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Psychology, Trading and You

  • #21
  • Jan 5, 2010 1:06am Jan 5, 2010 1:06am
Psychology is an important aspect, yes. One important aspect,what must be 'made' in harmony with the other aspects of trading.
  • #22
  • Feb 17, 2010 7:41pm Feb 17, 2010 7:41pm
Some quotes just to bump the thread, some good posts in here.


Paul Tudor Jones-
"I am more scared now than I was at any point since I began trading... I know that to be successful, I have to be frightened."

Mark Weinstein-
"Because I have a real fear of the markets. I have found that the greatest traders are the ones who are most afraid of the markets. My fear of the markets has forced me to hone my timing with great precision."
  • #23
  • Jul 1, 2010 4:40am Jul 1, 2010 4:40am
Guys I need Help!!!!!!! > brief background:
somehow my performance has become fraction of what it used to be, and I have consistently banked trading profits., My equity is £48,000, and i mainly trade Forex.On average I use to bank between £6K to £10K each month, average trade risking 2% of equity. however if I have a very strong setup, may risk 5% max, but this i only do if i have a good profit buffer.

so whats the problem????? FEAR

Fear of Loss
Fear of profit turning into a loss.

i use to have tremendous patience, and strictly only entered a trade when i have a signal, and I still do!

However, whats gone wrong, is I am now panicking....................
small loss, and i panik and exit
small profit and i panic and snatch it

example today, i was long EU, went in a profit, then went into -4 pips loss, and i closed, so missed the +100+ pip move
I entered EY long, went into +13 pips profit, and closed it

then i got a good short trade on CAD, but i procrastinated.

i cant seem to figure out why has my decision making not following my exit strategies.

Can someone help me???
share you experience? what you did to overcome
HELP!!

Will really appreciate your help.
  • #24
  • Jul 1, 2010 4:59am Jul 1, 2010 4:59am
Trading is a skill. It's not a science - it's an art.

Learning how to trade is like learning any other skill.

You have to gain some knowledge and then practice that knowledge. But not just practice thoughtlessly - you must develop also the observation skill, and observe what you're doing, why you're doing this, what needs to be corrected, and what do you have to do to correct it.

Simple as that. No need to add philosophy or mythology. There are no shortcuts, no easy ways.
  • #25
  • Jul 1, 2010 5:32am Jul 1, 2010 5:32am
Here some ideas:

1. You may have closed the second profit trade to cover previous loss.
2. You probably have less risk acceptance. You must decided that you may lose a specific amount of money; simply put, define SL and TP and let it run. The hard part is to truly accept the possibility of a loss. If this is the case you can simply reduce your lot size. You can also try with multiple entries and multiple exits.

Best,
Lirim

Quoting marwan2010
Guys I need Help!!!!!!! > brief background:
somehow my performance has become fraction of what it used to be, and I have consistently banked trading profits.,...
  • #26
  • Jul 1, 2010 6:13am Jul 1, 2010 6:13am
Yes, this happens to me once or twice a year, and in almost all cases it's because I've lost sight of what my entry and exit signals are. All of a sudden I don't know how I used to get into or out of a position. I solve it by stopping and re-learning what my signals were. It makes it easier to have them written down already, and I think one technique which would work better, but I have yet to do because of procrastination, is to print the charts of great trades and save them as examples for the future.

If you're not having an issue with the above, then I suspect it's performance anxiety. Either significantly reduce your position sizes or go into simulator - then essentially rebuild as if you were a beginner. It might take a month or two, but if this is the issue you'll need to do it.

Rob
  • #27
  • Jul 1, 2010 6:39am Jul 1, 2010 6:39am
yes I am getting good entries, so not an issue there, but yes it is performance anxiety....

have set down to analyse why this has happened? but cant seem to figure out,
i have not had huge drawdowns or anything negative

anxiety has just cropped up
  • #28
  • Jul 1, 2010 8:55am Jul 1, 2010 8:55am
Quoting marwan2010
yes I am getting good entries, so not an issue there, but yes it is performance anxiety....

have set down to analyse why this has happened? but cant seem to figure out,
i have not had huge drawdowns or anything negative

anxiety has just cropped up
Hmm the Human nature to control everything....


V
  • #29
  • Jul 1, 2010 9:24am Jul 1, 2010 9:24am
Quoting BackTestDummy
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).
Did you think that perhaps if you believe in what you are doing it is possible. Certain ways of trading set up to be able to do this. Ive traded perfect for about 3 month run before with 3-8 trades per week. Id say 99% is very possible but you have to believe in what you are doing. However on the other side I have seen people trade the the way you were speaking and making money as well the psychology part depends on the person some do well trading one way where another will trade well doing the opposite.
  • #30
  • Jul 1, 2010 10:22am Jul 1, 2010 10:22am
Quoting T.E.Lawrence
Trading is a skill. It's not a science - it's an art.

Learning how to trade is like learning any other skill.

You have to gain some knowledge and then practice that knowledge. But not just practice thoughtlessly - you must develop also the observation skill, and observe what you're doing, why you're doing this, what needs to be corrected, and what do you have to do to correct it.

Simple as that. No need to add philosophy or mythology. There are no shortcuts, no easy ways.
Someone give this man a vouch
Time hides Nothing
  • #31
  • Jul 1, 2010 11:43am Jul 1, 2010 11:43am
Quoting T.E.Lawrence
Trading is a skill. It's not a science - it's an art.

Learning how to trade is like learning any other skill.

You have to gain some knowledge and then practice that knowledge. But not just practice thoughtlessly - you must develop also the observation skill, and observe what you're doing, why you're doing this, what needs to be corrected, and what do you have to do to correct it.

Simple as that. No need to add philosophy or mythology. There are no shortcuts, no easy ways.
Not an advocate of the mechanical approach then?

I believe it's possible to learn a simple but profitable strategy, the problem comes in developing the psychology and discipline to apply it. Is psychology and discipline an art or a state of mind?
  • #32
  • Jul 1, 2010 12:58pm Jul 1, 2010 12:58pm
Quoting marwan2010
yes I am getting good entries, so not an issue there, but yes it is performance anxiety....

have set down to analyse why this has happened? but cant seem to figure out,
i have not had huge drawdowns or anything negative

anxiety has just cropped up
I worked full-time through my 20s as a classical and jazz musician, and now, in my 40s, continue to work part-time. Anyone on stage (actors, speakers/lecturers...), deals with performance anxiety the most. Some performers don't overcome it, and they take prescription beta-blockers, such as Atenolol.

Although I do take Atenolol, that's only half of the equation - the other half is being thoroughly prepared to play my part. That means long hours in the practice room, and being able to play a piece of music so well that I could do it while in the midst of having the flu.

This methodical discipline, for me, extends to trading. I've entered on my various setups so much that I don't question them - and if I do have a losing trade, my track record is good-enough that I can shrug it off.

If I did start to question my setups, I'd spend as much time as I needed just watching the market (or going into a simulator). If the market was indeed changing, I'd just need to modify my approach, which again, would mean watching and/or simulating.

Is this of any use?

Rob
  • #33
  • Last Post: Jul 2, 2010 4:49am Jul 2, 2010 4:49am
THANKS GUYS
really appreciate the feedback and comments. will take on board some of the suggestions.
Thanks again
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