoting ManInBlack
If you have 40% wins 3:1 Ratio you are 50% sucessful.

Yay you are successful, but that is not the point of this at all my friends.

If you have 95% wins and a 1:1 ratio you are 95% successful.

You are making almost twice as much money with the same risk, but you can increase your risk as well.

This is what being an elite trader is all about, I didn't get into trading to become a good trader and make some dough, I got into trading to become elite, as good as a trader could be. Not as good as I can be, but because who am I really? Can't I change? Can't I unleased genius potential when before I struggled are barely made it through school? (einstein)

So with respect, yes there are more ways than one to skin the cat, and if you are a happy with 50% success rate, by all means enjoy that happiness. But really I am only interested in making the most possible, because why not? Why not continue? Why settle for anything less?
It was this exact mentality that has led me to ~3:1 at 85%. It IS possible and working to achieve any less is just walking a painful route to mediocrity.
  • #12
  • Jul 22, 2006 7:59pm Jul 22, 2006 7:59pm
Anyone starting out in FOREX, and going live with a real account with a small grub stake, should position trade and wait for a good entry point. Only when you have amassed a small fortune can you scalp a few ticks here and there.
Price is the only indicator.
  • #13
  • Jul 22, 2006 8:32pm Jul 22, 2006 8:32pm
Darkstar, exactly

The masses are essentially duped generally about 1 000 000 000 000 times a day. The entire world is under mind control. It takes psychology to be able to avoid hypnosis. People are like sheep, being manipulated by forces that do not have their best interests in mind. Too bad we are also our own sheep dogs, keeping each other in ignorance. A lot of people are waking up right now.

I dare anyone to say 99% is not possible, that you couldnt have 400 wins in a row, or whatever. Try and prove that it's impossible, or that it's pure luck if someone does, while I dismantle your limited belief system for you. What is impossible, why is it impossible. It's the 4 minute mile, because nothing is impossible. Furthermore, there is good reason to set your goals on heavenly impossibilities if you believe in many lives after death. Anyway the point is that people who are sucessful think differently and sometimes people need to have their ego shattered by a well meaning reality check. The problem is with yourself you egomaniac with an insecurity complex, not the market, your ex-girlfriend or the secret world government.
I keep a close watch on this chart of mine...
  • #14
  • Edited 11:16pm Jul 22, 2006 11:06pm | Edited 11:16pm
further more, % net in a year is nothing. It's profit in a year. 1000000% is a number. It is in your mind that you are happy with you 100% years, something deep within you that understands the market should be what is controlling your trade, not your limited belief systems, and the guys who trade 1% and get 6% a month, know about stories like those in market wizards or from local ledgends, like some of you I highly respect and aspire to be like.

Maybe they think those guys that had that amazing success are just lucky, and thats too dangerous. They weren't lucky. Listen to Warren Buffet, the man really taught me something about doing what I know, I know how to master something I am passionate about. Never before in history was there anything like forex on the internet. To me it is something grand and erotic at the same time. It really gets me off.

Listen to the guys who say once you mastered it, you lose the excitement of it all, because it becomes something like, brushing your teeth. Yes you need to not let euphoria slow you down or affect your mindset, but still those same guys get something out of it too, not just what they used to. When I visualize myself actually making money it feels like I am really just winning the lottery every day still(im broke no job and 200 in my trading account thats in there for good)

Try your hardest to not let your programming affect your emotions, is the trader psychology mantra.

Alexander Edler tells his traders to go to an A.A. meeting, and replace alcoholics with losers. Why? Because take a look at this...

1. We admitted we were powerless over the market - that our lives had become unmanageable.

2. Came to believe that a Power greater than ourselves could restore us to sanity.

3. Made a decision to turn our will and our lives over to the care of God as we understood Him.

4. Made a searching and fearless moral inventory of ourselves.

5. Admitted to God, to ourselves, and to another human being the exact nature of our wrongs.

6. Were entirely ready to have God remove all these defects of character.

7. Humbly asked Him to remove our shortcomings.

8. Made a list of all negative drivers and belief systems, and became willing to completely reformat my hard drive and install new software.


9. Did whatever I could to be positive, happy and trading in an infinite way, except when do train so hard would burn me out or make me suffer.


10. Continued to take personal inventory and when we were wrong promptly admitted it.

11. Sought through prayer and meditation to improve our conscious contact with God as we understood Him, praying only for knowledge of His will for us and the power to carry that out.

12. Having had a spiritual awakening as a result of these steps, we tried to carry this message to losers, and to practice these principles in all our affairs.

You gotta want it, so bad, that you'll totally be willing to allow the truth to guide your life, that we are programmed to think will only lead to more suffering, but that is the greatest trick of the devil, tricking you that he doesnt exist. You believe the lie, because the ego uses doublethink to make you forget what the truth is, even if you realize it. Freedom and infinite expiernce and potential does exist, even in the depths of a prison gulag.

I keep a close watch on this chart of mine...
  • #15
  • Aug 17, 2007 3:55pm Aug 17, 2007 3:55pm
Maybe a two step program?
1. think and act like a succeesful trader
2. trade succeesfully !
  • #16
  • Mar 10, 2008 6:53am Mar 10, 2008 6:53am
Thanks ManInBlack...

I'm completely agree. Cause I already see a lot of my friends that know a lot of potential in forex market, yet there are 1001 Reasons for them to not play in forex market.

Thank you for your share and thought.

I completely agree. It starts from our mind, our inner talk that could change your whole perspective and way in trading.
  • #17
  • Jun 11, 2008 1:17pm Jun 11, 2008 1:17pm
Bumo for the new guys, read the piece about AA for sure.
I dream, therefore I become.
  • #18
  • Mar 17, 2009 4:38am Mar 17, 2009 4:38am
bump
Money & Pain Respect the market, protect your capital, be patient
  • #19
  • Nov 23, 2009 5:46pm Nov 23, 2009 5:46pm
Quoting toyboy tramp
bump
Just read it. You guys that are going through the cycle of having trades knocking out your winners, this thread could be an aha moment for ya.
I dream, therefore I become.
  • #20
  • Nov 26, 2009 6:30am Nov 26, 2009 6:30am
Quoting ManInBlack
Darkstar, exactly

I dare anyone to say 99% is not possible, that you couldnt have 400 wins in a row, or whatever. Try and prove that it's impossible, or that it's pure luck if someone does, while I dismantle your limited belief system for you. What is impossible, why is it impossible. It's the 4 minute mile, because nothing is impossible.
It's not possible - there I said it!

What a dumb attitude - there are plenty of things that are impossible, just think about it.

You seem to be getting yourself in to some sort of disillusioned state and are trying to find the Holy Grail. Don't even bother - you don't need to achieve 99% - just concentrate on emotionally dealing with those losing trades and using MM - or of course you could carry on kidding yourself that a mile can be run in 1 minute (because nothing is impossible).
I've got my pips - go get yours!
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