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The Winning Trading Psychology - sure way for consistent profits

  • #21
  • Jan 30, 2010 6:51am Jan 30, 2010 6:51am
I have been trading on and off for many years (and reading these FF for many years, I just do not post).... but at the moment, I am a trading rut. I have been searching long and hard for some answers to take my trading to the next level. In fact, it sometimes feels that the more I look, the more things I try and the more determined I am, the worse results I get.

I know that trading psychology is important. Anyone that is successful that does not think this is so already has a solid trading psychology, maybe due to their up bringing of other reasons and fortunate that they did need to work on it like other people. For them, its just a little harder to understand as they already have a good psychology programmed in, most likely from a young age. That's great.

When it comes to trading psychology threads, books, articles, etc, I normally just say to myself "yep, I know that, I know it's important, I've read about that, I agree it's essential", but move on. On an intellectional level I know all about trader psychology, but I am realising that that I have not dealt with matter properly on an emotional level.

I know that I am not not at peace when a trade is going against me. And trust me, I have had some BIG and BAD ones. I know I am dissappointed with myself when I do not take a good trade that I should of and then take bad trades that I should not. At present, most of trading is non-mechanical and inidicator free on low times frames (1m and 5m usually), so which trades I take and do not take is very subjective to being in tune with the market.

Trading psychology is where I need to spend some time. The beast is in me. It's appears controlled, but really running wild and untamed and lately for some reason it's been rearing it's ugly head causing me some trading problems. I'm cetainly not always at peace when trading, have expectation, gets upset after consecutive losses, get confident after consecutive wins. Tranquility and freedom from fear and greed are not the emotions I experience when trading.

Lately, I've noticed I have been setting my stops too close from fear of losing after suffering some losses. My last few trades (with very close stops 5 - 10 pips) would have been great trades (50+ pips) for my style but were tagged out by a few pips before the move. BUT I 'knew' the stops needed some more room, but had a bad run of trades and was 'scared' to loose more. Sounds foolish when I out this out there for everyone to read.

I am going to step back and look within. I have a good trading knowlege, solid strategies and fine ideas, but there is something stopping me from acheiving the results I 'know' that I am capable of.

This thread has helped me make the decision to focus on my trading psychology. I think I've been putting it off for years. Thank you Winston. Please keep posting. I am going to follow this thread carefully. Please keep posting.

Darren.
  • #22
  • Jan 30, 2010 8:59am Jan 30, 2010 8:59am
Quoting dazzdude
This thread has helped me make the decision to focus on my trading psychology. I think I've been putting it off for years. Thank you Winston. Please keep posting. I am going to follow this thread carefully. Please keep posting.

Darren.
Hello Darren,

I am blissfully happy that you are benefited! i knew this thread would benefit atleast someone! and provide a clear perspective on Trading world. Cuz The real Trader's life is very different from Mentors, Brokers , Consultants and other people in this industry......

Also there are more than 90% people who have other business or job as their main support and very few of us Trading for Living. I want to extend my all possible help to all the people and esp those who trade for living cuz the Real trader's Journey is very very different!

Wish you the Best
Winston
Trading is a delicate balance of Strategy , Money management and Psychology
  • #23
  • Jan 30, 2010 9:28am Jan 30, 2010 9:28am
Quoting Sempreviva
I am sure at the end the conclusion comes to the MM and much less to the technical s or fundamentals. Good MM skills will eliminate your beast insight you and will protect you when you ll be cocky greedy fearless stubborn... but most importantly I would agree would lead you in peace of mind!

thank you
no offense, but based on my personal experiences of my trading for the last 4 and a half years. the above is total nonsense..... and written by someone with very little to no trading experience.

all the MM in world will not help you when you go into a pycho state of mind and drill your account.

I know it doesn't cuz I have been there.... it's as if you're paralyzed, you know what you're doing is wrong and will blow your account but you cant stop.

it's a strange place...... and MM doesn't do a damn thing to help you!

Please drop that idea from your mind Sempreviva....

cheers
  • #24
  • Jan 30, 2010 10:40am Jan 30, 2010 10:40am
I will be keeping up with this thread. Any trader that has taken the time to learn the art reaches the final hurdle; himself/ herself. I've begun to realize in recent times that this is the most dangerous and difficult hurdle to overcome. The psychology behind trading is one that even if you can see it and understand it, is still difficult to deal with. I learned that the hard way and continue to learn that. I appreciate your truths and look forward to what you have to say, one universe.
  • #25
  • Jan 30, 2010 1:45pm Jan 30, 2010 1:45pm
Quoting oneuniverse
Hello Darren,

I am blissfully happy that you are benefited! i knew this thread would benefit atleast someone! and provide a clear perspective on Trading world. Cuz The real Trader's life is very different from Mentors, Brokers , Consultants and other people in this industry......

Also there are more than 90% people who have other business or job as their main support and very few of us Trading for Living. I want to extend my all possible help to all the people and esp those who trade for living cuz the Real trader's Journey is very very different!...

Hi Winston,

Thanks for starting this tread, being a full time trader myself I know that having a right trading psychology is one of the most important things to have. I am sure many traders will benifit from this.

Regards,

andrew
  • #26
  • Jan 30, 2010 7:54pm Jan 30, 2010 7:54pm
What I was looking for. I am at the final stage...I've made a lot and lost a lot...but I now have a good, repeatable system for profits, I'm happy about that and feel good. But despite all my good trades I will have one that throws me off. I'm hoping that focusing on my beast within will enable me to STOP putting my Stop Loss closer than my rules and experience tell me.

It's like I'm a zombie...I know my SL should go to XXX level, but I put it 20 pips closer to the entry....result= Stopped Out.

I constantly find myself saying the following: "So...I'm OK with losing 700.00 dollars on a trade, but not 740.00"? WTF? It's ridiculous..but I"m like a zombie out of control and going against my own thoughts, feelings and logic!!!

HELP!
  • #27
  • Jan 30, 2010 9:23pm Jan 30, 2010 9:23pm
Quoting jzw
Yes it is - but saying you need the right psychology to be a successful trader is not specific enough to help anyone. To be a trader it all boils down to -

a profitable strategy and the self-disciplne to follow that strategy.

There are many threads on FF and books on trader psychology but I just don't think it is any more complicated than the above statement.

If you are not a profitable trader the starting point is to determine why you are not profitable. Most people are unprofitable because they don't have an edge.
Exactly right, and the reason so many traders turn to "Trading Psychology" or "Money Management" as if they are somehow the 'key to success' and will miraculously turn them into profitable traders, is because they are the simplest aspects of trading.

Reading some books on trading psychology and trying to apply it to your trading is easy.

Coming up with some simple money management rules is easy, anyone can do it.

Developing an Edge is HARD and may take years even if you have the aptitude to accomplish it.

My advice to a new trader would be to focus 100% of your efforts on developing an edge - a system, a methodology, a framework of indicators, an understanding of market behavior, an ability to identify patterns of behavior - something, anything that gives you SOME kind of ability to predict future price behavior, because, don't let anyone fool you, trading is ALL about predicting the future.

Once you have an edge that you can rely on, then you can start worrying about psychology, and MM, and all that other stuff.
  • #28
  • Jan 30, 2010 10:47pm Jan 30, 2010 10:47pm
forget every thing....just stick to some thing really simple,repetative and profitable chart pattern and just keep on trading same thing...is that hard to understand?
  • #29
  • Jan 31, 2010 12:06am Jan 31, 2010 12:06am
Hi,

I think there is a misconception going here that this thread only focuses on Psychology...........

Posters please read the content carefully before you comment anything!

From the start of the thread, i have been tellin you MAP-TOUR-JOURNEY all are interlinked.

all the three aspects complement each other. I realise the importance of Edge in trading, but that alone cant make you successful trader, again cuz trader's life is different. May be Edge alone can make you excellent Tip Seller hehe.......

There is even a psychology when you find an Edge for you.....will discuss it in depths later.....

See......

Edge
MM
Right Psychology will make you successful trader

Right Psychology is something more than just Trading Psychology, it's your personality......if you are sick close minded negative psych.......i bet no edge and MM and mentors can make u profit.......hehe

Edge - MM - Psych are connected making a circle..offcourse there are other factors too......

When you dont have right Edge....the psych starts craking making you drive the MM bike crazy and finally ..doom

When you have right Edge.....so right edge that you start disrespecting the MM and your own psych and above all the King of all ' The Market' .....doom is sure

People, it's all about Balance between Edge...MM.......Psychology when it comes to Real Trading for Living....

We will cover all these ascpets more later.....probably on weekends since i am busy on trading days

All the best
Winston
Trading is a delicate balance of Strategy , Money management and Psychology
  • #30
  • Jan 31, 2010 12:11am Jan 31, 2010 12:11am
andrew, pilotui, aguaman and all others

thanks for understanding the thread! stay tuned .....


Cheers
Winston
Trading is a delicate balance of Strategy , Money management and Psychology
  • #31
  • Jan 31, 2010 12:15am Jan 31, 2010 12:15am
I agree with many of the comments on this thread. I'm a relatively new full time learner trader. I've blown a

couple of live accounts and done well on a few demo accounts.

I seem to do the opposite of most. Treat demo like real and trash real like a demo. My problem comes down to

the expectations. I want to forge a career in trading like all here and in my small real accounts a 1 lot x 20

pip winning trade would become a loser because the mind said what's $20 going to do for you?
In the demo, a 10 lot x 20 pips = $200. All of a sudden the mind changes thinking. $200 is a good wage for a

day so I take the profit and am happy.
I have come to the realization that I need to work a big account to fulfill my expectations.
If I can't then why bother to trade?
I love trading, learning and reading all about the fundamentals,the news, the correlations with different

markets but for me I need to see a reasonable figure or it's not worth while.
That statement probably sounds wrong, egotistical and arrogant. So I'm doomed to failure?
Maybe, but that is the truth. If you don't live by your truth then it's all a lie.
I know I can succeed because I have insight. I don't always use it to my advantage but when I'm focussed and

in tune I can see things unfold very clearly. Maybe that is my edge?
I'm beginning to see the fake moves and waiting for the real moves. I'm learning to stay with trends.I'm using

weekly pivots and waiting for the right opportunity to make a trade which is usually the end of the week when

currencies try and forge new high's or low's of the week.

I now know my biggest enemy is myself. My mind is not at peace. My emotions swing wildly from one trade to

another. This is the reason I'm back in demo mode so I can harness my emotions and use my energy positively.
I probably need to take up yoga and meditation. I know I can't succeed without fixing these emotional

problems. Hence I won't step back in till I'm ready and then with a reasonable sized account whereby a small

winning trade is actually rewarding.
  • #32
  • Jan 31, 2010 12:30am Jan 31, 2010 12:30am
Quoting ozpips
I agree with many of the comments on this thread. I'm a relatively new full time learner trader. I've blown a

couple of live accounts and done well on a few demo accounts.

I seem to do the opposite of most. Treat demo like real and trash real like a demo. My problem comes down to

the expectations. I want to forge a career in trading like all here and in my small real accounts a 1 lot x 20

pip winning trade would become a loser because the mind said what's $20 going to do for you?
In the demo, a 10 lot x 20 pips = $200. All of a sudden...
ozpips...

i suggest you that once you find " Edge " ( may be from few months to several years ! ) you start live trading on small accounts.....atleast that will prepare you for the journey!
And when you switch on large account , again you will find " Different You" ......so the point is at every Account size, a Different You will pop out! and if you are able to take care you this Different you, then with the Edge and MM supporting you, there would be no one on your way for financial Freedom!

Peace
Winston
Trading is a delicate balance of Strategy , Money management and Psychology
  • #33
  • Feb 1, 2010 1:07am Feb 1, 2010 1:07am
Apocalypto, you mention being paralysed. Oh, I understand. I really do. When you cannot even breath? I few years back I had a spread trade on wheat where the spread (half contract long, half short) was meant to be the protection (i.e. no stop - NO comments please - I KNOW) did not work out so well on a huge spike against me (both ways opposite to my positions) and wiped out an 80k account, (AND also wiped out my super annuation trading account ) and left me with nothing but the determination to start again.

pilotui, Not setting the correct stop? What! Letting emotion stopping you following your rules? Oh, I understand. I really do. No storis needed here.

Winston, Yes, it's ALL related and you need to ALL points to be successful (MAP or what ever you want to call it). I understand. It's a triangle and a triangle needs strength in all three sides. For me, for the immediate future, I have realised the weakest sided of my triangle is my trading psychology.

I do not think I have recovered mentally from a couple of major mistakes and losses and effects my emotional trading clarity. I'm on board with your thinking here.... I get you.
  • #34
  • Feb 1, 2010 3:53am Feb 1, 2010 3:53am
Quoting ozpips
...
I want to forge a career in trading like all here and in my small real accounts a 1 lot x 20

pip winning trade would become a loser because the mind said what's $20 going to do for you?
In the demo, a 10 lot x 20 pips = $200. All of a sudden the mind changes thinking. $200 is a good wage for a

day so I take the profit and am happy.
...
Perhaps you should trade a SMALL demo account in order to learn how to trade a SMALL live account.
..
  • #35
  • Feb 1, 2010 3:55am Feb 1, 2010 3:55am
Everybody or rather most who have posted are saying trading psychology is their problem, if it is then what is the solution?
  • #36
  • Feb 1, 2010 5:38am Feb 1, 2010 5:38am
The solution is a methodology which puts the odds in your favor. Most of the systems presented on this forum are either discretionary (= not teachable) or, if automated, no better than a coin toss.
Psychology is the least important reason the traders fail but it sounds sweeter than recognizing that their approach is wrong.
  • #37
  • Feb 1, 2010 6:51am Feb 1, 2010 6:51am
Quoting Sauron
The solution is a methodology which puts the odds in your favor. Most of the systems presented on this forum are either discretionary (= not teachable) or, if automated, no better than a coin toss.
Psychology is the least important reason the traders fail but it sounds sweeter than recognizing that their approach is wrong.
Interesting thoughts Sauron, so from what I get from what you are saying is that many lack a methodology that puts odds in their favor and blame it on their psychological makeup?

I would like to hear from other people especially the starter of this thread on what he thinks about this. I tend to think many talk and talk endlessly about their psychological problems but I do not hear anything about solutions
  • #38
  • Feb 1, 2010 7:26am Feb 1, 2010 7:26am
I don't think that you'll hear something from the creator of this thread in particular and from the creators of other similar threads in general.

And you understood correctly, the lack of an edge is the reason most of the traders fail. Let's go to the games theory.

You have 100$. You are allowed to risk 1$ per game.
We have a random number generator which generates number between 1 and 100. If the number is bigger than 45 you receive 1$. If the number is smaller you lose 1$. If it's 45 nothing happens.
Would you play this game? I think you would. Do you have to adjust your psychology? Do you need a gamer's mindset, or coaching, or to read "The 5 steps of becoming a better gamer"? You'd laugh at these ideas.

But if the game is the other way around and you win when the number is smaller than 45 and lose otherwise, well, you'll see yourself soon confronted with some disturbing losses. But you wouldn't play the game like this because you know that the odds are not in your favor.

In the market the most traders play without knowing the second game because the numbers are not so easy to gauge. And every few days some nice guy comes here and writes bullshit and makes them believe that all their dreams will come true if they adjust their brain.
  • #39
  • Feb 1, 2010 7:27am Feb 1, 2010 7:27am
Quoting FXSnipe
Everybody or rather most who have posted are saying trading psychology is their problem, if it is then what is the solution?
Hi,

The real solution is ..........

Edge + MM + Your Personal Psychology

i have been repeatedly telling here that it is a triangle and the Real success depends of Understanding of this Triangle.

Edge is surely the best thing which can improve your trading psychology..
Let's say you have great Edge or a trading method which has proved to be robust and successful......

but answer the following questions please..

1) can you sit for days without taking sinlge trade insipte of observing markets daily cuz the method has not triggered a Signal yet!

If no.......here is where your trading psychology will trouble you

2) Sometimes you are dead sure of the trade...do you suddenly increase your % risk exponentially?

if yes.........something wrong with your mind......

3) After 3 or more consecutive losses, do you tend to feel Low? and stop trading for a while inspite of knowing the edge is working for you?

if yes.......isn't your thinking process wrong

4) After the Method with the Edge has signaled, do you feel market is goining in your desired direction because of your method?

if yes........there is attached expectation and u will mess up sure!

5) If you are in good profit by your Edge Method, and take off those profits quickly,


there are many many such other questions ........

who is wrong the edge or you??/

It's YOu, you and you.........

Posters.......please read the thread carefully before saying that psychology is least important......

All three make up a Triangle.........

All the best
Winston
Trading is a delicate balance of Strategy , Money management and Psychology
  • #40
  • Feb 1, 2010 7:38am Feb 1, 2010 7:38am
Ok, if you are a master of this "triangle of succes", why don't you open a topic about a great edge?
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