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It's A Heart-Mind Game... Are You Ready?

  • #41
  • Edited 12:26am Jan 12, 2012 12:08am | Edited 12:26am
Quoting traider
The thread's general direction. Emotion is less an issue for someone I would suggest once they read candles with clarity. And in essence, that is where the journey lies. The exact same candle can be one thing in one setting and something else in another. Being able to discern these subtle differences is the key.

Just my pennies worth.
I agree very strongly with you there. If a trader has a good system...a solid and tight one that works for them, then they have closed the door quite a bit for emotional swings to have free course in their heart and mind. But, that is not all. Until someone has developed on the inside, no system can help. That courage/confidence loop takes time and if someone is still system hopping, it will take even more time. But, a solid system helps for sure. Can't disconnect the trading outcome from the performance of the trader: the two work always together. The system is just the go-between. Don't doubt that you already know that, but saying it for the benefit of other readers .

That was some pennies' worth in gold . Thanks. You should post more often LOL.

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #42
  • Edited 1:43am Jan 12, 2012 12:29am | Edited 1:43am
Quoting hilmy83
hmm..trading challenge? interesting. Looking forward to this
Hilmy83,

It's coming in February. Details in about two weeks or so.

Here's a hint: After taking the loss (making the decision to do it and doing it), what is the "next" hardest thing for traders to do? Imho of course.

@ Recent readers: NOTE: That is not the poll question by the way...check the top of the page.

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #43
  • Jan 12, 2012 3:30am Jan 12, 2012 3:30am
A passion to learn the meaning of the last set of bars in context of the larger (non)chart area
and let winners run,
or to let go just as much as a difficult goal
and also a loser,

is an edge that replaces the cruder emotional set, to rank (in ecstacy or depression)
or in/(with greed)e(with fear)gress
that trade.
  • #44
  • Edited 5:21am Jan 12, 2012 3:55am | Edited 5:21am
Quoting ha-pattern
A passion to learn the meaning of the last set of bars in context of the larger (non)chart area
and let winners run,
or to let go just as much as a difficult goal
and also a loser,

is an edge that replaces the cruder emotional set, to rank (in ecstacy or depression)
or in/(with greed)e(with fear)gress
that trade.
Hello Ha_Pattern,

Let's see if I can decipher your trading riddle ...

Success in trading comes from "a passion to learn the meaning" of the most recent bars in the "context" of the rest of the price action before them...earlier chart landscape.

Letting winners run...yes.

Letting go...difficult...and also a losing trade is difficult.
(Glad you mentioned letting go...to be continued later on: maybe after the poll).

Are you saying that the above points are an edge over the "cruder emotional set"...?

Are you also saying, if you trade with ecstasy (opposite depression) or trading with greed or fear: exit the trade?

That's my best shot I think. Please explain.

Thanks,

FX4

P.S. You have a very interesting image on your profile page on the Cycle Of Market Emotions. Would you mind posting it? Would love to see it but can't read the details.
Trade what you see, not what you think or feel. Let the market come to you.
  • #45
  • Edited 7:21am Jan 12, 2012 7:11am | Edited 7:21am
I was studying after what traider said:
Quoting traider
The thread's general direction. Emotion is less an issue for someone I would suggest once they read candles with clarity. And in essence, that is where the journey lies. The exact same candle can be one thing in one setting and something else in another. Being able to discern these subtle differences is the key.

Just my pennies worth.
Breakdown of my lines --

Quoting ha-pattern
A passion to learn the meaning of the last set of bars in context of the larger (non)chart area
and let winners run,
Sometimes, a price-action trader can read the chart so well that its direction becomes crystal clear.
Quoting ha-pattern
or to let go just as much as a difficult goal
and also a loser,
If such a thing as trade study is muddled, stay or get clear of it.
Quoting ha-pattern
is an edge that replaces the cruder emotional set, to rank (in ecstacy or depression)
or in/(with greed)e(with fear)gress
that trade.
Emotion does the same thing as a trade study does -- tell highs from lows and pushing forward versus running away -- except, being 'cruder', has a chemical emphasis that gets in the way of study.
(I describe emotion here as I find it in the cycle of market emotions.)
Quoting ha-pattern
to rank (in ecstacy or depression)
highs from lows
Quoting ha-pattern
in/(with greed)e(with fear)gress
that trade
pushing forward versus running away, as in the chart's trend angles and the balanced length and/or exaggerative tone therein.


My profile picture is something you can google with "cycle of market emotions".
I've tried to simplify it and tack on stuff to it in my journal, so I can, respectively, understand it and increase its worth to me.


One other thing:
The frame of mind I was in, when I wrote that post, was right-brain / intuitive, as in poetry.
This helped bring together the concepts, for me.
I find that trading is something you encounter, rather than fitting with a crowd; then, I can build with the right-brain merging a drawn connection between facts.
For others, numbers are easier to separate and digest information for the trade study with, since that's all other traders on the chart are reduced to.
  • #46
  • Jan 12, 2012 7:17am Jan 12, 2012 7:17am
Quoting ha-pattern
I was studying after what traider said:


Breakdown of my lines --

Sometimes, a price-action trader can read the chart so well that its direction becomes crystal clear.
If such a thing as trade study is muddled, stay or get clear of it.
Emotion does the same thing as a trade study does -- tell highs from lows and pushing forward versus running away -- except, being 'cruder', has a chemical emphasis that gets in the way of study.
(I describe emotion here as I find it in the cycle of market emotions.)
highs from lows
pushing forward versus running...

Thank You. Good trading wisdom. Will google the cycle of market emotions and post.


FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #47
  • Edited Jan 13, 2012 5:39am Jan 12, 2012 7:21am | Edited Jan 13, 2012 5:39am
Cycle of Market Emotions:

Per the image below: Optimism >> Excitement >> Thrill >> Euphoria [Point of Maximum Financial Risk] >> Anxiety >> Denial >> Fear >> Desperation >> Panic >> Capitulation >> Despondency [Point of Maximum Financial Opportunity] >> Depression >> Hope >> Belief >> Optimism.

The Ideal Situation: Optimism [Trade your system] >> Excitement [System performing as expected] >> Thrill [Price reaches profit target] >> $$ Chi-Ching $$ [Pay yourself: close the trade] >>Euphoria [Good place to clear your emotional cache: guard against overconfidence] > > > > More Optimism [Trade your system]...and so the cycle should go , right traders?

And if not...

[Take the loss = pull the parachute (with no emotional heartburn...warrior trader style)] >> Hope [Based on back-tested results: no time to live in the emotional dumps] >> Belief [In yourself and in your trading system: Bounce back as quickly as possible] >> Optimism [Trade your system] > > > > ...and start again.

NOTE: I think being on the offensive by taking the loss (like you would pull the chute to have a safe landing), would help to keep you from a hard emotional crash landing or let-down regarding your trade. It would also help to protect your emotional equity: VERY IMPORTANT!!! My 2 1/2 cents here .

Still to come... When, where and under what conditions to pull the chute.

May be easier said than done, but that's the goal: to leave the cycle in blue behind.

Here's to better trading in 2012 and beyond,

FX4
Attached Image
Trade what you see, not what you think or feel. Let the market come to you.
  • #48
  • Edited 1:30pm Jan 13, 2012 7:57am | Edited 1:30pm
Quoting FX4Newbies
Cycle of Market Emotions:

The Ideal Situation: Optimism [Trade your system] >> Excitement [System performing as expected] >> Thrill [Price reaches profit target] >> $$ Chi-Ching $$ [Pay yourself: close the trade] >>Euphoria [Good place to clear your emotional cache: guard against overconfidence] > > > > More Optimism [Trade your system]...and so the cycle should go , right traders?

And if not...

[Take the loss = pull the parachute (with no emotional heartburn...warrior trader style)] >> Hope [Based on back-tested results: no time to live in the emotional dumps] >> Belief [In yourself and in your trading system: Bounce back as quickly as possible] >> Optimism [Trade your system] > > > > ...and start again.
An additional comment:

If you actively manage the risk (by that I mean you do not use stops to take the loss for you), then your "taking the loss process" may be different. In that case, you would need to know when to use the options available to you on "your parachute": rescue or flip and when to take a loss to your foreign capital. Or you may just be a hard core trader and just take it when the price gets to your price level to exit: your number of pips per your risk management system. Not easy to do as we tend to rationalize our way out of taking the loss, but some traders trade Rambo style...just hard core to the bone.

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #49
  • Jan 13, 2012 3:47pm Jan 13, 2012 3:47pm
Mastering my emotions when trading has been hard and I still struggle with it every day to some extent or another. What has help we though is to have my trading plan infront of me when I am trading. But more so to actually read it before I begin, just to remind myself of my I should be doing. When I started out I would write my plan then never look at it again. Reading my plan ever day helps be lose my emotions and sick to a plan I have tested and trust more then what I think at a given moment.
So I say have your plan written, but also read it before you trade maybe even in the middle of your session if you are getting of track.

Regards
  • #50
  • Edited 11:21pm Jan 13, 2012 4:35pm | Edited 11:21pm
Quoting PsionMind
Mastering my emotions when trading has been hard and I still struggle with it every day to some extent or another. What has help we though is to have my trading plan infront of me when I am trading. But more so to actually read it before I begin, just to remind myself of my I should be doing. When I started out I would write my plan then never look at it again. Reading my plan ever day helps be lose my emotions and sick to a plan I have tested and trust more then what I think at a given moment.
So I say have your plan written, but also read it before...
That is a great strategy PsionMind. Do you read it aloud? A 40-year trading veteran reads a portion of his favourite trading psychology book every day before trading to keep that emotional trading mind in check. Some people make a Powerpoint slide show and play their "emotional trading plan" across their screen every day before beginning. It is the subtle programming that we don't see that is taking effect. Recording it in your own voice and playing it back is even more powerful. Glad that approach is helping you.

Keep pressing and thanks for posting,

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #51
  • Jan 14, 2012 2:18am Jan 14, 2012 2:18am
Quoting PsionMind
Mastering my emotions when trading has been hard and I still struggle with it every day to some extent or another. What has help we though is to have my trading plan infront of me when I am trading. But more so to actually read it before I begin, just to remind myself of my I should be doing.
An addition to this is to talk to yourself, out loud. As you are doing any analysis, just talk. This helps you to engage yourself as you run down your plan. "Is this level where I want to put my stop?" "No, it isn't what my plan calls for, the next level down is where it should be." "Then why do I want to put it here?" "Because I want to try to squeeze more out of this potential trade." "Stop being a wanker and put the damn stop where it belongs!"

You get the idea.
  • #52
  • Edited 5:13am Jan 14, 2012 4:49am | Edited 5:13am
Thanks FX for a great thread. Thought to pop in with an safe level-idea that I have been developing and used succesfully with my trading. It is an intraday approach and should fit atleast on M1, M5 and maybe on M15 timeframes.

It is based on two points. The time of the day you are trading and fundamentals in the currency pair or pairs you are trading. This should help with the decisions when to let it run and when to cut it short.

I have a profitable system around 75% wins. I have backtested it properly and I know on what times (and also days of the week) the price is more probable to make longer runs and when not to. I use this information to decide how many swings I trade if I open a position in a certain time of the day (with MM of course). I also check out days economic calendar beforehand to see if it is the statistical probabilities or news schedule that defines the most probable times for the price to make longer runs in a particular day. If theres a setup, but uncertainty in the "air", I may make a decision to let it run only 1 swing (but I continuously monitor the situation of course). If theres a good trending market and some nice news (like the french downgrade yesterday after NY open) I let the position run several swings and add into a position when the price retraces.

On the basis of this I eg. usually do not trade after 15:30 GMT to Frankfurt open unless theres some good news (like FOMC statement) in the calendar (depending from the result and market reaction to it).

So to put it short, my point is that we should know what times of day our system is likely to produce less amount of losses and bring the longer runs (and to utilise fundamental opportunities like yesterday). And to use this information to define safe levels to make the decisions when to cut it short and when to let it run. It takes a bit of work with backtesting, but is more than worth the work. This has also psychological results. If you know your systen like the contents of your pockets, it brings confidence to our system and helps to stick with the rules consistently. Also if you notice that you are taking second quesses with opening or closing positions, backtesting brings the confidency back because it gives you the confidency that the statistics are on you side in the long run.

Whistle
  • #53
  • Jan 14, 2012 5:10am Jan 14, 2012 5:10am
Quoting Whistlepips
Thanks FX for a great thread. Thought to pop in with an safe level-idea that I have been developing and used succesfully with my trading. It is an intraday approach and should fit atleast on M1, M5 and maybe on M15 timeframes.

It is based on two points. The time of the day you are trading and fundamentals in the currency pair or pairs you are trading. This should help with the decisions when to let it run and when to cut it short.

I have a profitable system around 75% wins. I have backtested it properly and I know on what times (and also days...
75% is awesome.
is this something you have develop yourself or found here on ff.com, because i doubt there is a 75% winning system here on ff.com
  • #54
  • Edited 5:38am Jan 14, 2012 5:21am | Edited 5:38am
Quoting bradu
75% is awesome.
is this something you have develop yourself or found here on ff.com, because i doubt there is a 75% winning system here on ff.com
Thanks Bradu. This discussion may be a bit of a sidetrack here related to the objectives in this thread, but I have developed it myself and utilised ff consistently during the development process. And I have to say that I disagree with you a bit. I think that there are many systems here on ff that you can tweak into these success rates eg. utilising the thoughts I just told in that previous reply. Check out eg. Udines invictus, which gives a strike rate beyond that as such. It takes a bit of work, but like I said, could be well worth the trouble. This is also a question of getting familiar with a system. To learn to know it, to learn its strengths and weaknesses and to learn to utilise it properly. I think that without this, you cant fully utilise any system. Otherwise forex trading would be easy and there would be 95% winners instead of losers
  • #55
  • Jan 14, 2012 7:00am Jan 14, 2012 7:00am
Quoting Dopey
An addition to this is to talk to yourself, out loud. As you are doing any analysis, just talk. This helps you to engage yourself as you run down your plan. "Is this level where I want to put my stop?" "No, it isn't what my plan calls for, the next level down is where it should be." "Then why do I want to put it here?" "Because I want to try to squeeze more out of this potential trade." "Stop being a wanker and put the damn stop where it belongs!"

You get the idea.
Dopey,

That is excellent!!! I have to say I may have done it once or twice, but I must make a conscious effort to do it as a habit. I think it is a very valuable and effective approach .

I think one of mine might be..."Don't be a chicken, hold that trade. You "know" this set-up should give you about 100 pips!!!"

Thanks for that,

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #56
  • Edited 7:24am Jan 14, 2012 7:09am | Edited 7:24am
Quoting Whistlepips
Thanks FX for a great thread. Thought to pop in with an safe level-idea that I have been developing and used succesfully with my trading. It is an intraday approach and should fit atleast on M1, M5 and maybe on M15 timeframes.

It is based on two points. The time of the day you are trading and fundamentals in the currency pair or pairs you are trading. This should help with the decisions when to let it run and when to cut it short.

I have a profitable system around 75% wins. I have backtested it properly and I know on what times (and also days...
Hi there Whistlepips,

Glad you like the thread. Thank you.

I think only those traders who have back-tested a system can truly understand the psychological benefits. I like your train of thought, especially how you decide to hold for more than one swing. Seems like you are very observant of all the factors that could affect price: a well-rounded and dedicated trader. That translates into Chi-Ching . I know I have been able to hold positions at times purely on the results of my back-testing.

Will be looking more closely to see if I can develop some consistency along the lines that you have mentioned. Do pay attention to the time of day...still working on fundies. Don't think my approach there is as fine-tuned as yours might be, but I'll get there or somewhere close .


Take care and thanks again,

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #57
  • Jan 14, 2012 7:20am Jan 14, 2012 7:20am
Quoting Whistlepips
Thanks Bradu. This discussion may be a bit of a sidetrack here related to the objectives in this thread, but I have developed it myself and utilised ff consistently during the development process. And I have to say that I disagree with you a bit. I think that there are many systems here on ff that you can tweak into these success rates eg. utilising the thoughts I just told in that previous reply. Check out eg. Udines invictus, which gives a strike rate beyond that as such. It takes a bit of work, but like I said, could be well worth the trouble.[b]...
Thanks Whistlepips for considering the objectives of the thread, but I think a genuine question deserves a response at least. If it is too far off, or will take several posts back and forth, which would weaken the goal here or create a major diversion in the flow, then PMs might work better.

Just also wanted to agree that the trader does need to "learn and know their system intimately" to be more comfortable trading it. I think back-testing is one way to do that. Everybody's got to find what works for them. Some shoes just seem to fit better than others, and only you can tell when you put it on..."That's the one! I'll buy it."

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #58
  • Jan 14, 2012 7:21am Jan 14, 2012 7:21am
Quoting FX4Newbies
Hi there Whistlepips,

Glad you like the thread. Thank you.

I think only those traders who have back-tested a system can truly understand the psychological benefits. I like your train of thought, especially how you decide to hold for more than one swing. Seems like you are very observant of all the factors that could affect price: a well-rounded and dedicated trader. That translates into Chi-Ching . I know I have been able to hold positions at times purely on the results of my back-testing.

Will be looking more closely to see if I can develop...
Good luck. I know it pays to concentrate on fundies. I kind of see them as invisible "fences" for the price to advance. Same like SR-levels (and often just there!). If there is important news ahead, the price rarely makes significant moves before them or between them. Like the ECB rate decision on thursday. EU made some progress after rate announcement, but retraced back and made its significant move only after Draghis speech a little more than an hour
later = time to ride the trend if theres a setup confirmed.....
  • #59
  • Edited 8:01am Jan 14, 2012 7:31am | Edited 8:01am
Quoting Whistlepips
Good luck. I know it pays to concentrate on fundies. I kind of see them as invisible "fences" for the price to advance. Same like SR-levels (and often just there!). If there is important news ahead, the price rarely makes significant moves before them or between them. Like the ECB rate decision on thursday. EU made some progress after rate announcement, but retraced back and made its significant move only after Draghis speech a little more than an hour
later = time to ride the trend if theres a setup confirmed.....
Like your analogy of invisible "fences". I too have noticed the pause in the market just before major news, and yes, between several news announcements if they are scheduled close to each other. Had a situation some time ago...
Saw a bearish move setting up about 45 minutes before news. I could smell the short. Had made my profit target for that day, but thought I could just grab a few more (greed can sound like that) before the news. Well, they played their hand well that day! I got in short, then the fading dealer moves began. In a flash half of my day's profit was on the line, and my emotions were there. They kept price above the entry. News was about to hit, so I thought I'd hedge. News hit, they faded upward. Thought it would fly so I closed the short. Was up a few pips, then the real move came, which was the short. That is one trade I will NEVER forget. Know why? It was an emotionally painful way to end a successful trading day, but I learned first-hand how dealers psych traders out with their fading moves. Didn't know about their fading techniques then, but I do now. Oh, the price we pay to learn sometimes . I could have flipped, but I think I was in shock at how a simple attempt to grab a few more pips before the news, turned into a trading disaster.

FX4

P.S. For those who may not know...a fade is a move by the market in the opposite direction of the flow, or where they are intending to go. Call it a head-fake?

P.P.S. By the way, when I back-tested my results I did not pay attention to the news. I found that most times price would go where it was going anyway, after the impact of the news wore off. There were times when things turned the other way, but that might have been when the news was unexpected or the results were a total surprise.
Trade what you see, not what you think or feel. Let the market come to you.
  • #60
  • Jan 14, 2012 8:01am Jan 14, 2012 8:01am
Quoting FX4Newbies
Like your analogy of invisible "fences". I too have noticed the pause in the market just before major news. Had a situation some time ago...
Saw a bearish move setting up about 45 minutes before news. Had made my profit target for that day, but thought I could just grab a few more (greed can sound like that) before the news. Well, they played their hand well that day! I got in short, then the fading dealer moves began. In a flash half of my day's profit was on the line, and my emotions were there. They kept price above the entry. News...
Good points. I have noticed the same with news and because I often trade on M1 with tight stops, it really pays to mind the news despite they often continue with trend direction. There can be really nasty spikes especially if the news deviates much from the expected. A kind of a panic reaction on the market? Maybe not so much effect, when trading on larger TFs with larger stops (despite the really big news like NFP & rate decisions). Also noticed that atleast on M1 trends, fakes seem to occur especially after long & fast runs. A trend/consolidation pattern of a kind I think....
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