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How do you control fear and greed?

  • #21
  • Oct 20, 2014 10:45am Oct 20, 2014 10:45am
It is impossible to control greed, hope. or fear because a trade outcome is a random event.
Since it is not possible to know the outcome, you will suffer 1 of the three depending on the current status of the trade.
  • #22
  • Oct 20, 2014 10:55am Oct 20, 2014 10:55am
Quoting Fxism
How do you control fear and greed?
Through raw data Research, Development, Engineering, Testing, Optimization, careful Implementation and the reliance on empirical findings for all trading decisions both strategic and tactical. And, by trading within a Business and Revenue Model that sets historically appropriate expectations for revenue growth and draw-down such that fear, greed and emotion never impacts business operations, functions and protocols.

You fear the unknown. Research tells you everything you need to know about what is probable. Everything in trading begins with raw data Research. If you are not doing that kind of hard work, then there is a high degree of probability that you are not taking your trading seriously enough and thus both greed and fear rule the day for you.

Fear and greed are not the worst enemies to the trader. A total lack of respect for raw data Research is the worst enemy of the trader and always has been.
F-X-C-M | A Classic Retail Bucket Shop Scam Artist Who Manipulates Prices
  • #23
  • Oct 20, 2014 11:29am Oct 20, 2014 11:29am
Quoting iDoubleStoch
{quote} Through raw data Research, Development, Engineering, Testing, Optimization, careful Implementation and the reliance on empirical findings for all trading decisions both strategic and tactical. And, by trading within a Business and Revenue Model that sets historically appropriate expectations for revenue growth and draw-down such that fear, greed and emotion never impacts business operations, functions and protocols. You fear the unknown. Research tells you everything you need to know about what is probable. Everything in trading begins with...
There is no amount of raw data Research in the whole universe that can remove emotion from trading because the outcome of any trade is RANDOM
Hope this will save some people wasted years and years of research, when they could have used that time improving on a real job or spending time with friends and family.
  • #24
  • Oct 20, 2014 11:48am Oct 20, 2014 11:48am
Quoting Mingary
{quote} There is no amount of raw data Research in the whole universe that can remove emotion from trading because the outcome of any trade is RANDOM
Please explain then how can a HFT firm can have A SINGLE LOSING DAY IN 1238 (3.5 years).

Those computers must be masters of emotion by your theory.

http://www.businessinsider.com/virtu...ing-day-2014-3
  • #25
  • Oct 20, 2014 4:05pm Oct 20, 2014 4:05pm
By meditation, by knowing what you will do before you do. Imagine yourself trading and being profitable, without fear and greed, and with a lot of patience. See yourself and the market, and then see opportunities coming to you.

Alex
  • #26
  • Oct 21, 2014 1:59am Oct 21, 2014 1:59am
Quoting Adal
{quote} Please explain then how can a HFT firm can have A SINGLE LOSING DAY IN 1238 (3.5 years). Those computers must be masters of emotion by your theory. http://www.businessinsider.com/virtu...ing-day-2014-3
This can't be the whole story.. spinned for herd consumption.
Also, it means absolutely nothing to the retail trader.
  • #27
  • Oct 21, 2014 6:41pm Oct 21, 2014 6:41pm
Quoting Mingary
{quote} There is no amount of raw data Research in the whole universe that can remove emotion from trading because the outcome of any trade is RANDOM Hope this will save some people wasted years and years of research, when they could have used that time improving on a real job or spending time with friends and family.

About 27 million later, you finally tell me the secret to trading without fear. Gee. I should have listened to you 10 years ago. I'd probably be up 54 million by now.

It is not mere research that matters, but the right research that makes the difference. If you don't know how to conduct scientific research and data analysis (part of both my formal education and previous career background) then you can "research" the wrong things until you are blue in the face and it won't matter one bit. In depth, empirical research of quality tools is the hallmark of the consistent technical trader.

Your fears? That comes form the lack of empirical research of quality tools. I don't trade with fear. I trade with reasonable expectations based on the historicity of what I know to be true about the tools I use. There is a huge difference in doing that. I hope you find out why someday.
F-X-C-M | A Classic Retail Bucket Shop Scam Artist Who Manipulates Prices
  • #28
  • Oct 22, 2014 2:34am Oct 22, 2014 2:34am
Quoting iDoubleStoch
{quote} About 27 million later, you finally tell me the secret to trading without fear. Gee. I should have listened to you 10 years ago. I'd probably be up 54 million by now. It is not mere research that matters, but the right research that makes the difference. If you don't know how to conduct scientific research and data analysis (part of both my formal education and previous career background) then you can "research" the wrong things until you are blue in the face and it won't matter one bit. In depth, empirical research of quality tools...

You can say anything on a public forum. I gather the 27 million is in demo money?
Fundamentally, there are no "right things" to research that will ever provide that elusive edge, but it's fun trying.
  • #29
  • Oct 22, 2014 5:14am Oct 22, 2014 5:14am
About FEAR, I would like to say as we are human we have greatest emotion which hage huge impact on trading Fear. Fear to loss/being incorrect/losing money/other`s. but as we are trader, we must learn to be neutral. We shouldn`t be upset when loss also don`t be too happy when win trade. Just remain neutral.

About GREED: Greed change our way of thinking and just like fear we hold on until the market reserves on you. ``when we run out of trading capital our game is over``. We shouldn`t be worry, keep on trading and we can realize where set up stop loss & how to maximize profits by taking low risk
  • #30
  • Oct 22, 2014 11:52pm Oct 22, 2014 11:52pm
Quoting iDoubleStoch
{quote} Through raw data Research, Development, Engineering, Testing, Optimization, careful Implementation and the reliance on empirical findings for all trading decisions both strategic and tactical. And, by trading within a Business and Revenue Model that sets historically appropriate expectations for revenue growth and draw-down such that fear, greed and emotion never impacts business operations, functions and protocols. You fear the unknown. Research tells you everything you need to know about what is probable. Everything in trading begins with...

What do you mean by RAW data research? Looking at the charts? I am looking at the charts for hours every day, weekdays and weekends.
I am doing the hard work, the only thing is I am not sure I am doing the work smart.
  • #31
  • Oct 23, 2014 12:21am Oct 23, 2014 12:21am
Quoting Fxism
{quote} What do you mean by RAW data research? Looking at the charts? I am looking at the charts for hours every day, weekdays and weekends. I am doing the hard work, the only thing is I am not sure I am doing the work smart.
1) Develop a method that you believe in and that you have proven to work 70% of the time or higher by back testing or by trading a demo for at least 6 months.
2) Never trade more than 0.1 lot size per every $2000 in your account
3) counter trend trades stay 1-1 risk reward ratio, when going with the trend 1-2 or greater rr unless the trend is weakening or there are other extenuating circumstances
4) Map your trade, pending buy or sell line, your move to lock profit line, your take profit line, and your stop loss.
5) Set the trade up....turn off your screen and go about your day. Set it and forget it. Do not check the trade until your phone alerts you that you are at lock profit, stopped out, or at take profit.
6) Understand that is easy as this sounds, it will take you roughly 2 years to master this process and you will probably lose money in the short term.
7) If this shit was easy, everyone would be doing it.
8) Also if your current software does not allow you to do manage trades in this way, you need to upgrade, even if it costs you a little money to purchase MT4 EAs/indis/scripts, run a 24 hour server account, or pay a good programmer/service to help set things up for you.

Good luck with your FX journey.
  • #32
  • Oct 23, 2014 12:41am Oct 23, 2014 12:41am
How Do You Control Your Fear and Greed?

So much "to do" talk here about nothing! Geez!

Look here traders. You cannot simply eliminate fear or greed,....."resistance is futile" as the saying goes. What you can do is to simply, easily divert or re-channel emotions. Try doing this,....fear your greed. It is that simple. Direct your fear at your greed. Don't let it just meander all over the place and pop up "whenever" to give you a hard time. Give the "green light" to your fear, but only when it is prompted by your greed. For example, suppose price is going against you and you are incurring losses, and you greed kicks in to make you want to stay in the trade "so you won't lose by closing at a loss" and your fear is getting riled up over this! Pat your fear on the back and get the hell out of the trade! For another example, suppose price has hit a nice low or a nice high and your greed says "this is the bottom/top, so I should jump into the trade here!" And your fear gets riled up and tells you that you are an idiot to follow the advice of your greed. Pat your fear on the back and sit on your hands until you get your proper setup at the proper time.

You cannot eliminate, but you can change. We have all heard the saying that it is impossible to eliminate a bad habit, but it is easy - with a few weeks work at it - to change the habit into another one, one that is good. Same goes for fear and greed.

-tah
  • #33
  • Oct 23, 2014 12:48am Oct 23, 2014 12:48am
Talk about nothing..

Here is the advice

set your trade up...and forget about it.

Set it and forget it.
  • #34
  • Oct 23, 2014 1:23am Oct 23, 2014 1:23am
Quoting pipster1
Talk about nothing.. Here is the advice set your trade up...and forget about it. Set it and forget it.
Agree, i also have the same problem. mostly, i open the position and leave the computer.
however, it depends on what timeframe you trade.
  • #35
  • Oct 23, 2014 9:57am Oct 23, 2014 9:57am
Quoting georgeben
{quote} Agree, i also have the same problem. mostly, i open the position and leave the computer. however, it depends on what timeframe you trade.
Exactly - I am a long term trader so somewhere along the timeline I tend to screw up!

@traderathome Someone in this thread suggested I read Steenbarger's books. I did and the guy is spot on! I have to fear to screw up my trade - not to lose money. The fear is misplaced.

@georgeben I've been practicing it for the past few days. I will have to let it run a bit longer. I've been pretty lucky and all my trades are working out beautifully since all mighty $ is so strong. The question is can I forget about it when the markets get choppy. Maybe I can practice set and forget now and create a habit of it, now that would be nice

As Steenbarger advises: you have to change parts of yourself to do what comes unnaturally to be successful trader. So far my intuition worked really well for me my whole life and I learned how to trust it. It is time I do not trust it any longer when it comes to my trading. Holy moly, I just spelled out my problem!

Thank you all!
  • #36
  • Oct 23, 2014 12:46pm Oct 23, 2014 12:46pm
Quoting Fxism
{quote} Exactly - I am a long term trader so somewhere along the timeline I tend to screw up! @traderathome Someone in this thread suggested I read Steenbarger's books. I did and the guy is spot on! I have to fear to screw up my trade - not to lose money. The fear is misplaced. @georgeben I've been practicing it for the past few days. I will have to let it run a bit longer. I've been pretty lucky and all my trades are working out beautifully since all mighty $ is so strong. The question is can I forget about it when the markets get choppy. Maybe...
I'm a big fan of Brett Steenbarger. His book "Enhancing trader performance" is one of my favourite books. Which one(s) did you end up getting?

Personally, trading psychology was the last frontier of mine before I became profitable.
I wrote some psychology articles which you might find helpful here:
http://www.fxpep.com/category/tradin...logy-articles/

In terms of dealing with fear - I tried to identify what it was that I was fearful of. Fear of missing out meant I would take suboptimal setups. Fear of losses meant I would cut winners. I then tried to see what I could do to remedy these aspects.

e.g. back when I was still learning, fear of missing out used to really bug me when I would analyse a trade, then decide not to take it and then the pain of watching it rocket in my direction. It used to really bug me and could lead me in taking further suboptimal setups which then failed (over-trading, revenge trading). For me, rules are important which taught me patience and discipline.
Follow me on twitter @FxLester
  • #37
  • Oct 23, 2014 1:22pm Oct 23, 2014 1:22pm
Quoting Mingary
It is impossible to control greed, hope. or fear because a trade outcome is a random event. Since it is not possible to know the outcome, you will suffer 1 of the three depending on the current status of the trade.

A real estate agent nevers knows if a client is about to buy the house or not; is it a real problem?

You have written "suffer": Do you suffer when a trade position is open?
  • #38
  • Oct 23, 2014 1:45pm Oct 23, 2014 1:45pm
Quoting Unabletrader
{quote} A real estate agent nevers knows if a client is about to buy the house or not; is it a real problem? You have written "suffer": Do you suffer when a trade position is open?
yes,

like this

Attached Image


Is it not the same for everyone ?
  • #39
  • Oct 23, 2014 3:07pm Oct 23, 2014 3:07pm
Quoting grin
{quote} There is greater certainty about client buying a house. Usually, it is just the matter of finding the right one. Clients who came with unrealistic expectations will fall aside fairly early as they come to realize this and having no desire to waste their own time.
So?

As an agent, you can't be sure about the next client. Is it a problem? No, it's just the reality of business.

Quote
"Is it not the same for everyone ?"

Let's say no. :-(
  • #40
  • Oct 23, 2014 3:54pm Oct 23, 2014 3:54pm
Quoting FxLester
{quote} I'm a big fan of Brett Steenbarger. His book "Enhancing trader performance" is one of my favourite books. Which one(s) did you end up getting? Personally, trading psychology was the last frontier of mine before I became profitable. I wrote some psychology articles which you might find helpful here: http://www.fxpep.com/category/tradin...logy-articles/ In terms of dealing with fear - I tried to identify what it was that I was fearful of. Fear of missing out meant I would take suboptimal setups. Fear of losses meant I would...
I ordered The Psychology of Trading a while back but since it didn't talk about trading 100% of the time I never read it. Until now, and it is the best book I read on trading thus far. Sure how to trade books helped me a lot but I could learn that online as well in this forum alone - in hindsight of course. I ordered the other two books of his too but haven't had the time to go thru them yet - still working on the psychology of trading.

Thanks for your post I never articulated what fear of missing out means - taking suboptimal setups, duh! Though your fear is a bit different than mine, yet still means taking suboptimal setups. When I have a setup in mind I have no fear of triggering the trade, what messes with me is missing out on big moves when I see them occurring, like I always tend to think I need to be on this train, this one is such a winner it doesn't matter if it is not my setup - pure greed kicks in. It sounds even more horrible when I spell it out in writing here for everyone to see... Discipline, rules and patience - what parents didn't teach me markets will

Quoting pipster1
Talk about nothing.. Here is the advice set your trade up...and forget about it. Set it and forget it.
I've been doing that. I do my best trading while asleep Unfortunately my targets are days or even weeks away and since I am not a bear I can't hibernate for weeks at a time... Working on it though, thanks!

Quoting Mingary
{quote} yes, like this {image} Is it not the same for everyone ?
When I am in profit that's how I feel inside like the guy on your picture.
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