Linda Raschke was a great professional trader in her days in 1980’ around.
Think in terms of THE NEXT 100 TRADES.
When u think like that,
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FOMO becomes pointless
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you focus less on the outcome of 1 trade and can focus on execution
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you’re less affected by a losing streak
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you’re less affected by someone bragging about his/her short-term results
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I find this thread very useful for every trader. I think that trading psychology cannot be learnt in any trading school. It is something that each trader needs to learn for himself which can be quite long learning path
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It seems to me that it is better not to expect anything from trading at all. If you present the worst case scenario, then you will be very encouraged by the win. You will want to earn even more if everything turned out so easily. And in the end, you will lose money.
The best strategy is to come, place a couple of orders and leave.
You must always think in terms of probability. With probability,there are expectations of wins and losses. Considered, you have an edge, which comes with trading a good number of trades over a variety of market cycles.
Now, when you know the expectancy rate of your trading plan, you ll make peace with any wins and losses. Because if your expectancy is positive, you know in the long run you ll come out profitable.
In trading you can never predict the sequence of wins and losses. Make losses but losses within your trading plan.
Overall, you must have expectations.
Yes, it’s never easy. There is no instant gratification. Some take 3 years before they show some break even signs, some take 5 years, some take more. Some quit within an year.
But there is certain breed who persist, and make it.
But as always, there is the principle of 10000 hours if you want to be successful at anything. Roughly give or take 10 years. Well, for people who doesn’t have 10 years in their life, they are not worth making this a go.
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This is the reason ppl involve in revenge trading & blow-up their account.
Controlling Emotions is Not the Goal of Trading Psychology
Pick up a book or magazine article about trading psychology and you’re likely to find prescriptions for success based on controlling emotions and increasing discipline.
Yes, emotional arousal can interfere with performance, but does that mean that elite performance is a function of dampened emotions?
When you look at some of the greatest performers in sports–and in trading–you’ll find highly competitive individuals. They are quite emotional and don’t take well to losing. Lance Armstrong? Michael Jordan? Tiger Woods? Muhammad Ali? All were quite intense, emotional individuals who managed to channel their emotional drive into victory.
Conversely, I’ve encountered many well-balanced individuals who have sought success in trading. They don’t blow up, they follow rules faithfully, and they have no intense, competitive emotional flame burning within. I’ve never yet seen one go on to become successful.
Can anyone watch the really successful college basketball coaches–Coach K., Jim Boeheim, Bob Knight, Tom Izzo–and attribute their success to emotional restraint? Yes, there have been emotionally reserved winners–think John Wooden and Dean Smith–but one suspects their emotionality was that of a warm mentor, not that of a cold fish.
The important ingredient in success is not emotional dampening per se, but the enhancement of concentration and focus. That is what enables people to act with sustained purpose and stay rooted in their goals.
When we review the lives of great individuals across a variety of fields–the research of Dean Keith Simonton and K. Anders Ericsson stands out in this respect–what we find is that the greats have prodigious capacities for work. They are hugely productive. They sustain effort hours at a time, day after day, week after week, year after year.
Only the ability to regularly access “the zone”–that flow state of consciousness that comes from being wholly absorbed in an activity that captures our interests, skills, and talents–can account for the amazing dedication of the Olympic athlete, the great career scientist, or the chess grand master.
Indeed, such exemplary performers can use emotion to access the zone. Michael Jordan used to provoke players on opposing teams so that they would argue and fight back. That would arouse Jordan’s competitive instincts and elevate his game.
When we operate outside that “zone” and lose our focus, we are no longer activating that executive center of our brains–the frontal lobes–that control planning, judgment, and reasoning. Left with a weak executive center, we become like the person with Attention Deficit Disorder: prone to wandering attention, reduced self-control, and impulsive behavior.
That makes it look as though “emotion” and “lack of discipline” cause our trading problems.
In reality, however, these are the results of the problem; not the causes.
The goal of trading psychology is to build consciousness, not reduce emotion. The goal is to create regular access to the flow state of heightened learning and focus. Talking to a trading coach, in itself, won’t accomplish that; nor will well-intentioned efforts to calm oneself or take breaks from trading.
We can only build consciousness by working on consciousness. That is why I find meditation, heart rate and galvanic skin response biofeedback, self-hypnosis, and newer methods such as
hemoencephalography to be valuable tools for traders and emphasized their use in my book on the psychology of trading.
These methods don’t eliminate emotion; they build minds. If we can exercise for 30 min./day and build our cardiac fitness and our physiques, maybe–just maybe–a similar commitment could strengthen our abilities to operate within life’s “zone”.
Brett N. Steenbarger, Ph.D
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STOPS can never guarantee a profit but in the long run it ll protect you from uncomfortable damages.
Sensible stops are insurances to make sure you live to trade another day.
- Trading psychology 101
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Does this all mean we have to be in a zen state of mind while trading?
Will it not be a added advantage, if we can have a zen- a peaceful and relax state of mind- even when not trading.
In the end all man longs for mental peace.
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If you haven’t started, then taking action is more important than finding the best strategy.
If you’re already taking action, then ensuring you’re working on the right thing is more important than working harder.
Your effort sets your floor. Your strategy sets your ceiling.
-James Clear
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**why you need to trade small till you learn **
Having a big trading account doesn’t necessarily mean bigger profits. If you can’t successfully grow a smaller account, chances are more you ll blow the bigger account. Trade small till you learn.
If you are in a hurry, just ask yourdelf can you become a surgeon in few months! Or can you operate a live body after reading a few books or taking a course.
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Thanks for reminding us all that simple thing which really makes the difference in the trades in the end of the day. It’s really worth it, thanks for everything here. I do realise it’s all very bad and we need to continue like that later. I hope you do.
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successful trading requires knowing what not to trade, even if your instincts say differently. Your instincts may be right a couple of times, but your trading strategy will always beat your instincts in the longer run.
Trading psychology 101
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When your knowledge bank is filled and starts to overflow, your monetary bank starts filling up.
Trading psychology 101
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Do not interfere with your trade
Your responsibility is to get out of the way of your trade and follow the initial plan.
Let the stock do it’s job.
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Everything works in trading but not everytime
You can get the best chef’s knife, but can you produce a masterpiece dish. Many times, it’s not the number of screens or the platform that defines a successful trader.
The experience or the time you go through everyday seasons you to perfection. You can’t teach experience nor can you buy.
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