Trading Psychology

[Joules MM1]

With all the due respect little i can muster. You have to be kidding???

A **** system or **** MM creates ill effects in your Psychology - in your Mind & Body. You end up throwing your plan out the window on what punters often call 'undisciplined' trades. What is really happening is the start of the delusion that you're doing the right thing, that you are a trader, is being stripped away. Denial is giving way to reality. You stray from the ill fated plan you have set for yourself because you don't know that that plan is one that will ultimate be profitable. Every bad day chips away at your ego until you blow up in 1 of the 1000s of ways to blow up in this gig.

Those that are weak, silly, lazy or unable to get off their ar$e to actually do some real work on a real system fall on the psychology band wagon. Others set about doing some work, testing, practicing, simming, reviewing, developing etc.

Why is trading different to any other business, sport, career or life goal? People who spend the time correctly practicing the activity achive gains. Those that talk about the mystical talents of the elite defeating the odds end up making excuses about their own failures till the day they die.

kin oath !

 

[Gringotts Bank]

eg. My scan shows 20 high volume breakout stocks, all with very similar chart patterns. I can't afford to spread the risk over all 20 so I have to choose 1-5 of them, hopefully the ones that run hardest. I choose the number of trades, the position size and how and when to sell as if I was G. Soros. Method acting.

 

[SmellyTerror]

Slightly-backhanded defence of Van Tharp: I got the impression that he's just confused about what "psychology" means. He seems to think that anything in your head is psychology. So there's a system, and there's MM, but once it's in your head it's all "psychology".

Smart bloke in a lot of things, but labelling everything as "psychology" is pretty silly, and he should probably just stop using the word altogether. (That goes for a few other people, too. )
/shrug

Might have him wrong, it's been a while since I read his stuff, but that was the impression I got. Really, "it's 100% psychology" makes 0% sense any other way...

 

[Trembling Hand]

My scan shows 20 high volume breakout stocks, .........

I choose ........................................ as if I was G. Soros.

Well thats why you cannot make a cent trading...... a retail punters scan as if you where a market mover. No wonder you need some trading mystic to get you though.

 

[Trembling Hand]

Slightly-backhanded defence of Van Tharp: I got the impression that he's just confused about what "psychology" means. He seems to think that anything in your head is psychology. So there's a system, and there's MM, but once it's in your head it's all "psychology".

The funny thing is that if you do have some sort of Psychological problem whats the chance of some random dude with a website charging a sqillion dollars a year is going to be able to fix it?

Talk about the evils of the internet!!! LOL. :bananasmiirate::kiffer:

 

[Gringotts Bank]

Well "George" makes better decisions than "I" do, and "he" has made me some money of late. Maybe I could try trading as "Trembling Hand"? :iamwithst

 

[tech/a]

Well thats why you cannot make a cent trading...... a retail punters scan as if you where a market mover

My pea brain isn't wrapping around your Gist here T/H.
Care to expand?

 

[SmellyTerror]

Hey, if I redefine "psychology" to mean "cement", I can say that it's only psychology stopping my house from falling down.

If I redefine "psychology" to mean "everything you need to do to trade profitably", I can sell you my hand-waving as the Word of God.

To teach trading, you'd have to show you can trade. To teach psychology you only need to be able to talk out of your ****.

 

[Trembling Hand]

My pea brain isn't wrapping around your Gist here T/H.
Care to expand?

If you're channeling a market god who plays with billions, breaks governments and no doubt need to play contrary entry/exits then go about trading breakouts in penny dreafuls its hardly a Psychology meshing of minds.

 

[Trembling Hand]

To teach trading, you'd have to show you can trade. To teach psychology you only need to be able to talk out of your ****.

.

 

[tech/a]

If you're channeling a market god who plays with billions, breaks governments and no doubt need to play contrary entry/exits then go about trading breakouts in penny dreafuls its hardly a Psychology meshing of minds.

Got it

 

[Julia]

Julia

Discretionary trading that is profitable.
Setting a sequence of trades up which
you set out to trade profitably by winning
more than you lose on a consistent basis
is very difficult.
I do that with Discretionary Index Trading (futures).
To be honest my systems trading is far more long
term profitable than my discretionary.

Expectation is a far cry from setting up a trade
sequence to have positive expectancy.

Well, fine, Tech, but none of that addresses my question of what the glib phrase "Trading Psychology" actually means.

What I'm (apparently quite incompetently) attempting to get at is the sort of psychobabble nonsense that is rife across the internet, preying as it does on the inexperienced and vulnerable. So easy to waft over their heads suggestions that 'it all depends on your trading psychology.
Well, perhaps it does, but I don't know since I have no idea what this 'trading psychology' actually encompasses. Further, I suspect the purveyors of this mystical stuff have no idea either. Hence the lack of response to my question from Steve.

I have the perhaps naive belief that if you are attempting to sell your wares to others, then you should at the very least be prepared to explain and define exactly what those wares consist of. And that's before being prepared to offer proof of ability.

Sorry if I sound cranky, but I am pretty tired of all the nutty claims being made all over the place which are basically meaningless, but nonetheless suck in the vulnerable.

He wouldn't be the first to do so. Thats why Psycho books for retail traders sell so well.

Indeed. And to extend the principle, why bookstores have shelf upon shelf of 'self help' books containing every shonky bit of nonsense you could ever imagine, aimed at the gazillions of people who are dissatisfied with their lives and who naively believe there is some magic secret out there which, once they get it, will make them happy ever after.

Such nonsense.

eg. My scan shows 20 high volume breakout stocks, all with very similar chart patterns. I can't afford to spread the risk over all 20 so I have to choose 1-5 of them, hopefully the ones that run hardest. I choose the number of trades, the position size and how and when to sell as if I was G. Soros. Method acting.

Oh, I see. I suppose the very slight fact that you are not in fact G. Soros, and your approach would surely necessarily be substantially different, is irrelevant? Just so long as you believe you're a winner, huh?

Sorry, Gringott. I don't mean to be snide or critical. If whatever you're doing works for you, then that's great.

 

[kgee]

Geez you guys are pretty rough about the idea of trading psychology. While I don't prescibe to the idea that "trading psychology" is 100% attributable to profitable trading it's certainly important.
With gambling there's a phrase "to go full tilt" its when you start playing badly or wildly when losing ...chasing your losses....I'm sure a lot of people have some experience...if not personally then from seeing it occur.
The psychology goes something like its an "ego" thing and "no one likes losing" and apparrently it's quite natural...my thing is that if you read a book about it and you understand the problem won't you be more likley to close your position or walk away from the table?
And how can that be a bad thing?

 

[skyQuake]

The way i see it psych is just a multiplier. If your system/method makes money, trading psychology can help u avoid some emotional errors.

If your system is crap, psych won't help one bit. Too much time has been spent trying to master ur emotions and whatnot when backtesting was the correct thing to do.

 

[kgee]

The way i see it psych is just a multiplier. If your system/method makes money, trading psychology can help u avoid some emotional errors.

If your system is crap, psych won't help one bit. Too much time has been spent trying to master ur emotions and whatnot when backtesting was the correct thing to do.

I'm partially agreeable. Backtesting is invaluable.But lets look at another trading website and the "toot toot" phenomenon.
How many here have words of wisdom or counselling that could be offerred to these people? Be it called wisdom or psychology?

 

[tech/a]

Well, fine, Tech, but none of that addresses my question of what the glib phrase "Trading Psychology" actually means.

With no plan or a lose un proven method which you have no idea if its long term profitable---you will have psychological issues.These diminish or are completely eradicated when you do and your not trading outside your financial comfort zone.

As for STEVE
Disappointed he hasn't accepted the challenge of a discerning audience who are not content with being fed BURLY.
He has an opportunity to present his experiences and his background but has stepped aside very quickly.
In the real world with real $$s at $100/hr he is going to get people like me asking the questions I have.

Hes not going to add to his psychological make up by stepping away.

 

[Trembling Hand]

As for STEVE

Disappointed he hasn't accepted the challenge of a discerning audience who are not content with being fed BURLY.

Funny isn't it. After this,

19 years later, he argues that psychology now counts for 100% of trading success and I for one agree with him.

and this from his site,


You would think his full of ideas. Infact some of his claims make it sound like he has a very good handle on Psychology. A quick look a wiki,

Australia
The title 'psychologist' is restricted by law. Registration as a psychologist is governed by State and Territory Psychology Registration Board.[11] From July 1, 2010 psychologists must be registered with the Australian Psychology Board.[12]
The minimum requirements for registration as a psychologist is an Australian Psychology Accreditation Council (APAC) accredited four year bachelors degree majoring in psychology and either a two year masters program or two years of work supervised by a registered psychologist.[1]

Restrictions apply to all who want to use the title 'psychologist' in any form in all states and territories of Australia. However, the terms 'psychotherapist', 'social worker', and 'counselor' is currently self-regulated with several organizations campaigning for government regulation.[13]

I would say that his encroaching on some dangerous grounds throwing around the term "Psychology" and offering a paid service unless he has some real qualifications.

Do you Steve????

 

[Agentm]

we are all incredibly dumb, as this youtube piece clearly spells out.

we all behave the same and we all react similarly

laurie santos has done some amazing work in her research

enjoy

http://rstb.royalsocietypublishing.org/content/363/1511/3837.long

 

[awg]

Some questions if you dont mind.

in many occupations psychological screening tests can/are administered by trained psychologists.

The purpose of these tests is to identify the desired characteristics, but screen out the unnaceptable.

Examples include Executives and Military Personel, where they want to get hard men, but not psycopaths.

I would enquire whether your methods takes any measure to identify those that may not be suited to trading due to psychological traits ( or other reasons)?

do you believe that some people are not suited, or that all obstacles can be overcome?

(So far as I know, anyone can administer various psychological tests, provided they do not misrepresent their qualifications)

btw, I am not advocating any sort of testing and dont have a preconceived idea of what yr answer might be, if any. genuinely interested

 

[SmellyTerror]

There are enough different methods of trading that I think you could match a pretty huge variety of personalities into it somewhere - if only to fill the always-hiring "food for others" role.... :

But yeah, for me that's the only real role "psychology" has in trading: finding something you are capable of trading.

ie. something you are comfortable with, something you can understand, something you can stick to, and something that you can enjoy.

After that, all that matters is if you make money.