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Trading psychology

  • #1
  • First Post: Dec 1, 2014 9:12am Dec 1, 2014 9:12am
Hello dear traders
This subject is to add thoughts about how to reach a balanced pschology that act on your behaviour and kep it positive so you can take rigth actions in market aiming the reduce of your loss and increasing your profits
I will be adding tips to it
First lets understand a little about human general pschology .Dr.sigmund freud( Austrian neurologist ) known as father of psychoanalysis a therory that describes that and it will help us to understand our selfs while we are trading and act in a way to keep a positive trading attuide PTA.
Dr.freud said that human is a hostile sexual driven creature .
Now he have a complete theory any one can have a look at by googling it .
What is important fo us is to use his theroy to understand how we think and act with this market
We need a PTA positive trading attuide all the time to win this market and that is related to our psyhcology which comes from our ideas and thinking .
Every one pass many stages in his life that at the end develop his way of learning evaluating and making judgments
We all share a common theory i believe Dr.frued described very well.
The first act of a new borned child is crying which it can be described as a defensive act so actually we are hostile because we are always taking a defensive mode and if we looked deep in our trading we will see that we deal with trading as a hostile action needed enviroment and that what really waste and consume our energy to a degree that make us loss the PTA factor which rule our end trading results .
Now what other ideas (aquired and wrong ideas that increase our hostile thinking which part of it is naturally that leads to a weak PTA that rule our end trading results ETR.
In next tips i will try to describe more ideas hostile ideas which could control our PTA
All have a nice day
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  • #2
  • Dec 1, 2014 9:16am Dec 1, 2014 9:16am
Any new ideas tips experience thoughts can be added by you dear readers thank you so much for that
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  • #3
  • Dec 1, 2014 4:15pm Dec 1, 2014 4:15pm
I'm a fan of psychology when it comes to trading (and fan of profits as well hehe).

What I figured out after 6 years of trading mostly demo (tried almost every market) is that thoughts are virus running in our minds preventing us to stay in present moment which is key to stay positive optimistic etc.
So sharing theories, thoughts and analyzing stuff is not that beneficial to stay in positive trading attitude.

There is a saying "life is a game" and it's spot on! So if life is a game why should we not treat trading as a game? After all those fancy charts and analysis trading is still just a price betting.

So treating it as a game keeps my PTA up
  • #4
  • Dec 2, 2014 3:25am Dec 2, 2014 3:25am
I wrote some trading psychology articles here: http://www.fxpep.com/category/tradin...logy-articles/

I really believe that patience is the key to disciplined trading. Let me quote Reminiscences of a Stock Operator:

"It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon"
Follow me on twitter @FxLester
  • #5
  • Dec 2, 2014 4:19am Dec 2, 2014 4:19am
Here is a mental exercise I started using a while ago

Learn as much as you can about each of the major cognitive biases: Confirmation Bias, The Correspondence Bias, Self-Serving bias, Hindsight Bias, Belief Bias, Recency Bias, Bandwagon bias, Sunk Costs, Loss aversion and the Law of Small Numbers

One by one, think of a situation you have been in - a real-world situation, not a trading one - where your thinking and decision making have been influenced by that bias. How did it change your thinking? Is there a chance your thought process might have had a different outcome if you were operating on pure logic? Think hard, this is not an easy exercise - Most people are completely oblivious of these logical flaws, or can only see them in others.

If you can't think of any examples, you probably have an ego issue - every single one of us suffers from these biases, every single day.

If you want to be a successful trader it probably isn't necessary to overcome or eliminate these biases from your psyche - I'm not sure it's even possible - but I think you do need to be aware of them, even if only in hindsight. IMO you need to accept they affect you as much as anyone else, and you need to be capable of identifying situations where you have been influenced by them.

This is very difficult to do accurately and takes a lot of practice, but if you can do it you should have a big edge on the crowd.
si hoc legere scis nimium eruditionis habes
  • #6
  • Dec 2, 2014 4:56am Dec 2, 2014 4:56am
Interesting thread. Do you think the psychological aspect of trading comes from an uncertainty in the reliability of your trading strategy? i.e. 1 trader may experience 10 losses in a row without feeling any discomfort, because he experienced the same losing streak on a few occasions during a substantial back test, and that this was not abnormal so can remain calm and confident, knowing that statistically, the losses will be recovered. On the other hand a trader with no back testing of his strategy is likely to crumble on a losing streak as he has no stats to tell him what is an acceptable number of consecutive losses. Therefore does psychological aspect need to exist in trading?
  • #7
  • Dec 2, 2014 5:00am Dec 2, 2014 5:00am
A nice little article I read this morning may be might help someone. Fear of Trading how to tackle it cheers
"...Look for 5:1 RR. I can be wrong 8/10 time yet I'm not gonna lose" PTJ
  • #8
  • Dec 2, 2014 10:13am Dec 2, 2014 10:13am
Quoting Vitez
I'm a fan of psychology when it comes to trading (and fan of profits as well hehe). What I figured out after 6 years of trading mostly demo (tried almost every market) is that thoughts are virus running in our minds preventing us to stay in present moment which is key to stay positive optimistic etc. So sharing theories, thoughts and analyzing stuff is not that beneficial to stay in positive trading attitude. There is a saying "life is a game" and it's spot on! So if life is a game why should we not treat trading as a game? After all those fancy...
Hello dear sir
Dealing with trading as a game is an attuide that reflects what you have in your thoughts ideas and believe about trading it self i guess you had a nice child time so you carried your feelings of joy to your trading .i find it apositive attuide to some extent because you will have plenty of memories and ego that will help you sustaining a good positive trading attuide but it may effect your stratgies style and reduce your faith in learning more about trading from materials that are avaliable .i guess you dont need that at all as things seems to be as abgame .you will be good and market will not effect you if you loss you just lost a game but there still may be badbsideeffect of such an attuide like not sustaining or aquiring enough knowledge ,lack of trading purpose and eventally leaving the market after a while
You may also lack displince and your investment propbley can bebsome sort of equal possibilities output which makes you conservitave in your investment amount depending on your past trades results .
We all started trading with this stage anxious to win and satisfy our self ego .some get advanced and some dont depending on there results
They achieve .i dont advice to use such a thinking or way if you win your first trades you will invest more and may be loss bigger
If you loss from start you will stop sooner .you also will be face ideas and thoughts of inequalty in life and may be missjudge other descions in life by moving your equale possibilites judgment in to life events around you .betterbalways if you want to get involved in something to think about it very well as it is and will be a part of your personality gather required marterials to achive your goal
Thank you so much for your tips sir and wish you a good PTA always .



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  • #9
  • Dec 2, 2014 10:46am Dec 2, 2014 10:46am
Quoting FxLester
I wrote some trading psychology articles here: http://www.fxpep.com/category/tradin...logy-articles/ I really believe that patience is the key to disciplined trading. Let me quote Reminiscences of a Stock Operator: "It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying...
Hello sir
I believe you exposed the major thought most share and use as there driving ideas and thougths .
I just passed nearlly through all your article as i said to my fellow befor such a thinking will not get you advanced the rigth way it may preserve and keep your ego but it will not make you a better trader to achieve your goals .you even may suffer of lack of goal with such a thinking and as i said it may have other negative sideeffects in your life making you missjudge many things around you .games actually are not without a purpose it is a way of learning for childs and to grow confidence and self awarence .grown childs then look to games from different angles depending on what they believe so far and carry as there major personality existance and purpose thougths .
Some keep playing as a habit some loss interest and try to aquire more knowledge through other particpating mind methods like reading watching and so on .
Games are a way of learning also and there are various type of it actually it is the force that drive us to learn andb aquire that effect usd all time .
The major idea i want to reach about acting with trading as a game that it will make you less knowledged and may effect your judgment and life in a negative way .
Thank you sir
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  • #10
  • Dec 2, 2014 10:59am Dec 2, 2014 10:59am
Quoting numbnuts
Here is a mental exercise I started using a while ago Learn as much as you can about each of the major cognitive biases: Confirmation Bias, The Correspondence Bias, Self-Serving bias, Hindsight Bias, Belief Bias, Recency Bias, Bandwagon bias, Sunk Costs, Loss aversion and the Law of Small Numbers One by one, think of a situation you have been in - a real-world situation, not a trading one - where your thinking and decision making have been influenced by that bias. How did it change your thinking? Is there a chance your thought process might have...
Nice thoughts and exercise but i guess you need less effort to reach a goal in life there are always short cuts that make same reslut with less coast .
It really depends on your goals ,personality and circumstances effecting you .
If you decided to make trading as your proffision which a descion i dont advice to putting such an effort can turn out to great results by time giving that you also need other factors like materials needed for trading .
Thank you sir i will look and revise your post many times
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  • #11
  • Dec 2, 2014 11:41am Dec 2, 2014 11:41am
Quoting NaughtyPip
Interesting thread. Do you think the psychological aspect of trading comes from an uncertainty in the reliability of your trading strategy? i.e. 1 trader may experience 10 losses in a row without feeling any discomfort, because he experienced the same losing streak on a few occasions during a substantial back test, and that this was not abnormal so can remain calm and confident, knowing that statistically, the losses will be recovered. On the other hand a trader with no back testing of his strategy is likely to crumble on a losing streak as he has...
For me trading system is just a small part of your physcology in trading but why we look at it as a major factor because we look to the end result as major driving force internelly .
I am still trying to find my way also and i will keep this stage for a long time actually what send us back from profiting to lossing is that we change such a feeling that have achived our goals to some extent to a feeling that will be effected by our unanticepated non pleasent new results .
About the other question actions does have an effect so all are subjected to sideeffects from trading .
For me i think that there is a major concept that we are lacking that we dont factor is that your life style does effect your trading and goals
Also We are all not proffisionals trying to practice a proffision .trading is a proffision our ego make us look to it as a game or easy thing to practice to gain more easy benifitis at start then we get involved and try to reach something with it .sometimes i think we are just spoiled and this is our punishment .
About your example it depends on many aspects .your knowledge experiance and what you do except from a trade.
If you are sure of a trade result and then got wrong results ten times you will end panic and depressed and i am loughing now
So an approche to trade which depend on ideas and thoughts that cover and protect you at first from negative ideas consuming your energy and effort is so important .
Also if you win ten times in a row you will end with feelings that may have negative effect in your next trades .
Uncertiany is a part of our life and equilbrium it is a major force that effected and still effecting us .
From it i believe that human faith in higher or super force was borne
It isba major factor in our lifebas a whole andbwe should keep it in our mind as a variable and and fact that present .
For me confidence is a situation where you forget the uncertiany of things because of that i believe that confidence may be a
Negative missleading feeling that can end with unpleasent results .
I like and love to live with uncertiany more than be confident .
And i think it is a major factor that we should use as a defensive mechanisme in our trading to reach a positive trading attuide and descions
Thank you sir
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  • #12
  • Dec 2, 2014 11:50am Dec 2, 2014 11:50am
Quoting dustbin
A nice little article I read this morning may be might help someone. Fear of Trading how to tackle it cheers
Thank youbsir nice article trying to build confidence again as a major factor in trading which really hurts us and leads to negative results
Uncertiany is a major factoras i said befor and youbcan live with it because you are already living with it now who is certian of something 100%you try to walk carefull opeining ligth looking down because you are uncertian of hazards you may face if driving your car you protect your self by many ways and so on so uncertiany is a factor and major though and idea that we need to deal with in our trading and put as a rule .
Thank you for your replay
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  • #13
  • Dec 2, 2014 1:17pm Dec 2, 2014 1:17pm
Quoting orabi
Hello dear traders This subject is to add thoughts about how to reach a balanced pschology that act on your behaviour and kep it positive so you can take rigth actions in market aiming the reduce of your loss and increasing your profits I will be adding tips to it First lets understand a little about human general pschology .Dr.sigmund freud( Austrian neurologist ) known as father of psychoanalysis a therory that describes that and it will help us to understand our selfs while we are trading and act in a way to keep a positive trading attuide PTA....
Did you know?
Science cannot figure out the reason for laughing!
A trade should be based on an assumption based on facts
  • #14
  • Dec 2, 2014 1:28pm Dec 2, 2014 1:28pm
Quoting Mave
{quote} Did you know? Science cannot figure out the reason for laughing!
one day they will
Thank you
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  • #15
  • Dec 2, 2014 1:32pm Dec 2, 2014 1:32pm
Quoting orabi
{quote} one day they will Thank you
Do you think they are not really interested in laughing, the science people?
A trade should be based on an assumption based on facts
  • #16
  • Dec 2, 2014 2:51pm Dec 2, 2014 2:51pm
Quoting Mave
{quote} Do you think they are not really interested in laughing, the science people?
It is a mental behaviour .no one can escape it it is a must and it depends on your knoweldge and interest
I think it also related to your experiance and life style all people do laugh i think according to things they are intersted in and culuture ,attuide they are involved with
Have a nice day sir
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  • #17
  • Dec 2, 2014 3:13pm Dec 2, 2014 3:13pm
First idea and i have confirmed it to some extent .i reached after a while trading this market that there is no conspiracy behind it and all traders starting from central banks to smallest trader in volume dont and can not have a 100% vision of where price will go .yes some know orders and equity size in market some have dvanced ways to gather data that are vitale and can help make descions but as all share one idea that they want to win others money any one of them runing for his own self
Working for his own benifit and advantage plus market is monitered so therecan not be any chance of conspiracy theory as no one can do it
I think this is a block you should built your uncertiany with .no one is certian about where price will go fundementals do control but they can change also .
To some extent all are equal it is a fair market after all
This concept will help you with uncertiany of move bulid some confidence in steps you will follow to build your approche in trading and keep it in positive zone for a while .if you loss you will just blame the system you are using for trading or concepts you used for that trade .
It also will enhance your effort done to gather information materials that will help you in taking your trading descions and incease your
Communications with fellows that share your same interest .
After all community behaviour what move this market
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  • #18
  • Dec 3, 2014 8:19am Dec 3, 2014 8:19am
orabi please don't call me sir as it feels like you are kissing my ass

if you want to better connect with people don't write/talk that much. get out of your head and say what you really want to say.

as far as guessing about me you were right about discipline but wrong about all other stuff. I guess that you like to guess a lot

"life is a game" is a great motto to live by and because trading is so much smaller than life it should be treated the same. actually if you don't take it as a game you loose long term.
  • #19
  • Dec 4, 2014 12:35am Dec 4, 2014 12:35am
Quoting Vitez
orabi please don't call me sir as it feels like you are kissing my ass if you want to better connect with people don't write/talk that much. get out of your head and say what you really want to say. as far as guessing about me you were right about discipline but wrong about all other stuff. I guess that you like to guess a lot "life is a game" is a great motto to live by and because trading is so much smaller than life it should be treated the same. actually if you don't take it as a game you loose long term.
Hi sir
The word sir to show my respect to you and all other traders but culutures of people do control how they think about others and look in to there words meaning .i like to think so much and may be guess what is logical
About looking at life as a game as i said it will have unpleasent sideeffects in your trading and life .life is not a game it is much bigger than that .part of it is thinking gussing and hard work i guess you will not fly a plan if the pilot says i am flying your fligth as a game .you need respect displince and rigth guessing thinking depending on your rigth knowldge .we dont want to take this subject to other aspects that will not move us so much as i said your thoughs and ieas are what you are and guess what they control your acts .
Thank you for your replay
Have a nice day sir
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  • #20
  • Dec 5, 2014 2:15am Dec 5, 2014 2:15am
Quoting orabi
{quote} Hi sir The word sir to show my respect to you and all other traders but culutures of people do control how they think about others and look in to there words meaning .i like to think so much and may be guess what is logical About looking at life as a game as i said it will have unpleasent sideeffects in your trading and life .life is not a game it is much bigger than that .part of it is thinking gussing and hard work i guess you will not fly a plan if the pilot says i am flying your fligth as a game .you need respect displince and rigth...
orabi,

my 2 euros:

-stop analysing and future telling people you know squat about

-learn some English


Bonus tip: if you are intelligent that does not mean you are smart as well.
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