An very detailed overview of trading psychology worth the read

risetothetop2021 said:
Before you read I have to know and please be honest. Do I have a gift to type and effortlessly stream my sentences together to forum tranquil harmony? I have zero education accept from other forums 4 years ago and stop trading 4 years ago. today is my first day doing anything whether it be research etc. about stocks. read this give me your honest opinion. remember your words will shape a human life's outlook on life itself. Please Transend me


All of this was typed by me with my own ideas


Trading Psychology refers to the mental and emotional state a person utilizes to dictate the outcome of a successful trade (Good/Positive psychology) vs a unsuccessful trade(Bad/Negative psychology). Alike normal psychology trading psychology is very much similar, taking into part individual character traits and behaviors that a person uses to make their trade.


( A good stock trader should have a professional psychologist once a week to lecture them about work related stress and fatigue, the impact of bad trades they might of made, how that impact is effecting their overall emotions and behaviors, and many much subjects. Having a professional psychologist gives you the benefit of insight to your unnoted patterns, actions, thoughts, feelings, emotional state, etc. Can help you make a decision if you need to go on a business retreat for a week instead of trading(while if you want you could spend that time trading online with fake currency as practice).


A business retreat is a trip to an exotic locations where you can unplug. No electronics etc. Your goal is to get your mind calmed down. You can develop techniques with your psychologist and strategies to utilize on your retreat. These are just some of the benefits of a personal psychologist.) Make friends with hope and regret stock trading is a situation where "too much hope can get a man killed in here".



Trading psychology is the emotional component of investor's decision making process which may help explain why some decisions appear more rational than others.


Fear and greed are emotions that you need to confront, exert your control over ether before they exert control over you. Take up Tai-Chi to learn how to control the flow of energy, and be one with yourself at any moment. Taking something like Tai-Chi gives you control of your body which transfers to control of your feelings/emotions which translates into a better trading psychology (positive trading psychology). Think of trading psychology as Heaven and Hell. Positive trading psychology is heaven(positive energy) negative trading psychology is hell (negative energy)


Try something I just thought of which is radical and groundbreaking. Try listening to music the entire tradinig session. Not just any music,"music to inspire creative people" "relax daily" "motivational music" "happy uplifting music". Music is truly a beautiful gift from God. So beautiful that I want to have sex with it after a date AND CALL music back!!!! But seriously music transcends you to a place in our current state or reality to a place where nothing can hurt you, nothing can break your resolve, nothing can break your will power, you will make it out more successful than before..


Affirmations- Affirmations are very important to any person period. When I am rich enough I am going to advocate that we test it in some "pilot" high schools with digital picture frames. This hopefully as I envision it will lead to an entire mandatory life skills class about how to deal with life in all its beautiful complexities. Its sometimes that the most complex of times, times where it all seems to fail and your on your knees screaming Abba Father and you just want to quit. But by some miracle you find the strength to get up, you thank God, and continue on your journey of life. That is what life is all about that paragraph right there those of you who understand it teach this to 1 person and change the world. Its like a rate of return 1% is better than 0% changing the world is no different 1%change from you might lead to the next apple or tesla lol. Try and do affirmations everyday actually know scratch that DO affirmations everyday as you are a winner with a never give up attitute. History is marked by failors. Athelets failing, inventors failing, buisness men failing, but it just takes that one moment that one success to make all those failures null and void.




Positive trading psychology- Here is an example of positive trading psychology. Today I am going to open strong with overwhelming confidence in any situation so called "life" wants to throw at me. I see my failures as challenges and challenges as lessons to be learned "life lessons". If I loose profit today I have to remember that this is normal infact it would be a sign of market instibility if I didn't loose profit sometimes. The stock market is like life sometimes you win sometimes you loose but you embrace everymoment and every oppertunitiy and you will be exhalted and transended to a higher pane of excistance beyond the cosmos. Some other postive trading psychology is nutriutional. What we eat plays a huge part in our mood, our confidence levels, our postive mindsets, our performance, our everything. Hire a nutritionalist and here the best part you can bill it as a buisness expense as its to help with your work performance so theres a forum of profit.


Negative trading psychology- Here is an example of negative trading psychology. I can't get over my losses yesterday how will I ever explain this to my spouse and if I lie to her I become lost and detached from her. Stock trading is becoming overwheling vs The stock market is overwheling my senses into pure undiscovered treasure. Which one would you rather be. We all have free will and choice for a reason. Make your choice now and stick to it. Never give up in life. Watch motivational music, motional speeches, tony robins, hell I'll even pay for 1 person next month to get a free tony robins course complelly on my dollar not yours. When you have destiny and discover it you become beyond happy all the time. It's like breathing for the soul
More...

Risetothetop2021, forget that mumbo jumbo psycho crap you usually read in most trading books.

To succeed as a trader you need:

1: A backtested system with CLEARLY defined trading rules.
2: Good money management rules (never lose more than 1 to 2% of your capital per trade).
3: discipline to follow rule 1 and 2.

That's it.
 
well I think my ideas abut a buisness retreat is something to look at. it gives you time to relax and rest up and get you out of a trading rote. also a personal psychologist if you cant handle some aspects of training due to maybee a personality disorder perhaps avoidant personality disorder could really impact a person
 
risetothetop2021 said:
Before you read I have to know and please be honest. Do I have a gift to type and effortlessly stream my sentences together to forum tranquil harmony? I have zero education accept from other forums 4 years ago and stop trading 4 years ago. today is my first day doing anything whether it be research etc. about stocks. read this give me your honest opinion. remember your words will shape a human life's outlook on life itself. Please Transend me


All of this was typed by me with my own ideas


Trading Psychology refers to the mental and emotional state a person utilizes to dictate the outcome of a successful trade (Good/Positive psychology) vs a unsuccessful trade(Bad/Negative psychology). Alike normal psychology trading psychology is very much similar, taking into part individual character traits and behaviors that a person uses to make their trade.


( A good stock trader should have a professional psychologist once a week to lecture them about work related stress and fatigue, the impact of bad trades they might of made, how that impact is effecting their overall emotions and behaviors, and many much subjects. Having a professional psychologist gives you the benefit of insight to your unnoted patterns, actions, thoughts, feelings, emotional state, etc. Can help you make a decision if you need to go on a business retreat for a week instead of trading(while if you want you could spend that time trading online with fake currency as practice).


A business retreat is a trip to an exotic locations where you can unplug. No electronics etc. Your goal is to get your mind calmed down. You can develop techniques with your psychologist and strategies to utilize on your retreat. These are just some of the benefits of a personal psychologist.) Make friends with hope and regret stock trading is a situation where "too much hope can get a man killed in here".



Trading psychology is the emotional component of investor's decision making process which may help explain why some decisions appear more rational than others.


Fear and greed are emotions that you need to confront, exert your control over ether before they exert control over you. Take up Tai-Chi to learn how to control the flow of energy, and be one with yourself at any moment. Taking something like Tai-Chi gives you control of your body which transfers to control of your feelings/emotions which translates into a better trading psychology (positive trading psychology). Think of trading psychology as Heaven and Hell. Positive trading psychology is heaven(positive energy) negative trading psychology is hell (negative energy)


Try something I just thought of which is radical and groundbreaking. Try listening to music the entire tradinig session. Not just any music,"music to inspire creative people" "relax daily" "motivational music" "happy uplifting music". Music is truly a beautiful gift from God. So beautiful that I want to have sex with it after a date AND CALL music back!!!! But seriously music transcends you to a place in our current state or reality to a place where nothing can hurt you, nothing can break your resolve, nothing can break your will power, you will make it out more successful than before..


Affirmations- Affirmations are very important to any person period. When I am rich enough I am going to advocate that we test it in some "pilot" high schools with digital picture frames. This hopefully as I envision it will lead to an entire mandatory life skills class about how to deal with life in all its beautiful complexities. Its sometimes that the most complex of times, times where it all seems to fail and your on your knees screaming Abba Father and you just want to quit. But by some miracle you find the strength to get up, you thank God, and continue on your journey of life. That is what life is all about that paragraph right there those of you who understand it teach this to 1 person and change the world. Its like a rate of return 1% is better than 0% changing the world is no different 1%change from you might lead to the next apple or tesla lol. Try and do affirmations everyday actually know scratch that DO affirmations everyday as you are a winner with a never give up attitute. History is marked by failors. Athelets failing, inventors failing, buisness men failing, but it just takes that one moment that one success to make all those failures null and void.




Positive trading psychology- Here is an example of positive trading psychology. Today I am going to open strong with overwhelming confidence in any situation so called "life" wants to throw at me. I see my failures as challenges and challenges as lessons to be learned "life lessons". If I loose profit today I have to remember that this is normal infact it would be a sign of market instibility if I didn't loose profit sometimes. The stock market is like life sometimes you win sometimes you loose but you embrace everymoment and every oppertunitiy and you will be exhalted and transended to a higher pane of excistance beyond the cosmos. Some other postive trading psychology is nutriutional. What we eat plays a huge part in our mood, our confidence levels, our postive mindsets, our performance, our everything. Hire a nutritionalist and here the best part you can bill it as a buisness expense as its to help with your work performance so theres a forum of profit.


Negative trading psychology- Here is an example of negative trading psychology. I can't get over my losses yesterday how will I ever explain this to my spouse and if I lie to her I become lost and detached from her. Stock trading is becoming overwheling vs The stock market is overwheling my senses into pure undiscovered treasure. Which one would you rather be. We all have free will and choice for a reason. Make your choice now and stick to it. Never give up in life. Watch motivational music, motional speeches, tony robins, hell I'll even pay for 1 person next month to get a free tony robins course complelly on my dollar not yours. When you have destiny and discover it you become beyond happy all the time. It's like breathing for the soul
More...

sorry but it seems like you are not a psychologist.
 
risetothetop2021 said:
your right I tend to play psychologist. Thank you for pointing that out there is only up for me to go now
More...

that's fine mister.

demo trading is mainly about technical.
real trading is mainly about the mind.
continue to focus on mind management & psychology
 
I think most traders struggle with what they think is a mental problem, when in reality it is just the failure to accept the uncertainty that comes with ANY style or system of trading.
You are going to be "wrong", maybe more times than not. You have to learn that losing is part of the game.
That's why guys blow up. They can't accept a small loss...they don't want to admit they were "wrong". So the small loss becomes are large loss, sometimes taking them out.
 
I came across this post from way back by rs7. A good summary of what it takes. And to his point about accountability, the family account I manage is doing way better than my own account. Both profitable, but the family account is miles ahead. Looks like I need to work on my discipline. :)


Originally posted by rs7
I said I would do this, so here goes:

I have worked with thousands of traders. I have been paid to train hundreds of traders.
I have made a lot of money for my employers and lost plenty in my own accounts.
I have been a market maker, stock broker, proprietary trader, firm trader, and private money manager.

Why did I do so poorly in my own account.....?

Reason: accountability!
Purpose of this post: To try and help individuals to successfully trade their own accounts...in other words, the typical ET trader.

The one most common thing I see newer traders doing wrong is over-trading. It is understandable to me that new traders are impatient. They are told to learn from their mistakes. Not to be afraid to lose. Encouraged to trade a lot of small positions in order to more quickly gain experience. They want to speed up the learning process to get to their goal of making money as quickly as possible.

Traders are encouraged in some cases to generate commisions, order flow, ticket charges, desk charges. They feel like they have to trade to get their moneys' worth. Maybe they get a volume discount.

Newer traders read trading books, learn a zillion chart patterns and trading systems. They talk about technical theories, fundamentals, momentum, relative strength. They drool over technology that screens out parameters. They go to chat rooms and bulletin boards. They pay to "learn to trade" at seminars.

Some of these things I did. Most I did not. But invariably, I always made money for other people, and just couldn't do it for myself.
So after too many years of this, I came up with a mental approach that seems so obvious, but nonetheless took me forever to grasp. I had to treat myself as a customer/client. I could not use my intuition, my gut, my hopes and prayers in my own account. I never did for the clients, the employers and investors I had. Just for me. And what did it get me? POOR RESULTS.

So here is my Super Secret....if you are trading your own money, think of it as anyone's but your own. Have a reason for every single trade. Every single move. How would you EXPLAIN what you were doing to your mother if it were her money (as an example..use your own....your wife, child, priest, whatever). Could you explain? Or would you say "it's my job...I'm doing my job...I know what I'm doing"...etc.). The fact of the matter is I always knew that I could be questioned by those whose money I controlled. I knew I needed to have an informed and reasonable response. And I never got into a position I couldn't comfortably justify. But my own money? I didn't need to justify anything to myself. I felt I "knew what I was doing". I had my OPINIONS. I had my long term outlook, while I never used that in regard to my professional trading.

I am going to paraphrase something someone once said to me....We were working together managing money for an asian bank whose owners were very hard to deal with. I hope I can get his point across. I wish I could remember his words.. It was something like this:
"My wife went out one morning wearing gym shorts and a tee shirt over a bathing suit. She was going to meet her friends for breakfast and a day of boating. It was very cold, but it was very early. It was July in Arizona. I said to her, "honey it's freezing...take something warm". She said "no, it will warm up, it's summer."
Well it stayed cold and got colder still during the day. Rain,, wind, everything that "shouldn't have been". Her day on the water was ruined of course. Her car broke down on the freeway. The heat didn't work in the car, and the windows were home in the garage (an old jeep). She sat and froze until she finally got a tow after hours of shivering on the side of the road."

(I guess this was pre-cellphone days).

His point to me was to never assume to know what was going to happen no matter the circumstances. I never saw him make a trade he didn't believe would work. But he never "knew" it would work. He stayed consistent, but he stayed disciplined. If he was wrong, he saw it and changed his position. He believed what could be, but he knew what was.

He, and experience, taught me that opinions are plentiful. Their value is another thing entirely.

Now it is important to have opinions...no doubt....if you don't think something should or will happen, you cannot possibly initiate a trade. But be nimble. Don't hold opinions too long if they turn out to be incorrect.

I work with traders that only fade a big up or down open. They believe this will work more often than not because they know from prior results that this works for them. I know guys that only trade Nasdaq stocks, and others that only trade listed. I know guys that never trade after 10:30 and guys that are done by then. And on, and on.

Why do they do what they do? Because it is their discipline that they stay with what works for them. Do they keep the same style forever? No....traders have to adapt. But it is a slow process in general. So when things work well, you must press. When they don't, you must slow down. Or change. Usually one preceeds the next.

I have talked here before about the 3 most critical aspects of trading:
Discipline
Timing
Stock selection.

Discipline alway is on top. Be accountable to yourself. Treat your money as if it was entrusted to you by whomever you most love, respect, fear... whatever works.

Have a reason to make every trade. Be able to verbalize that reason. As importantly, have a reason to exit a trade. You hear "cut your loses and let your winners run"....That is so true. I so often have seen traders get our of good positions because they have achieved their "target price" "target of profit"....I say this is bad thinking. If the trade REMAINS a trade you would put ON at the time you "achieve target", why in the world would you take it off? To me, it is as important to have a reason to get out of a trade as to get in. Anyone can say to themselves they have a reason to exit a losing trade..."cut your losses"..Why then is it so hard for so many to have a real reason to get our of a winner?
It should be, and is, easy. It just takes DISCIPLINE. If you give back X% of your profit; if the market changes, if the group starts to get weak, whatever. You have to have your disciplines and stick to them. Make your own rules, and stay consistant to them.

I hope that all this typing can result in just one positive thought to just one person here. I have gone to so many "brainstorming" meetings in my career. I have listened to a million opinions, statements and arguments. I go though because I KNOW that if I pick up one single constructive thought I will have spent my time wisely. and believe me, they are few and far between. But I can remember single sentences said years ago in long boring meetings. Those senteces have added up to serve me well.

Timing should be easier for new traders to learn. Just be patient and buy or short at the price you pre-determine. Don't chase.

Stock selection...this is a bit tougher. I could write a hundred pages on this issue. But not being so inclined, have standards. Volume, percent of average volume, relative strength, news, whatever you are comfortable with. Know what your quote provider can tell you other than quotes alone. Look for trades, but don't be impulsive. Sometimes not making a trade is a great trade.

Again, I truly hope someone, somewhere, finds one thing of value in what I have said.:)
 
Tradex said:
Risetothetop2021, forget that mumbo jumbo psycho crap you usually read in most trading books.

To succeed as a trader you need:

1: A backtested system with CLEARLY defined trading rules.
2: Good money management rules (never lose more than 1 to 2% of your capital per trade).
3: discipline to follow rule 1 and 2.

That's it.
More...
Tradex, It might be that easy for you but it’s not for most traders. If it was the success rate would be a lot higher!
 
You must log in or register to reply here.
Back
Top