I like profits to run; but he may want to look @ PSAR[parabolic stop + reverse] when he make$ 59%% /, in day + half. Hint PSAR tightens up stops.LOL
Best "trading psychology" book you have ever read?
- Thread starter lemarche
- Start date
I like profits to run; but he may want to look @ PSAR[parabolic stop + reverse] when he make$ 59%% /, in day + half. Hint PSAR tightens up stops.LOL
There is a number of research journals on the performance of trading based on psychology. The mean results are negative and statistically significant. They also have evaluated performance of financial institutions who are believed to be less biased and their trades are information based, and they tend to generate positive returns and statistically significant.
There was a recent research on round number bias and the original literature suggests the return is positive and statistically significant using NYSE stock trades for 100 firms. But my results on derivative market show contracting results - the type of traders' (unspecialised commercial traders ) use round number as their reference point to evaluate the value of derivative security and they generate negative daily profit; my results are consistent with literature on behavioural biases.
There was a recent research on round number bias and the original literature suggests the return is positive and statistically significant using NYSE stock trades for 100 firms. But my results on derivative market show contracting results - the type of traders' (unspecialised commercial traders ) use round number as their reference point to evaluate the value of derivative security and they generate negative daily profit; my results are consistent with literature on behavioural biases.
I never heard of "trading based on psychology". What exactly is that or can you give an example because my first thought is someone that doesn't have a trading plan and is taking trades based on emotions.
In contrast, when I hear someone say psychology is important in their trading...its a trader that's saying they have discipline to follow their trading plan and that they are not taking "emotional trades".
Simply, what exactly did those research journal authors research ?
In contrast, when I hear someone say psychology is important in their trading...its a trader that's saying they have discipline to follow their trading plan and that they are not taking "emotional trades".
Simply, what exactly did those research journal authors research ?
Three dimensions of trading
We know trading is based on demand and supply. Demand is a psychological factor. This is mass psychology.
How an individual trader percieves and pursues trading is trading psychology.
Whether the trader is biased towards fear or greed at this moment is trader's psychology.
And we dont need someone to tell us that trading is a psychological game. Our simple comnonsense will tell us.
Successful traders are those who apply commonsense in life and trading.
Probably 99% traders fail because they dont believe in their commonsense.
Commonsense makes all the difference in our life.
Makes sense, right ?
We know trading is based on demand and supply. Demand is a psychological factor. This is mass psychology.
How an individual trader percieves and pursues trading is trading psychology.
Whether the trader is biased towards fear or greed at this moment is trader's psychology.
And we dont need someone to tell us that trading is a psychological game. Our simple comnonsense will tell us.
Successful traders are those who apply commonsense in life and trading.
Probably 99% traders fail because they dont believe in their commonsense.
Commonsense makes all the difference in our life.
Makes sense, right ?
Last edited:
Ineffective ways of trading
Trading based on FA is innefective way of trading. A clever scalper may earn multifold than that.
Chart is trader's tool. FA is investors tool. Technical chart is more of technical sense than commonsense. I guess most of the automated trading is technical chart based which is most ineffective way of trading.
Positional trading is far less profitable than day trading. Also overnight gap-ups and gap-downs shakes the risk management.
Part time or hobby traders dont bother much about the efficiency of their approach towards trading. This is again a psychology or simply commonsense.
When someone posts see whether he is fulltimer or parttimer.
If we miss psychology or commonsense in trading then we are missing the major chunk.
Trading based on FA is innefective way of trading. A clever scalper may earn multifold than that.
Chart is trader's tool. FA is investors tool. Technical chart is more of technical sense than commonsense. I guess most of the automated trading is technical chart based which is most ineffective way of trading.
Positional trading is far less profitable than day trading. Also overnight gap-ups and gap-downs shakes the risk management.
Part time or hobby traders dont bother much about the efficiency of their approach towards trading. This is again a psychology or simply commonsense.
When someone posts see whether he is fulltimer or parttimer.
If we miss psychology or commonsense in trading then we are missing the major chunk.
Last edited:
%%
OK ;simple example follows. Rich ''turtle trainer'' Dennis warned== when you are getting beat up in the market, get your head[ self] out of the mixer[market]. LOL; true.
Trading in the Zone
