barney said:
Good advice as always Mag. I haven't got onto any of the phsyc books as yet, but certainly will, as I agree that it is important. I still remember that sick feeling of staring down the barrell of a multi (actually more like Mega) thousands of $ loss on one trade, and pressing the sell button. Initially it was a relief to "get out", but the remorse sets in quickly when you realise you just wasted about 10 years of your life savings virtually overnight. Thats when you realise what the phsycology of trading pressure can do to you. I admit to stupidity for getting in the position in the first place, but it is important for new players to learn how to cope with a pressure/losing situation before actually getting into the situation in the first place (and have steps in place to minimise that loss.) Thats why education, including chart analysis is important ............. building confidence in the way we trade. On basic knowledge of trading I reckon I'm about 20% of the way there, but from a phsyc point of view (being in control of my trading strategies and sticking to them no matter what) I reckon I'm about 2%
Its interesting that even through the pages of a forum you can tell how much more "relaxed" lads like youself and Tech are in your trading approach, whereas someone like me who is really not confident in my approach just yet, still has to battle with every decision ..... (but improving!!) All the best, Barney
PS Hey Snake thanks for the Japanese! Took me a while to decifer it cause I don't actually speak J. My daughter speaks a little. Its an interesting language/culture. Suki desu
Hello barney,
Let me repeat again the most important lesson I have learned about trading. Above all other aspects, your own psychology is paramount, even in my view above chart analysis and system approach.
I’ll say that again just in case you missed it - YOUR OWN PSYCHOLOGY IS PARAMOUNT.
From what I see you are investing a disproportionate amount of time (reads unbalanced) into analysis and system approaches over psychology. In my view this should be redressed if not reversed. Les posted a link to “Phantom of the Pits” – this is a great read. I have also suggested “Trading in the Zone” by Mark Douglas.
I have read a lot of books on the subject, and Douglas stands out head and shoulders above the rest in my view. It is the cornerstone of my success and ability to trade. I believe without it I would not be able to trade. Strong words, which I cannot overemphasise this point. It is THE point. In your case, bearing such deep mental scars, it is likely to be of even greater importance. Please read that line again.
barney, why are you resisting what needs to be done? You are, you know – resisting (on some deep dark subliminal level). I believe that most traders fail because they subconsciously sabotage themselves. They set themselves up to fail without realising it. Douglas addresses this. Success requires that you do what needs to be done to achieve your objective. Do you have the courage to really succeed or not?
You are frantically focussing on minor indicators, when I keep telling you to just learn to read the chart. Forget the moving averages, RSI, stochastics, oscillators, Bollinger bands, etc, etc, until you can learn to read a chart. The objective is to determine the trend, then what part of the trend the underlying is in (beginning, middle or terminal phase), then when to enter, and when to exit. Easier said than done. Once you realise that a significant element in this pursuit is about filtering your psychological bias, you will fare much better.
Just learn to read a chart without the gizmos first. In my view, there are very few people who know how to really use these effectively (people like tech for instance have pioneered a system and refined it – reads input of effective effort), and they have spent years working out how to use them.
In my view using indicators too early to the exclusion of learning how to read a chart obscures the process of perceiving the nature of trends. Look at tech’s recent charts, he’s essentially using straight bar chart and volume, and interpretation based on the bars and the volume. It is great T/A in my view, you can learn a lot from this. Try to understand what he is trying to tell you.
Why not try just looking at the chart without the indicators for a while and focus on the bars and volume. If you want to learn more, just ask the right questions, and start looking in the right places. Let your imagination do the work. Think of it like learning how to play music by ear. Really listen to the music, don’t just read it from the stave. You can hear when a note is wrong. You know how it feels when there is harmony. When you play, remember the joy of each phrase in the piece… Trading should be like that -Inspirational music. That can be your goal if you want it. Think about it.
Regards
Magdoran