wouldn't you get stopped out on market fluctuation and spikes and miss out on retracement?
Day trading basics
- Thread starter rajesheck
- Start date
It will happen for those who ignore or unaware of trend trading psychology.
Trading is psychological skill, not technical.
For trading community Earth is still flat, not globe. So many Galileos shouting and traders are not listening.
Only 1% of traders automated their trading.
When 70 or 80 percent of traders automated their trading, then trading becomes more of a technical skill. (Believe me this will never happen.)
Makes sense, right ?
Investors and traders must apply psychology while using FA and TA respectively.
This is the mantra for developing business attitude. Success in investment and trading depends on business attitude. This is what differentiates a professional from others.
I wish as many as traders upgrade their attitude from analytical to psychology and art of imagination.
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Trend Trading psychology
https://www.elitetrader.com/et/threads/day-trading-basics.305348/page-4#post-4380964
Why FA is not for traders ? And why psychology is crucial for successful trading ?
Though the platform for investors and traders are the same, they are two unique businesses.
The fundamental difference is that investment is connected to conventional market sentiment/psychology and trading is connected to stock market sentiment/psychology.
Both are connected to sentiments/psychology about the facts and not directly to the facts. This is where pure analytical stuff fails. One needs imaginative skill to see the "disconnected" nature of business. FA and TA are tools to be used to analyze from the perspective of sentiment/psychology.
FA gives insights about the conventional market. TA gives insights about the stock market.
Trading is no where related to conventional market and FA cannot provide effective insights about the stock market. Trading with FA as main tool will not be much effective. For sure cannot be considered for full time trading.
Trading with psychological insights using TA is perfect match.
https://www.elitetrader.com/et/threads/day-trading-basics.305348/page-4#post-4380964
Why FA is not for traders ? And why psychology is crucial for successful trading ?
Though the platform for investors and traders are the same, they are two unique businesses.
The fundamental difference is that investment is connected to conventional market sentiment/psychology and trading is connected to stock market sentiment/psychology.
Both are connected to sentiments/psychology about the facts and not directly to the facts. This is where pure analytical stuff fails. One needs imaginative skill to see the "disconnected" nature of business. FA and TA are tools to be used to analyze from the perspective of sentiment/psychology.
FA gives insights about the conventional market. TA gives insights about the stock market.
Trading is no where related to conventional market and FA cannot provide effective insights about the stock market. Trading with FA as main tool will not be much effective. For sure cannot be considered for full time trading.
Trading with psychological insights using TA is perfect match.
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Analytical Syndrome (Analysis paralysis)
Analytical attitude is the major syndrome prevailing in trading fraternity (including many professional coaches) that comprises the mass of about 95% of traders. This syndrome is the root cause of failures and psychological issues faced my the trading mass.
There are a few ways to come out of this syndrome.
1. Develop business attitude
2. Embrace creativity
3. Unleash the power of subconscious mind
4. Do meditation
5. Learn basic psychology
6. Work on personal philosophy (Ontology)
7. Sound Therapy (chanting)
In simple words be more human than an analytical robot.
Analytical attitude is the major syndrome prevailing in trading fraternity (including many professional coaches) that comprises the mass of about 95% of traders. This syndrome is the root cause of failures and psychological issues faced my the trading mass.
There are a few ways to come out of this syndrome.
1. Develop business attitude
2. Embrace creativity
3. Unleash the power of subconscious mind
4. Do meditation
5. Learn basic psychology
6. Work on personal philosophy (Ontology)
7. Sound Therapy (chanting)
In simple words be more human than an analytical robot.
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One more example of how a new trader begins journey by applying what he already knows (I also started here).
https://www.elitetrader.com/et/threads/choose-trading-instrument.305559/
A typical case where an IT guy with sound logical/analytical skills is all set to test the waters of trading.
The journey sees three main milestones :
1. Technical Charts
2. Price Action strategies
3. Psychology based strategy
Analogy
I like to give an analogy for technical charts.
(Almost all technical charts are basically based on average/mean)
A statistician went for a picnic with his family. They made a tent near a stream which was running about 3 feet depth near the shore.
His two kids were 5 feet and 3 feet height. They both wanted to walk into the stream. The statistician father told his wife "The average height of our kids is [4 = (5+3)/2]. And the stream is 3 feet depth only. So we can allow both our kids to walk into the stream."
However his wife did not believed in his calculations and denied to send her kids.
Almost all the technical indicators are average/mean based. Trading based on these indicators is like risking the kids (money) to walk in the water (market).
A more matured trader then comes to price action strategies. Here he will drastically reduce his risk. However he will sooner or later find that making money is not easy.
Finally a few traders manage to go beyond price action and see trading as a psychological skill rather than technical or analytical skill. Here they make a major breakthrough to become a successful traders.
https://www.elitetrader.com/et/threads/choose-trading-instrument.305559/
A typical case where an IT guy with sound logical/analytical skills is all set to test the waters of trading.
The journey sees three main milestones :
1. Technical Charts
2. Price Action strategies
3. Psychology based strategy
Analogy
I like to give an analogy for technical charts.
(Almost all technical charts are basically based on average/mean)
A statistician went for a picnic with his family. They made a tent near a stream which was running about 3 feet depth near the shore.
His two kids were 5 feet and 3 feet height. They both wanted to walk into the stream. The statistician father told his wife "The average height of our kids is [4 = (5+3)/2]. And the stream is 3 feet depth only. So we can allow both our kids to walk into the stream."
However his wife did not believed in his calculations and denied to send her kids.
Almost all the technical indicators are average/mean based. Trading based on these indicators is like risking the kids (money) to walk in the water (market).
A more matured trader then comes to price action strategies. Here he will drastically reduce his risk. However he will sooner or later find that making money is not easy.
Finally a few traders manage to go beyond price action and see trading as a psychological skill rather than technical or analytical skill. Here they make a major breakthrough to become a successful traders.
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A man asked what to do in a trading holiday...and another man, who seems to love his pet dog more than himself, tells about his pet dog.
https://www.elitetrader.com/et/threads/what-to-do-when-markets-are-closed.305612/page-2#post-4384090
Be more human.
https://www.elitetrader.com/et/threads/what-to-do-when-markets-are-closed.305612/page-2#post-4384090
Be more human.
Psychology of CryptoCs...
https://www.elitetrader.com/et/threads/bitcoin-not-a-currency.301530/page-3#post-4384222
https://www.elitetrader.com/et/threads/bitcoin-not-a-currency.301530/page-3#post-4384222
Never lose money? Like never lose a trade?
"Never lose money" is an attitude, mindset, temperament or a principle. It is a creative psychological approach towards trading or any business. The below article explains it.
http://www.investopedia.com/financial-edge/0210/rules-that-warren-buffett-lives-by.aspx
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There is no "noises" in trading.
Conventional view of trading noises:
"Noise removal is one of the most important aspects of active trading. By employing noise-removal techniques, traders can avoid false signals and get a clearer picture of an overall trend. Here we take a look at different techniques for removing market noise and show you how they can be implemented to help you profit."
- investopedia.com
Psychology of trading noises
Actually there is no noise in trading chart.
Market will be either trending or indecisive. The so called "noises" are solid indicators of indecisive state of market. Noise removal means removing a vital indicator.
Trading signals wont work effectively in indecisive range. Price resists to break out from this range. Range bound traders may be active in this indecisive range. On the other hand trend traders must practice patience in such a period of market.
Many a times price breaks the indecisive range and quickly moves to a new indecisive range. So patience is most needed here for trend traders.
Conventional view of trading noises lacks psychological perspective of market. The above link to the article on "Trading without noise" is a classical example of how the internet is flooded with less than business class information.
The knowledge on trading available on internet and books are of mixed nature and mostly ineffective. Look forward for business class content that talks about all dimensions of trading :
Conventional view of trading noises:
"Noise removal is one of the most important aspects of active trading. By employing noise-removal techniques, traders can avoid false signals and get a clearer picture of an overall trend. Here we take a look at different techniques for removing market noise and show you how they can be implemented to help you profit."
- investopedia.com
Psychology of trading noises
Actually there is no noise in trading chart.
Market will be either trending or indecisive. The so called "noises" are solid indicators of indecisive state of market. Noise removal means removing a vital indicator.
Trading signals wont work effectively in indecisive range. Price resists to break out from this range. Range bound traders may be active in this indecisive range. On the other hand trend traders must practice patience in such a period of market.
Many a times price breaks the indecisive range and quickly moves to a new indecisive range. So patience is most needed here for trend traders.
Conventional view of trading noises lacks psychological perspective of market. The above link to the article on "Trading without noise" is a classical example of how the internet is flooded with less than business class information.
The knowledge on trading available on internet and books are of mixed nature and mostly ineffective. Look forward for business class content that talks about all dimensions of trading :
1. Business principle / philosophy
2. Psychology
3. Common sense
4. Creativity / Intuition / Insights / Inspiration
5. Trading strategies based on business psychology
6. Well-being
2. Psychology
3. Common sense
4. Creativity / Intuition / Insights / Inspiration
5. Trading strategies based on business psychology
6. Well-being
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