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The Inner Game of Trading

  • #41
  • Nov 18, 2015 11:56pm Nov 18, 2015 11:56pm
Quoting skyway
IF you 'know' something is going to happen in the future, the psychological stress is much less........
The most insightful post in the thread so far -- IMHO -- trading anxiety is caused by uncertainty, and ultimately the the only real antidote for uncertainty is knowledge and experience.
  • #42
  • Nov 19, 2015 1:27am Nov 19, 2015 1:27am
Nice thread Alpha,

The traders who have been in the market for a long time, they feel and remember every pain of your words

Personally, I still bitten by ignoring my discipline and over-confidence and fear after 10 years of trading .

It doesn't matter how long have you been in the market, you will feel the pain at the end !


I only know one thing which is pure gold, this will not make you money but will stop from depositing again

" A night what you cannot sleep because of your positions, you will end up losing significant portion of your account "
  • #43
  • Nov 19, 2015 5:33am Nov 19, 2015 5:33am
Quoting hanover
{quote} The most insightful post in the thread so far -- IMHO -- trading anxiety is caused by uncertainty, and ultimately the the only real antidote for uncertainty is knowledge and experience.

True! Uncertainty is the root of the problem.
But in this game, (like in any competitive game) uncertainty is impossible to eliminate. Knowledge and experience can only help to reduce the level of uncertainty, but that's it....
The outcome of your trades depends on your actions only 50%. The other 50% come from the other market participants and their actions.
If you buy(for whatever reason), and the price goes up - congratulations! You ARE LUCKY! (Don't think that you are smart, you are not!)
And If you buy (for whatever reason), and the price goes down - you are WRONG!(your analysis/idea is incorrect)
And the ultimate truth - The harder you work, the luckier you will be.
-------------------------------
There is only one way to overcome the psychological problem created by uncertainty. But I'm not going to expand on this for now..... I'm only going to post my favourite quote regarding this problem:

"The unconscious dimension of you flows effortlessly and without friction. It arises when you can step into the realm of uncertainty, beyond what you know and commit to the fullest expression of your hidden potential by acknowledging your own vulnerability and being willing to surrender to the unknown so that the extraordinary may happen."
  • #44
  • Nov 19, 2015 5:39am Nov 19, 2015 5:39am
Quoting Subrina_FX
Nice thread Alpha, The traders who have been in the market for a long time, they feel and remember every pain of your words Personally, I still bitten by ignoring my discipline and over-confidence and fear after 10 years of trading . It doesn't matter how long have you been in the market, you will feel the pain at the end ! I only know one thing which is pure gold, this will not make you money but will stop from depositing again " A night what you cannot sleep because of your positions, you will end up losing...
Embrace the pain, and you will win this game.
  • #45
  • Nov 19, 2015 11:33am Nov 19, 2015 11:33am
This thread keeps getting better and better. AO many thanks for your insightful posts, eagerly waiting for the next one. Its a coincidence that few days ago I was reading about "doubling time" and today I read your well-explained post (with example) about exponential growth. Thanks again.
  • #46
  • Nov 19, 2015 12:03pm Nov 19, 2015 12:03pm
Quoting hanover
Um, no offense, but this doesn't appear to make sense. {quote} To whatever extent you're "lucky" when price moves in your favor, then it stands to reason that you're "unlucky" if it doesn't. If your analysis is "wrong" when price moves against you, then it must necessarily be "right" if price moves in your favor. In reality, it's more correct to say that your analysis either provides some kind of an edge, or it doesn't. {quote} An edge can come only from the consistent application of knowledge and skill. "Luck", by its very definition,...
Makes sense to me. Analysis has no bearing on the result. Therefore, if you lose, then your analysis was "wrong" and you were "unlucky". If you win, then your analysis was "right" and you are "lucky". One thing to keep in mind, your analysis may have a "mistake" that you are not aware of because you were "lucky" and failed to do further checking and analysis. Winning trades are completely outside of your control. There is nothing that can be done to guarantee a winning trade, it is outside of your control - winning trades are lucky. You can (usually) control how much you lose by controlling risk and using stop loss orders.

You way of approaching this would imply the absence of a buy signal is necessarily a sell signal.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #47
  • Nov 19, 2015 12:04pm Nov 19, 2015 12:04pm
"An edge can come only from the consistent application of knowledge and skill. "Luck", by its very definition, is something that is completely outside of your control. It can not be manufactured by any kind of work."

I agree with Hanover, Luck means you did the wrong analysis, placed the trade in the wrong direction yet got away with a profit.
A Bad Winning Trade, as mentioned on another thread. This will only give you false belief that you can get away with this again
in the future. If you did not learn from the error then it can be disastrous another time.

What is being overlooked here, is Patience. Discipline is all well & good but patience plays a part also.
Waiting for the highest probability set-up, Knowing the risk beforehand & not just after placing the trade.
Letting the profits run, building on your winning position & taking the time to document your results.

Luck is gambling terminology, seeking thrills, wishing & hoping.
It never gets easier, you just get better
  • #48
  • Nov 19, 2015 12:47pm Nov 19, 2015 12:47pm
Ok,.... "Luck" is just a word and Hanover deleted the post. Everyone stay focused. .... more important things here. Let's move on. Thanks
SPC * Swollen PocketZ Crew!
  • #49
  • Nov 19, 2015 1:33pm Nov 19, 2015 1:33pm
Quoting TooSlow
Analysis has no bearing on the result..........
You way of approaching this would imply the absence of a buy signal is necessarily a sell signal.
Analysis either provides an edge -- a net positive outcome over a series of trades -- or it doesn't.
If it does, then it contributes to the result of each trade, albeit on the basis of probability.
If it doesn't provide any kind of advantage, then why bother with it?

I didn't say that the absence of a buy signal is a sell signal. That would be, well, moronic.

Quoting JoeNY
Hanover deleted the post.
I deleted my post because I realized it could cause yet another pointless back-and-forth debate on semantics. But apparently not quickly enough, LOL
  • #50
  • Nov 19, 2015 1:45pm Nov 19, 2015 1:45pm
Quoting hanover
{quote} Analysis either provides an edge -- a net positive outcome over a series of trades -- or it doesn't. If it does, then it contributes to the result of each trade, albeit on the basis of probability. If it doesn't provide any kind of advantage, then why bother with it? I didn't say that the absence of a buy signal is a sell signal. That would be, well, moronic. {quote} I deleted my post because I realized it could cause yet another pointless back-and-forth debate on semantics. But apparently not quickly enough, LOL
It's all a game of words....
I meant luck more in the context of psychology and philosophy. Not math or probability..... we should make a difference between the two.
But no matter now you look at it, luck (good and bad) is VERY important factor in trading and it is integral part of any good trading plan.......I've already talked about this http://www.forexfactory.com/showthread.php?t=558453

Here is something interesting on the topic.
Attached File(s)
File Type: pdf The_Luck_Factor.pdf   142 KB | 1,068 downloads

Enjoy!
  • #51
  • Nov 19, 2015 1:53pm Nov 19, 2015 1:53pm
luck and probability;
if you take the spread off, trading worst possibility of win and loss is 50/50 , when gambling the best is 50/50
on the other hand, 95% of traders think they are analyzing but actually guessing/gambling. only 5% is capable of analyze the markets correctly
  • #52
  • Nov 19, 2015 2:14pm Nov 19, 2015 2:14pm
Quoting hanover
{quote} Analysis either provides an edge -- a net positive outcome over a series of trades -- or it doesn't. If it does, then it contributes to the result of each trade, albeit on the basis of probability. If it doesn't provide any kind of advantage, then why bother with it? I didn't say that the absence of a buy signal is a sell signal. That would be, well, moronic. {quote} I deleted my post because I realized it could cause yet another pointless back-and-forth debate on semantics. But apparently not quickly enough, LOL





If your analysis is "wrong" when price moves against you, then it must necessarily be "right" - hanover.


By substitution: If your analysis is "buy" when price moves against you, then it must necessarily be "sell"
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #53
  • Nov 19, 2015 3:01pm Nov 19, 2015 3:01pm
Quoting TooSlow
{quote} If your analysis is "wrong" when price moves against you, then it must necessarily be "right" - hanover. By substitution: If your analysis is "buy" when price moves against you, then it must necessarily be "sell"
does the broker coding your buy/sell buttons backwards count in any of this?
"Holy Grail" exists - accepting where is the first step.
  • #54
  • Nov 19, 2015 3:13pm Nov 19, 2015 3:13pm
Quoting VaBikePacker
{quote} does the broker coding your buy/sell buttons backwards count in any of this?
Sure it does.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #55
  • Nov 19, 2015 5:34pm Nov 19, 2015 5:34pm
The semantics debate aside, it must become clear now that there is a great divide in expectations where on one side traders hold the opinion that it's possible that price movement/ behaviour can be analysed on a sensible and logical basis, and the other side traders is of the opinion it can't be done or this ability is limited to a rather low extent.

Money management, psychology, luck. How large it plays in the trading process depends a lot on the way the trader perceive this possibility of the ability to analyse the market.

This makes me wonder how will this population distribution table look like?
  • #56
  • Nov 19, 2015 6:54pm Nov 19, 2015 6:54pm
Inserted Video
  • #57
  • Edited 7:20pm Nov 19, 2015 6:57pm | Edited 7:20pm
Good question Skyway!

It is clear that trading is not easy.

It is also clear that some people are able to reduce the level of difficulty involved through reasonable analysis of the external or market as well as the internal or the individual. Most students of trading such as Mark Douglas in his book the Disciplined Trader(1990) concludes that the biggest challenge is the trader gaining mastery of the self.

It is my observation that this same mastery is required in not just trading but all endeavor that one seek to excel in.

So mastering oneself simply makes it much easier to objectively analyse the market and shift the probability from 50/50 closer to 80/20 (in many cases even better).

In nature its called the survival of the fittest.

As far as market behaviour as a whole is concerned its clear that there are irrational moves on many occasions. However its is also clear that the market is driven mainly by the big boys, the market movers controlling about 95% of trades, who use highly skilled well trained and experienced professionals suitably managed.

They are therefore easily capable of following the dictates of the central banks thereby creating certain consistencies in price movement. So the key is to study the market makers as they move the price there are many patterns that can be studied of the various currencies. I can give you a case in point with ECB President giving the market makers cues to shift the Euro from 1.135 to its current level....Pattern tells us that it must hit 1.05 before eventually getting back between 1.12 and 1.15 Maybe by Jan/Feb 2016 barring any major global event.
  • #58
  • Nov 20, 2015 12:18am Nov 20, 2015 12:18am
it's rather simple:

100 % luck
100 % gambling
There is no edge
  • #59
  • Nov 20, 2015 4:53am Nov 20, 2015 4:53am
Quoting Mingary
it's rather simple: 100 % luck 100 % gambling There is no edge
Sure, you can look at trading this way.(if your objective is not to make money)
Gambling can be fun and exciting(if you can afford it)......It's also good for the market.
More gamblers = more volume
More volume = more competition between market makers so we get even tighter spread/commissions.
So in essence, more gamblers = more meat for the pro traders/hunters
  • #60
  • Nov 20, 2015 5:07am Nov 20, 2015 5:07am
Quoting Mingary
it's rather simple: 100 % luck 100 % gambling There is no edge
I like to think of it like:

Every trade is a coin flip. But the beauty of it is. We can choose where and when to flip the coin.


That's your edge, if that's what you want to call it.

Jeeze you can even choose how may times you want to flip it or what each flip is worth, how much you will lose on a heads when you choose tails and in relative terms how much you can potentially make when tails comes up.

What more do you want? Someone to flip the coin for you?

Enjoy it while it lasts
Time hides Nothing
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