An interesting question....
- Thread starter lilduckling
- Start date
The only possible way that you could make this a valid experiment would be to prohibit constant scalping, options, etc, etc. Let's say you would be alloted x trades per month. As a result, you would only be allowed to enter when you thought you had the highest probability of losing. I also think you would have to prohibit unreasonably tight stop loss orders. In other words, you would have to prohibit all attempts to lose the $40k just on the vig alone. Now, this experiment would become a bit more interesting.
Where I you I would give a glance at how the mind works and how it builds itself.
Emotions come from sensing the market in three primary ways individually or, for some, collectively. The psychological demons you speak of are mostly connected to the sensory system and not the process of depleting capital. True, a person senses his balance sheet when he picks up the sheet of paper or glances at a screen, but this is just a snapshot of results.
Personally I have left five times the money you speak of on the table during one day's trading. I consider it a loss simply because it was there for the taking. As a relative thing, though, it was not anything that was anyhing more than an instructive effect.
You are pointing out an improtant consideration for traders. Most traders spend a good portion of their time learning to lose. They very thoroughly go through hignly refined repeated processes of losing over and over. They are very cognizant that they are goiung through step by step processes of depleting their capital by making the best effort they possibly can.
What you pose is a construct for looking at this repeatd process of losing. You make it a goal or objective that you think is the opposite of what earnest learners are going through who are not getting personal success.
These two examples are not opposite throughout it turns out. They only contain one set out of four sets of operations that are opposite. And that set which is operated one way or another (its opposite) is not an operation where the psychological factors are at play.
You point out with your examples the need that everyone has in being able to make money. This need is a tangible body of knowledge that forms the basis for getting decisions made that are correct. Neither the earnestly learning losing trader not the intentionally losing trader of your example have this tangible body of knowledge.
I think your response definitively answers the question posed, although no doubt this type of question will resurface on ET.
For me, a corollary of your response is that trading is not primarily psychological, if "psychological" is meant as referring to the emotions and the mind. The corollary is important because it is a buster of a super myth in the trading industry.
Trading is a process of mind involving distinct parts which you've elegantly laid out on ET. Within the process, the place where trading "demons" may pop up is in actuality quite transient but appears enduring to the stuck mind that loops back to the place without going through the entire process. As you point out, the stuck loop often involves perceiving the p&l part of the monitoring space as concluding a cycle.
A psychological demon is a boogeyman believed in by people who have not reached a sufficiency in their interaction with the market to answer the questions that pop up. A lot of stories are told by people and an entire industry of remedies to deal with the boogeyman is supported by them. Being able to answer questions that pop up is what allows a person to transition through the trading process. As you point out nicely, focusing on a person's earnestness to either make or lose money misses the mark.
We kidnap the author of this thread for asking head ache producing questions. We set his Ransom at 40 k. We take the 40 k we already have and blow it on chasing Google on it's way down to 50. Then we actually blow the money twice when no one turns up to pay the ransom. 
... Rennick out
... Rennick out
