# Are you a loser?....Trading Psychology



## money tree (12 May 2006)

I saw the movie "two for the money" tonight. There was a scene where they went to a gamblers anonymous meeting and Pacino talked about how they were addicted not to the gambling, but the losing part. He said that subconsciously, they allow themselves to lose because it creates a rush. "you never feel more alive than that moment after you realise you lost"

This got me thinking. I wrote a paper on trading psychology and here is a relevant quote:

"Gambling is an addiction, caused by a mental illness. It is not a chemical dependency issue like drugs, smoking or alcohol, but rather one we can control if we so desire. Similar to chemical addictions, certain parts of the brain are stimulated when we gamble. When we win, we begin to think of the happiness that lies ahead. These positive thoughts release dopamine in the brain and adrenaline in the body, giving us a ‘buzz’. Our heart rate, blood pressure and breathing increase. The dopamine in the brain stimulates the regions that control mood and motivation. We feel very happy and very alive. When we lose, only adrenaline is released. Since we lack the dopamine effect in the brain, but still have the increased heart rate, blood pressure and breathing, this enhances a feeling of fear. It is a primitive instinct, common during a fight for survival. Think fast, react fast, and survive. The increased heart rate, blood pressure and breathing cause a large amount of oxygen to accelerate the normal brain activity, forcing the decision making process to be sped up. Neurons do not have time to ‘consult’ parts of the brain controlling logic and reason, and bypass them. This is the early stage of panic. Placed bets during this stage are seldom logical or rational, and a self-destructive cycle emerges."

I now feel that assessment may be incomplete. It seems there are two types of addicted gamblers. The first gets a rush from winning. The second gets a rush from losing. As stated, the chemical changes are different. But is it possible that some people actually subconsciously crave a loss? 

It is of course reasonable to assume that the gambler addicted to winning is driven by a positive, unacheiveable, unsustainable goal. He is a dopamine addict. He craves the adrenaline rush and associated vital signs, repeat:

"When we win, we begin to think of the happiness that lies ahead. These positive thoughts release dopamine in the brain and adrenaline in the body, giving us a ‘buzz’. Our heart rate, blood pressure and breathing increase. The dopamine in the brain stimulates the regions that control mood and motivation. We feel very happy and very alive."

Now compare this to a gambler addicted to losing. He is addicted to epinephrine (adrenaline). His drive comes from a subconscious need to feel something......anything. Dopamine is not his drug of choice. Perhaps he has become immune to it. repeat:

"When we lose, only adrenaline is released. Since we lack the dopamine effect in the brain, but still have the increased heart rate, blood pressure and breathing, this enhances a feeling of fear. Think fast, react fast, and survive. The increased heart rate, blood pressure and breathing cause a large amount of oxygen to accelerate the normal brain activity...."

Having been a gambler myself in the past, I have first hand experience. When I took a loss, my heart rate skyrocketed. I felt very overheated and my brow sweated. I was thinking 2x as fast as when I took a loss. I felt great discomfort and my life kind of flashed before my eyes. I shifted in my seat a lot. 

Did I feel alive? Very much so. 
Did it feel good? No way. 
Do I think I subconsciously crave a loss? stupid question. My conscious brain cant answer that.
Do I think I am a dopamine addict or an epinephrine addict? I dont know. Im not sure theres any way to tell. Maybe if I was playing blackjack and I hit on a 20, that might be a sign.
Was I wrong? Is gambling a chemical dependancy afterall? Can it really be controlled without corrective drugs? Or do we just learn to cope and suffer in silence?

So what does all this teach me?

It teaches me that I must remove emotion from trading completely. Learn not to celebrate a win, nor moarn a loss. Make entries and exits based on logic, not gut feel. Emotion is my enemy. Understand that adrenaline dissolves logic, leading to failure. Enter a trade only when there is a justifiable reason other than "Im bored" or "I need $$$". Set stops immediately and walk away. When in profit, dont sell unless you get a sell signal. 
For every $1 in paper profit, there are $2 in feared losses. This means, if you are up $1000, you primary fear is that this $1000 will fall to zero, when the odds are equal that this will increase to $2000. But we will exit a trade early, because the safe $1000 means more to us than the possible $2000. Trailing stops are ideal for this irrational problem.

There will be many people reading this who dont want to accept they have a gambling problem. Perhaps a few will realise they fit the definition of a "loser", and take steps to avoid failure. 

And if there were, would they have the courage to admit it as I have? or are we all super-traders living in the Caymans?


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## yogi-in-oz (12 May 2006)

*Re: Are you a loser?*



Hi folks,

It does not take a _(edited)_ psychologist to understand 
the emotions we experience as traders ..... forget the
chemical and clinical approach and actually FEEL the 
experience of a win or a loss, by ACTUALLY trading 
in REAL time, with REAL money.

Now, take REAL money out of the equation and paper trade,
then emotion is removed from trading, TOTALLY.

Therefore, the cause of trading emotions (greed and fear)
is totally dependent on the money at stake or to use a 
golden oldie from the sales manual ... "a customer's mind
is where his money is ....." 

This is why, those traders who start with "scared money"
(underfunded) will be stressed considerably more by 
the emotion of fear (of loss), than by other traders, who
simply use their "play money" in the markets and hence
even a total loss in any one trade, would not affect their
lifestyle, at all.

-----

Now, back to the question .....

Are YOU a loser, money tree?

Good question ..... but, the only way that we'll see the
answer to that is when you have taken the time and effort 
to show us your trading credentials ..... let's make it 
something easy ..... like entering the monthly competition
here, through to the end of 2006 ..... ???

happy days

  yogi


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## tech/a (13 May 2006)

*Re: Are you a loser?*

Yogi.

What is this with you needing to be a gun trader?
You need recognition?
Who gives a rats??

Competitions are purely fun.
IGO4IT is 600% in front of you---is he a better trader?

I have one of my methods traded live for the last 4 yrs--every trade--we have seen $30000 turned into $347000.
Am I a better trader than---You,IGO4IT,Joe Blow,George Bush????

*Why cant you simply present what you have without the necessity of "Look at me Im so clever and you are all trading novices compared to me attitude??"*


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## x2rider (13 May 2006)

*Re: Are you a loser?*

Maybe the Question is , "what makes a good trader  ' . Is it some one that wins all the time or someone that takes the loses, learns and moves on ? why is it that you never hear about all the times it just goes horribly wrong . ?

Or is it someone that has the ability to implement there own plan to succeed .? . If I place a trade and it fails and i go back and look at the reasons why . What am I looking for . A flaw in my plan  . Maybe the market sentiment has changed , Maybe just bad news in the market . 

 All I know is that sometimes    S**T happens   


 I don't trade for a living . At the moment I don't know enough and haven't been able to remove emotion from my trading to a level that I think will make me a good trader . But If the All blacks get beaten this year I will be an emotion outcast and then I will be able to trade

 Cheers Martin


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## ctp6360 (13 May 2006)

*Re: Are you a loser?*

Because one of the greatest human needs is the desire to feel important!


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## money tree (13 May 2006)

*Re: Are you a loser?*

what an appalling and egotistic response from yogi. It takes a certain kind of person to but the boot into someone when they are in confession. Perhaps you also go to A.A meetings and boast that you have never had a drink in your life? Do you heckle the people there when they talk about how they struggle to control their addictions? I didnt realise such small people existed. I wont stoop to your level and insult you as you deserve.

yeah, lets all be expert traders.......ON PAPER. That will solve everything.

"Are YOU a loser, money tree?"

Thats like going to the A.A meeting and when someone stands up and says "my names Dave and Im an alcoholic..." you jump up and say "wow....really? your an alco? dude.....you suck!" 

Dont you realise how that makes you look?

well perhaps you should ask someone from my chatroom if I am a "loser". From Thursday last week to Thursday just gone these 35 or so traders witnessed my FX live calls and trades resulting in a *200% increase to my account * in that small period. Have you EVER got that kind of performance? Not even over a year let alone a week?
Some of these people frequent this forum. Plus, I have a track record here at ASF. 100% success rate. All five forex calls I made resulted in massive wins. Do you have such a record? 

As for being a "wannabe psychologist", thats a label Im happy to have. I have recovered from both drug and gambling addictions in the past. Some would say that puts me in a unique position of experience. I was a "loser" trader for the first 4 years of my trading career, so I read as much as I could on psychology to overcome that, so Im probably the foremost expert here on what goes on in a traders mind. It sounds as though you dont have the faintest idea. Your level of arrogance suggests you have absolutely no control over your emotions. You insult our intelligence. 

I dont trade stocks anymore, because I was emotionally attached to those stocks ("dont fall in love with a stock"). I now trade forex, and its very difficult to form an emotional attachment to a currency pair. Secondly, my losses in stocks were mostly attributeable to brokerage and GST. That is, I broke even if you excluded those costs. Forex has no such costs. All of a sudden I find myself to be a GREAT trader. 

I overcame my trading demon. I recall tech/a saying he lost money for the first 6 years of his trading career. Are you trying to tell us you were a gun from day one?

Once again ASF has shown me its better to shut your mouth and contribute nothing, as nobody appreciates the time and effort some of us put into a post.


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## RichKid (13 May 2006)

*Re: Are you a loser?*



			
				yogi-in-oz said:
			
		

> Hi folks,
> 
> It does not take a _(edited)_ psychologist to understand
> the emotions we experience as traders .....
> ...



Yogi, 
I have just seen this post and while I could continue editing it to meet the code of conduct and posting guidelines on ASF I believe it is better for you to reflect on your remarks so that you don't make these sort of personal and unnecessary remarks. 90% of your post is fine, why did you have to insert the rest of it? Please, please keep the personal stuff out of it.


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## RichKid (13 May 2006)

*Re: Are you a loser?*



			
				money tree said:
			
		

> .......Once again ASF has shown me its better to shut your mouth and contribute nothing, as nobody appreciates the time and effort some of us put into a post.  .......




MT,
I'm sorry for not seeing this earlier, I will be keeping an eye on this thread and I do recall the earlier exchanges in the tipping comp thread involving yogi.
Thank you for your contributions, I for one appreciate it and find your posts very stimulating. I would agree that people need not agree with someone's comments but they should show some decorum when critiquing those views. 

I agree that you should be able to air your views without undue concern. 

Personal remarks of this nature will not be tolerated Yogi, do not make a mistake about that, there was no reason for it at all, just look at the first post, you were not baited or targeted. Courtesy to fellow members and the quality of this thread is more important than personal diatribes so keep it clean please.

MT I would appreciate it if you could show the restraint that others sometimes fail to show by not responding further to yogi or others who post in a similar vein. You can always pm me or Joe instead of retaliating, other members will note the high calibre of your conduct, restraint is a virtue. Although I may not have your respect rest assured that I try my utmost to be fair to all.

Yogi, I'm not biased against you but you really shouldn't instigate these undue personal attacks.

It's a shame this thread has been subverted.


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## RichKid (13 May 2006)

*Re: Are you a loser?*



			
				money tree said:
			
		

> ..............
> 
> So what does all this teach me?
> 
> ...




This is probably the best part of the post for me, knowing how to apply the psychological stuff to your trading plan and knowing why it's important. This can't be repeated enough imo and is often said in many different ways. It need not be a full blown gambling problem imo that hinders us but it could be very similar to it.


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## sails (13 May 2006)

*Re: Are you a loser?*

Money Tree, thank you for sharing so honestly.  I have my own emotive demons to deal with in trading as I'm sure many others do and it is this sort of honesty that helps us realise we are not alone.  

IMO, understanding strategies, techniques and having all the trading knowledge in the world is very little use unless the emotive demons are controlled.


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## 3 veiws of a secret (13 May 2006)

In the art of selling, its quite simple, just 2 things are involved -1.Emotion  & 2.Logic.
It's that simple. Whether you want to get a rush from being a loser or whatever, is really a non event for me personally. It's like, I win a quote and I'm euphoric for a few minutes, but then once settled down, I'm back to basics(ie like the drug addict,a cyclical state of affairs).
The disciplined factor is that EMOTION always wins, those who control emotions, and reach out to LOGIC are better traders (for me), it also helps to know markets such as  options,commodities and etc etc.
I for one struggle with emotions. 
Lastly if the losers get a rush for losing -then by virtue of this fact they are bad traders. As for classifying share traders as gamblers, all I can say there is no logic in gambling, it's all driven by emotions. 
If you want a flutter, go to the bookies,and in 2 mins flat your down, unlike the ASX, FTSE etc etc its only a loss when you sell at a loss. There's no future in GAMBLING. -BINGO!
PS: I haven't read all this thread, its pretty petty, and snap, crackle and pop psychology.


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## yogi-in-oz (13 May 2006)

*Re: Are you a loser?*



			
				money tree said:
			
		

> I dont trade stocks anymore, because I was emotionally attached to those stocks ("dont fall in love with a stock"). I now trade forex, and its very difficult to form an emotional attachment to a currency pair. Secondly, my losses in stocks were mostly attributeable to brokerage and GST. That is, I broke even if you excluded those costs. Forex has no such costs. All of a sudden I find myself to be a GREAT trader.






Hi folks,

So the gurus can't take a little heat .....lol ..... 

tech/a ..... nothing has changed, you are still behind us, 
despite the bucketing you gave us earlier this month .....
..... just get over it !~!

 ..... and with the track record you claim to have ... why 
shouldn't we expect you to be able to do that now,
on a regular and consistent basis ..... ???

Is something wrong with your system now ..... ???

-----

money tree ... your link is labeled:

"Positive Geared Share Investing Course" ..... correct???

So do you want to enlighten us on how you can 
give trading advice on shares, without actually
doing it yourself ..... profitably???

-----

"Secondly, my losses in stocks were mostly attributeable
to brokerage and GST. That is, I broke even if you excluded 
those costs."

..... this is a typical crutch of a poor trader ..... let's
get real here ..... anybody, who is trading with profit
margins skinny enough to be seriously affected by 
brokerage and GST, really DOES NOT have a profitable 
trading plan ..... do they???

happy days

  yogi

P.S. ... we ALL have our losers, that's just part of trading 



=====


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## krisbarry (13 May 2006)

I see a little squabble has broken out here....and the crowd yells out.... :jerry  :jerry  Punches are thrown and chairs go flying....  

This is great viewing boys and girls!


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## tech/a (13 May 2006)

Yogi.



> Is something wrong with your system now ..... ???




No still belting along,for serious money I prefer longterm and the method is based on the BT margin list (Bankers trust),its not for gaining high % in a month as the likes of competitions.

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=74;t=000029


With the ASF comp you get one shot,stock could rise 100% in the first week and be -20% by the months end,it doesnt reflect real trading.
Trading comps hold no risk other than ego deflation if your susceptable.
Every now and then you'll jag a runner,and thats what you have to look for.
You got one last month and may not get one like it in the next year.
Shouldnt you be in hibernation or nicking picnic baskets?


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## RichKid (13 May 2006)

Keep it on topic please, if it's not related to the thread topic then leave it alone. I don't want us revisiting the 'I'm doing better than you in the tipping comp' issue or related matters. Take any fisticuffs to another forum.


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## Mofra (13 May 2006)

*Re: Are you a loser?*



			
				money tree said:
			
		

> As for being a "wannabe psychologist", thats a label Im happy to have. I have recovered from both drug and gambling addictions in the past.



Congratulations. I have worked with/helped people who have had to oversome such addictions and I doubt anyone who has had contact with people struggling to overcome these would trivialise the effort required.



			
				money tree said:
			
		

> I dont trade stocks anymore, because I was emotionally attached to those stocks ("dont fall in love with a stock").



I Don't trade stocks ST or MT, and your reasoning resonates with my justifications for doing so. Most of my effort (ignoring my LT stock positions) goes into net-credit spreads (basically simple verticals) and occasionally a simple write. I've found there's definately no emotional attraction to a wasting asset - whichever side of the coin you're on.

Please don't assume that just because a few people find it is easier to rubbish the achievements of others that people like myself who generally just lurk & read without posting don't appreciate the time and effort it takes to put forward:

a. new ideas, and
b. admit to mistakes in the past

Cheers


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## yogi-in-oz (13 May 2006)

tech/a said:
			
		

> With the ASF comp you get one shot,stock could rise 100% in the first week and be -20% by the months end,it doesnt reflect real trading.
> Trading comps hold no risk other than ego deflation if your susceptable.
> Every now and then you'll jag a runner,and thats what you have to look for.
> You got one last month and may not get one like it in the next year.




...... what a load of absolute hoqwash, tech/a ..... !~!

There would seem to be many traders here, who have 
developed systems here that can pick stocks, making
them solid gains ...  month-in, month-out !~!

------

..... and FWIW, my own counselling work is with clients
addicted to opiates, helping them to rehabilitate from their 
addiction and  post-medical trauma ..... mostly people, that 
others have TOTALLY abandoned ..... !~! 


Bye now

 yogi


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## tech/a (13 May 2006)

> There would seem to be many traders here, who have
> developed systems here that can pick stocks, making
> them solid gains




There would *seem* to be 10-15% of traders who by whatever means every now and then find prospects that outperform-----

Keep at it Yogi and all the best in your entries into competitions,its obviously important to you.As a counsellor you'll be only too aware of your needs.

You have my and I'm sure everyone elses attention,your input is welcomed,so put aside your school boy bickering discuss whatever it is you wish to present to the board.


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## yogi-in-oz (13 May 2006)

tech/a said:
			
		

> ... put aside your school boy bickering discuss whatever it is you wish to present to the board.




..... oh, puhleeeeeze ...  !~!

Simply, if those people parading as trading gurus here 
can't come up with some reasonable answers to probing
questions, without being offended, then maybe they 
should try another line of work ... or declare bankruptcy ... 

happy days

  yogi


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## RichKid (13 May 2006)

yogi-in-oz said:
			
		

> ..... oh, puhleeeeeze ...  !~!
> 
> Simply, if those people parading as trading gurus here
> can't come up with some reasonable answers to probing
> ...




Yogi, what has that got to do with this thread? I really am surprised that you have gone on like this, going by my impression of you generally I really didn't think you'd do this type of thing.I thought you would understand the points I've tried to raise in relation to some of your remarks. 

*You'll be in the sin bin for two weeks if you do that again. No more warnings, I think that's reasonable as you need to cool down and reflect on what you want to contribute and how you go about it.*

I trust you will now return to the topic or create a new thread in which to discuss any other issues- without making unnecessary personal attacks or contravening the code of conduct or posting guidelines.


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## Julia (14 May 2006)

money tree said:
			
		

> I saw the movie "two for the money" tonight. There was a scene where they went to a gamblers anonymous meeting and Pacino talked about how they were addicted not to the gambling, but the losing part. He said that subconsciously, they allow themselves to lose because it creates a rush. "you never feel more alive than that moment after you realise you lost"
> 
> This got me thinking. I wrote a paper on trading psychology and here is a relevant quote:
> 
> ...




Yes, or alternatively the sense of panic induced by the surge of adrenaline can result in total confusion where any capacity to make decisions is removed.



			
				money tree said:
			
		

> Neurons do not have time to ‘consult’ parts of the brain controlling logic and reason, and bypass them. This is the early stage of panic. Placed bets during this stage are seldom logical or rational, and a self-destructive cycle emerges."
> 
> I now feel that assessment may be incomplete. It seems there are two types of addicted gamblers. The first gets a rush from winning. The second gets a rush from losing. As stated, the chemical changes are different. But is it possible that some people actually subconsciously crave a loss?




This is an interesting suggestion.  However, I find it difficult to align the pleasurable "rush"  which you quite reasonably suggest involves the release of dopamine, with the ghastly  sinking feeling which comes from fear, whatever its source.

Why would anyone, consciously or subconsciously, crave a loss?




			
				money tree said:
			
		

> It is of course reasonable to assume that the gambler addicted to winning is driven by a positive, unacheiveable, unsustainable goal. He is a dopamine addict. He craves the adrenaline rush and associated vital signs, repeat:
> 
> "When we win, we begin to think of the happiness that lies ahead. These positive thoughts release dopamine in the brain and adrenaline in the body, giving us a ‘buzz’. Our heart rate, blood pressure and breathing increase. The dopamine in the brain stimulates the regions that control mood and motivation. We feel very happy and very alive."
> 
> ...




No,  To draw the conclusion that, because you feel an adrenaline-activated sense of fear on losing means you therefore are addicted to losing sounds like faulty logic to me. Why can't it be as simple as the gambler persisting with losses simply in the eternal hope that the wins will outweigh the losses? 




			
				money tree said:
			
		

> Do I think I am a dopamine addict or an epinephrine addict? I dont know. Im not sure theres any way to tell. Maybe if I was playing blackjack and I hit on a 20, that might be a sign.
> Was I wrong? Is gambling a chemical dependancy afterall? Can it really be controlled without corrective drugs? Or do we just learn to cope and suffer in silence?




There have been some studies which have shown that anti-depressant medication has some effect in controlling various kinds of addictive behaviour.  My own experience of people with addictive disorders has been that they are often people who continually push the boundaries in most aspects of their lives.  Ordinary experiences just seem to be too dull for them, so they seek the extraordinary, via excessive gambling, experimentation with drugs, etc.  I'm not necessarily suggesting this applies to you, Moneytree.  It's just what I've noticed in people I've known.



			
				money tree said:
			
		

> So what does all this teach me?
> 
> It teaches me that I must remove emotion from trading completely. Learn not to celebrate a win, nor moarn a loss. Make entries and exits based on logic, not gut feel. Emotion is my enemy. Understand that adrenaline dissolves logic, leading to failure. Enter a trade only when there is a justifiable reason other than "Im bored" or "I need $$$". Set stops immediately and walk away. When in profit, dont sell unless you get a sell signal.
> For every $1 in paper profit, there are $2 in feared losses. This means, if you are up $1000, you primary fear is that this $1000 will fall to zero, when the odds are equal that this will increase to $2000. But we will exit a trade early, because the safe $1000 means more to us than the possible $2000. Trailing stops are ideal for this irrational problem.
> ...




Thank you for a thought-provoking and self disclosing post, Moneytree.  It's a really interesting topic.

Julia


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## happytrader (15 May 2006)

Here are some interesting and possibly useful tips.

The body does not lie.

The body also has a memory.

The need for safety is right up there with food, water and shelter.

Too much stress kills brain cells

Too much stress narrows focus

Emotion and logic don't meet

If you want to change a behaviour change the emotional state.

If you have ever felt powerless, ask yourself, where have I ever felt this feeling before?

That gut feeling is likely to be the fight or flight response kicking in as it gets ready to purge itself to conserve energy to respond. Its a protective response.

All useful stuff to a trader.

Cheers
Happytrader


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## chemist (16 May 2006)

money tree said:
			
		

> ...
> So what does all this teach me?
> 
> It teaches me that I must remove emotion from trading completely. Learn not to celebrate a win, nor moarn a loss. Make entries and exits based on logic, not gut feel. Emotion is my enemy. Understand that adrenaline dissolves logic, leading to failure. Enter a trade only when there is a justifiable reason other than "Im bored" or "I need $$$". Set stops immediately and walk away. When in profit, dont sell unless you get a sell signal. ...




Get a bot.

cheers,
Chemist


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## tech/a (16 May 2006)

chemist said:
			
		

> Get a bot.
> 
> cheers,
> Chemist




?????

Simply if its business its unemotional.


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## Happy Profits! (17 May 2006)

*Sigh, still trying to detach emotions from my decisions*

Hi *money tree*, please don't let a few knocks deter you from posting ...at least I myself don't intend to!

I've been 'lurking' in these forums for about 2 weeks now and your thread and the, er, first response was what finally prompted me to drag me lazy a$$* to register on the forum as a show of support to (constructive) posters. Yes, this is my first post...car'n, somebody, welcome me!   

Anyway, back onto relevance: I'm here because it is my firm belief that each trader's/investor's own psychology is what ultimately determines their success or failure in obtaining AND keeping profits (as it is in life, of course). With the proviso of course, that IQ is at least above double digits.

As for me, I've just recently blown a sizeable amount (to me) at the local casino...that's why I can relate so well to the quote below:



			
				money tree said:
			
		

> ....Having been a gambler myself in the past, I have first hand experience. When I took a loss, my heart rate skyrocketed. I felt very overheated and my brow sweated. I was thinking 2x as fast as when I took a loss. I felt great discomfort and my life kind of flashed before my eyes. I shifted in my seat a lot.
> 
> Did I feel alive? Very much so.
> Did it feel good? No way.
> ...




LOL, especially with BlackJack being my game of choice as well, I felt my heart palpitating even as I read the first part! Yup, very unpleasant feeling as you see that Basic Strategy isn't working and the (stupid) concept of doubling up to recoup loss(es) is rapidly bleeding you dry (curse you, Martindale..ale..ale...ale).

The thing is, I do lean towards *Julia's* post above ie. that one is not so much addicted to losing as to the eternal hope of winning. Hmm....semantics, I suppose, and certainly nothing that could be solved in a forum. Taking my own experience as an example, I've always certainly maintained that I've wished that from that first moment I put the chips on the box, that I would have lost *every* single round. Maybe it would have stopped me, maybe it wouldn't have. I'll never know. 

However, what happened was that from a $200 stake, I walked out of the casino three hours later $6978 up (I'm sure other gamblers remember their first ever substantial win, hence the factual dollar amount). Nothing but greed, audacious betting AND pure dumb luck. For the next few months, kept on winning and winning until at point, got up to around $25,000 in winnings (all from that one $200 stake). And then...yup, the doo-doo hit the fan...JUST kept losing and losing and losing until I'm now $26,000 in the red. $41,000 if you count the winnings :, which of course, us gamblers are wont to do just as we (foolishly) declare "Oh, it's not a loss, it's only a loan!".

Anyway, from that long-winded rant: my point is that IMHO, I think for almost every person/gambler that seems addicted to losing, there *MUST* have been a crucial win to have set off the chain of compulsive behaviour. That, is, to myself, I was not addicted to losing (I certainly don't enjoy the feeling) but was trying to recapture the long-gone win. However, to the croupiers who saw me every weekend, they must have thought, "Wow! This guy's a glutton for punishment. He must really be addicted to losing!" So, both you and *Julia* are right. 

Which brings me (clunkily) to trader psychology; IMHO, newbies (such as me) should be directed to the battlefield inside the mind before they ever even think of tackling the market. I've read most books I can get my hands on and sadly, most espouse indicators, PERs, Moving Averages etc. as the most important things to look out for but very few actually point out the emotional aspects of trading/investing.

Phew, a thank you and apology to those of you who made it thru this ramble. Unfortunately, I'll probably be back in these forums to harass people for advice (not financial ) & read the (mostly) informative and thought-provoking posts. Until next time, I wish you all the greatest health and happiness as your profits roll in and compound!

PS. Do any of you apply techniques such as CBT (Cognitive Behaviour Therapy) or NLP (Neuro-Linguistic Programming) to your everyday life and trading?

* Oops! Edited 'cos I didn't know you couldn't write ****


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## RichKid (17 May 2006)

*Re: Sigh, still trying to detach emotions from my decisions*



			
				Happy Profits! said:
			
		

> ..........
> 
> I've been 'lurking' in these forums for about 2 weeks now and your thread and the, er, first response was what finally prompted me to drag me lazy a$$* to register on the forum as a show of support to (constructive) posters. Yes, this is my first post...car'n, somebody, welcome me!   ........




Welcome to ASF Happy Profits!
Make yourself at home, looking forward to your posts, keep em coming...try Trading in the Zone by Douglas and Van Tharp's Trade your way to financial freedom or try to find a psychologist who has experience counselling traders.

All the best,
RichKid
moderator


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## Happy Profits! (17 May 2006)

Hi *RichKid*, thanks for the warm welcome ! Sorry to have taken you away from analysing more trades  !

Will do with the suggestions...oo-er, Seykota, Turtles, Wilson (Leon) et al. too much info, too little brain cells.

Go on, scoot, get back to your spreadsheets!


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## Julia (17 May 2006)

Hello Happy Profits,

Welcome, and thanks indeed for a really interesting post - not ramblings at all.

After I'd posted I continued to think about the whole question of how addictive behaviour starts, and I realised I've often seen it associated with other risk taking behaviours, i.e. driving very fast cars too fast.  Something to do with the craved stimulus of "living with that element of danger", always being on the edge.  Ordinariness without the repeated surge of adrenaline, whether combined  with the pleasurable endorphins, or just alone as fear, or at times even terror, just doesn't cut it for many of these personalities.

I don't know how much of this behaviour is genetic but it does seem to be self reinforcing unless successful intervention is obtained in the people I've known with these problems.

I don't know much about NLP but have seen some quite good results from cognitive behaviour therapy.

Sounds as though the share market might be a good place to avoid until some of the emotional stuff is controlled?

All the best and thanks for your interesting comments.

Julia


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## money tree (18 May 2006)

hi happy profits

thanks for your input/honesty.

I have a similar gambling story (I suppose we all do)

I developed a "system" for roulette.....which was fairly ingenious....but never foolproof. I would wait until a "dozen" failed to be hit 18x (you could tell just walking around by the LED screens). I then began betting on that dozen, using reversion to the mean and a variation of martingale for betting.....basicly it worked flawlessly for a while.

The first night I walked in with $400 and got up to $9400 by staying there 26 hours......you guessed it, didnt want to go home until I had $10k.

No prizes for guessing what happened next......

the 3rd dozen didnt come up. Thats the 25-36 lot. It continued to not come up a total of 45x

the croupier watched in amazement as I broke the house limits by betting in each number.

all of a sudden, I was more worried about going home having "lost" the 10k than I was about going home having "won" 1k. So I kept going until the original $400 went too.

pretty similar experience during the tech crash.....no doubt many here can relate?


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## bullmarket (18 May 2006)

money tree said:
			
		

> hi happy profits
> 
> ...............I developed a "system" for roulette.....which was fairly ingenious....but never foolproof. I would wait until a "dozen" failed to be hit 18x (you could tell just walking around by the LED screens). I then began betting on that dozen, using reversion to the mean and a variation of martingale for betting.....basicly it worked flawlessly for a while.
> 
> ...




my best advice to gamblers with a problem is............................

you've got to know when to hold em,
know when to fold em,
know when to walk away,
know when to run,
ya nevva count your money........................(I forgot the rest   )



cheers

bullmarket


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## makeorbreak (18 May 2006)

Hey Money Tree

I take it you experienced that at Sydney Casino. I find Star city Roulette incredible for gambling. 

I recommend you try Crown casino. Something about that place that betting the outside always works. I quadrupled on the weekend using the outside bets in 20 Minutes - paid for my whole trip!


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## RichKid (18 May 2006)

bullmarket said:
			
		

> my best advice to gamblers with a problem is............................
> 
> you've got to know when to hold em,
> know when to fold em,
> ...




That's a great song (The Gambler- Kenny Rogers) bm, here's the rest: 

....You got to know when to hold ’em, know when to fold ’em,
Know when to walk away and know when to run.
You never count your money when you’re sittin’ at the table.
There’ll be time enough for countin’ when the dealin’s done....
http://www.lyricsfreak.com/k/kenny+rogers/the+gambler_20077886.html


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## Julia (18 May 2006)

bullmarket said:
			
		

> my best advice to gamblers with a problem is............................
> 
> you've got to know when to hold em,
> know when to fold em,
> ...




Hello Bullmarket,

I'm sure you didn't mean to trivialise the difficulties of gambling addiction, but advising a compulsive gambler to do the above is about as useful as telling an alcoholic to just have one drink.

Regards

Julia


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## bullmarket (18 May 2006)

Hi Julia 

no    - I was only joshing but I think it would be a really good song for casino's to have playing on auto-loop as background music   

and thanks Richkid for the rest of the words   

cheers

bullmarket


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## happytrader (18 May 2006)

RichKid said:
			
		

> That's a great song (The Gambler- Kenny Rogers) bm, here's the rest:
> 
> ....You got to know when to hold ’em, know when to fold ’em,
> Know when to walk away and know when to run.
> ...




These  are the winning behaviours of those with a strong sense of self preservation. They will protect you in every facet of life. Wonderful habits.

The thing to remember about addictions is, just as anger is a covering emotion for fear, sadness and hurt, addictions also do the same thing. Cognitive behavioural therapy is the industry standard however, it can be very slow and costly. I've seen much higher success rates and faster results in afew sessions with other mind body therapies. 

Cheers
Happytrader


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## Knobby22 (18 May 2006)

I went up the border with some friends to play pokies and have a holiday.
It was the first time I ever played. 
Anyway within an hour I won the jackpot! So I said lets go to the dancefloor and I'll shout ****tails (how ridiculous, stupid US, its a mixed drink guys) ...anyway had a good night and went back to the motel at about 2:00am.

One of my friends didn't join me and stayed playing till 5:00am with his system.
Which of course lost him everything.

It seems to me that gamblers don't understand odds and believe in terms like reversion to mean and if a coin comes up heads three times it is more likely to come up tails next time. They usually have "systems" which displays their ignorance.

B.t.w, I have hardly played the pokies since. It is such a boring waste of time.


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## emma (18 May 2006)

Geez, I'm a loser to-day - but I guess I'm not alone - ah well there's always to-morrow - or is that the gambler's philosophy!!!


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## kgee (19 May 2006)

In regards to gambling I believe discipline is the key proponent to success
I have been sports betting for 3 years now coming out on top each year
I have found it a worthwhile endeavour and many of the techniques I have learn't from gambling crosses over into trading
ie.
-Research
-if your uncertain of somthing stay away from it
-conversely if your certain of somthing "hit it hard"
-use "play money" for speculations
-set limits
-and of course theres gut instinct

I have found discipline the hardest to master...after big wins its always too easy to take a cavalier approach and bet too much on roughies/specs

if you start taking losses take a break and when you come back start slow again

Well its worked so far...but it is a work in progress and is always been refined
but the good thing is I have my whole life to improve on it
and I spose that's the final ingredient-patience


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## Happy Profits! (21 May 2006)

Julia said:
			
		

> Hello Happy Profits,
> 
> Welcome, and thanks indeed for a really interesting post - not ramblings at all....
> 
> ...Sounds as though the share market might be a good place to avoid until some of the emotional stuff is controlled?




Hi *Julia*, ad thanks for the welcome! 

As I read that last sentence, a big wry grin  broke out across my face...LOL, words of wisdom indeed!

*money tree* -   oh.my.god. You have just recounted almost step by step what I did (up until recently). I started off with BJ, then thought I could "shake bad luck" by changing to a different game - i settled on 'Rapid Roulette', 'graduated' from betting on 50:50 odds to Dozens and then my next hare-brained plan was to look at which were the most frequently appearing no.s from the last 20 spins and just bet $100 on that number no more than 30 times. Figured even if I "had" to get the number on the last spin, would at least walk away with $500. 

Did do pretty well from it a number of times and then things got wonky - I decided to change no.s midway, lost track of number of bets etc. Because of this, or in conjunction with it, haemorraghed stacks of green notes. The last $9000 I lost, I was completely numb and had this zombie grin on as I was hoping and praying that my number wouln't come up. It didn't. I got up, thanked the croupier, and walked out of the casino. I wasn't upset as I usually had always been - in fact, I felt 'cleansed' and clean as the chilly night air blew gently across my face. 

That was about 3 months ago. I haven't put a single dollar on a BJ/Pontoon/Baccarat/Roulette table since. I'm hoping I stay that way. My only gambling now is on Lotto tix  and even that, I hope to stop eventually 'cos, honestly, those things are an even worse idea than hard-core gambling. The odds are astronomical and it's death by a thousand cuts. *NB*: The quotation marks refer to the human folly of trying to control what is essentially, uncontrollable. 

LOL, ahh...the 'round number' syndrome - the downfall of many a gambler! I can relate well... "$7709? Yuck! That's an odd number and it's ugly. It'll be a cinch to leave with a nice round 8K"...cue the House ghouls clasping their hands together in the Finger Pyramid of Evil..."Eggcelleent...Bwah hah hahah!"

*makeorbreak* - LOL! I don't think you should be recommending or encouraging *money tree* <says *H P!* as he runs away shrieking>

*happytrader* & *kgee* - yup, I think it's pretty hard  to argue that first and foremost, discipline (as in a STRICT & UNWAVERING adherence to a viable plan) is what stops massive and catastrophic damage, be it in gambling or trading/investing. 

Psychiatristry 101: addiction is a funny (not ha ha funny) and scary thing. Why do some people gulp down gallons of beer at occasional social events and have no problems the rest of the time whereas others can't even walk by the liquor stores years  after their last drink? It's a curious thing innit?

Personally, that's why I'm a teetotaller and have always declined a puff of anything offered by others - I don't trust myself. IMHO, unless 'broken' or cured or managed properly, the addictive trait just migrates to a different behaviour pattern. Case in point, for the last few weeks - I've been foregoing precious sleep by trying to perform a first round KO to Muhammad Ali on my Xbox  Yes, I know, immature, pathetic and no less stupid than gambling but at least my bank balance thanks me even as my panda eyes curse me! Oh, also, have recently been averaging 2 Maxibons a day.

NAyway, I've rambled long enough...just noticed this a 'Trading Strategies' thread and I'm deeply in breach of the topic!


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## happytrader (21 May 2006)

Hi Happy Profits

Interesting post. Actually that word discipline always elicits interesting responses from people. Try it and watch the body language or the over the top reaction, the down in the mouth or rebellious look etc. Obviously if that word can conjure up that sort of emotion it obviously holds all sorts of negative connotations. I prefer that word safely. 

Cheers
Happytrader


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## kgee (21 May 2006)

Just a footnote from my last post
If anybody is interested in addictions the movie "what the bleep do we know"
is a very interesting watch...personally the movie was a little too new age in its orientation for me to reccomend in whole; but it's interviews with scientist's is very engaging


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## Happy Profits! (24 May 2006)

*Yes, I am currently a loser*

Oh really, *kgee*? Thanks for that info...I had seen the ads in the papers but had always assumed that it was a docu re: physics/science. Guess the _alphas_ and the _betas_ on the posters threw me a red herring.



			
				happytrader said:
			
		

> ...Obviously if that word can conjure up that sort of emotion it obviously holds all sorts of negative connotations. I prefer that word safely..




Ditto. I for one don't have negative emotions towards disciplined people or the attainment/development of discipline. In fact, I'm full of admiration. It's just that...I don't have the discipline...to be disciplined...yet (sorry, can't find a better way to describe it).

Anyway, just making this post relevant to the thread - haha sob , I guess I am still a loser in trading psychology. Bought a zinc miner, nickel miner and an iron miner about a week and a half ago...RIGHT before the 'correction' (fingers crossed  ). Down about 48.5% so far & sliding.

Hope the rest of you have better stock-picking skills and/or damage-control skills


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## money tree (24 May 2006)

will be a fair few "losers" around by now after the market tanked.

Seems this thread was well timed. Hope it did somebody good......


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## money tree (20 July 2006)

*Re: Are you a loser?*



			
				money tree said:
			
		

> ...these 35 or so traders witnessed my FX live calls and trades resulting in a *200% increase to my account * in that small period.





make that 400% now.

 

poor me, Im such a loser


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## Wysiwyg (11 February 2008)

money tree said:


> So what does all this teach me?
> 
> It teaches me that I must remove emotion from trading completely. Learn not to celebrate a win, nor moarn a loss. Make entries and exits based on logic, not gut feel. Emotion is my enemy. Understand that adrenaline dissolves logic, leading to failure. Enter a trade only when there is a justifiable reason other than "Im bored" or "I need $$$". Set stops immediately and walk away. When in profit, dont sell unless you get a sell signal.



Firstly  .....  



> The nervous system of every living thing is but a bundle of predispositions to react in particular ways upon the contact of particular features of the environment.




If one is a normal? human being then emotion is the reaction to perception of events,circumstances etc.I agree that the reaction can be controlled after the emotion is felt or better still, pre-programmed for a neutral response to events/circumstances etc.

This is not easy though.We are taught to react to events/circumstances firstly by our parents and then by other people, even tv or cinema we come in contact with.These reactions (emotion) become ingrained,may run into hundreds, and can be triggered by similar events/circumstances in the future.

So unless one has an understanding of what triggers these emotions then one will keep reacting to the same trigger. Emotion is easily attached to money (especially loss) and everyday decisions are made emotionally involving money.

Contrarily,fear of loss and reaction to such is excellent for maintaining finances *if the perception is right*.

I`m off to see ol` mate Hindsight to see how my perception is.


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## Wysiwyg (17 July 2008)

From the present bear run i have learned alot more about the game and have some underlying blocks that sabotage my trading.These underlying saboteurs are very debilitating for me.Any similar experiences? 

1) I was taught not to be selfish or greedy so when it comes to taking profit I sell way to soon (that amount is enough) and miss a substantial section of the move.
2) I tend not to panic on bad news (plug and abandons, profit downgrades, lower expectations etc.) and while others are exiting i lag behind believing the news isn`t that bad and the stock will recover.Eventually exiting after the stock has declined even more. 
3) I feel when i buy a stock that i am right.I have done my homework and believe the company to have strong prospects.As the stock declines I still believe I`m right and that everyone is crazy selling out.So I hold.
4) Failing to act on the warning signs. 

These saboteurs are like fine filters of the input to my decision making.They filter out the reality of what is happening.

I give myself a C + :-  easily distracted and can do better.


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## MichaelD (18 July 2008)

Wysiwyg said:


> From the present bear run i have learned alot more about the game and have some underlying blocks that sabotage my trading.




Well recognised. Now - what are you doing about what you have discovered?


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## mr_delta (18 July 2008)

Wysiwyg said:


> From the present bear run i have learned alot more about the game and have some underlying blocks that sabotage my trading.These underlying saboteurs are very debilitating for me.Any similar experiences?
> 
> 1) I was taught not to be selfish or greedy so when it comes to taking profit I sell way to soon (that amount is enough) and miss a substantial section of the move.
> 2) I tend not to panic on bad news (plug and abandons, profit downgrades, lower expectations etc.) and while others are exiting i lag behind believing the news isn`t that bad and the stock will recover.Eventually exiting after the stock has declined even more.
> ...





Wysiwyg,

If I changed your name from this post and put in my name, it would still mean the same for me...it looked like I was reading a post by me (but I had not written that, you had)...I am totally freaked out with your post man....my exact sentiments...


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## Trader Paul (18 July 2008)

Hi Wysiwyg,

Some thoughts, that may help you to understand those filters, better ..... 

have a great weekend

   paul



=====  



Wysiwyg said:


> From the present bear run i have learned alot more about the game and have some underlying blocks that sabotage my trading.These underlying saboteurs are very debilitating for me.Any similar experiences?
> 
> 1) I was taught not to be selfish or greedy so when it comes to taking profit I sell way to soon (that amount is enough) and miss a substantial section of the move.
> 
> ...


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## Wysiwyg (19 July 2008)

MichaelD said:


> Well recognised. Now - what are you doing about what you have discovered?




Hi, as Paul pointed out it is mainly my ego thing in which I find it difficult to accept all trades that go against me.Presently reading Van Tharps Trade your way to Financial Freedom and there is a chapter devoted to `Setting your own Objectives` part 1 `Self Assessment`.I took the time to write down my answers to the questions (even that was a wrestle)  this is when I started digging into where I am going wrong.
Although there is a great deal of literature on share trading, how difficult is it to cut losses early and let winners run.Time to introduce some stringent guidelines and adhere to them.Stop loss ... no questions asked and no backchat.



Trader Paul said:


> Hi Wysiwyg,
> Some thoughts, that may help you to understand those filters, better .....
> have a great weekend
> paul
> ...




Thank you Paul.



mr_delta said:


> Wysiwyg,
> 
> If I changed your name from this post and put in my name, it would still mean the same for me...it looked like I was reading a post by me (but I had not written that, you had)...I am totally freaked out with your post man....my exact sentiments...




Writing reasons down was way better than having them spinning around upstairs.Time to make some changes, though discipline isn`t my middle name.


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## hangseng (19 July 2008)

*Re: Are you a loser?*



> =tech/a
> 
> I have one of my methods traded live for the last 4 yrs--every trade--we have seen $30000 turned into $347000





Are you a better trader than me? *Absolutely!*

I want your method   please 

I am still doing well considering market conditions, but nothing to that extent (yet).


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## chimp (20 July 2008)

Wysiwyg said:


> From the present bear run i have learned alot more about the game and have some underlying blocks that sabotage my trading.These underlying saboteurs are very debilitating for me.Any similar experiences?
> 
> 1) I was taught not to be selfish or greedy so when it comes to taking profit I sell way to soon (that amount is enough) and miss a substantial section of the move.
> 2) I tend not to panic on bad news (plug and abandons, profit downgrades, lower expectations etc.) and while others are exiting i lag behind believing the news isn`t that bad and the stock will recover.Eventually exiting after the stock has declined even more.
> ...




Hahaha Wysi, I completely relate to the points - very well summarised!
Indeed I've been in this market for 14 months now and experieced the small bears....needless to say. - I guess i have committed every one of them on your list. 

I often think if i was better discipline and sticked to the trading methods set up by others, perhaps I'd even make some money in the market.


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## tech/a (21 July 2008)

*Re: Are you a loser?*



hangseng said:


> I want your method   please





You or anyone else can have it.
It's all here fully disclosed and FREE.
http://www.thechartist.com.au/forum/ubbthreads.php?ubb=postlist&Board=53&page=1

You'll need to register and thats FREE.
Now $439,000


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## MichaelD (21 July 2008)

*Re: Are you a loser?*



tech/a said:


> You'll need to register




But I don't want to read all of that. That's too much work. I don't want to do the work. I just want the profits. I deserve the profits. The markets OWE me.


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## nizar (21 July 2008)

*Re: Are you a loser?*



MichaelD said:


> But I don't want to read all of that. That's too much work. I don't want to do the work. I just want the profits. I deserve the profits. The markets OWE me.




Haha reminds me of a mate of mine.

I was trying to inspire this guy to get involved in trading, so I told him the Turtle story and then about the book Curtis Faith released last year.
And he goes to me, so the EXACT system is in the book?
And Im like, yeah, all the details BUT keep in mind that they were trading in 1983 and as such the exact same system may not work as well as it once did.
And he turned back at me and said, well in that case, whats the point of reading the book then?! 

Too many people are in the same boat as my mate, after a free ride.


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## Wysiwyg (21 July 2008)

*Re: Are you a loser?*

I think you under done yourself tech/a.A $30000 purchase @ 60c of PDN (probably could have got them for less) would have been 50000 shares.At the top or thereabouts you would have raked the kitty at over $500,000.Bull runs are great aren`t they???



tech/a said:


> Another pullback opportunity(Missed by myself)


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## tech/a (22 July 2008)

Yes

Have always found hindsite analysis the most profitable.


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