Denying Reality

I

IndexSwing

I have reflected on this for a long time but I think it became crystal clear to me as I was driving today: Whenever I have failed as a trader the root cause has been my human desire to deny unpleasant realities. For example: I enter a trade because I expect the market to do a certain thing. When the market fails to do what I expect the denial begins. I will say to myself "My timing was off but the market should still go up (or down). There is no sense in losing money for no reason, just because of bad timing, I should wait it out." Or I might say "I have already lost so much, It can't get any worse, I might as well hold" The list of excuses and denials goes on and on. Now if on the other hand I was filled with the desire to quickly dispose of positions that do not perform as expected I would be much further along right now. So my task to to try to reverse my psychology as best I can. I know that this applies to many other traders as well.
 
Quote from IndexSwing:

I have reflected on this for a long time but I think it became crystal clear to me as I was driving today: Whenever I have failed as a trader the root cause has been my human desire to deny unpleasant realities. For example: I enter a trade because I expect the market to do a certain thing. When the market fails to do what I expect the denial begins. I will say to myself "My timing was off but the market should still go up (or down). There is no sense in losing money for no reason, just because of bad timing, I should wait it out." Or I might say "I have already lost so much, It can't get any worse, I might as well hold" The list of excuses and denials goes on and on. Now if on the other hand I was filled with the desire to quickly dispose of positions that do not perform as expected I would be much further along right now. So my task to to try to reverse my psychology as best I can. I know that this applies to many other traders as well.
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This is stating the obvious. It is a story retold and to be retold by frustrated amateurs. Hope and human fallabiliy combine, in vain, to overthrow and triumph over cold rationality. The loser and loser mentality is triumphing and the result is trading which accrues net losses or is otherwise going nowhere.

But it does not end there because the skill needed is more demanding than your piece supposes. You next stage is to cut all or most postions quickly. Now you will be killing off as many good positions as bad ones.
:)
 
Quote from Cheese:

This is stating the obvious. A story retold and retold by frustrated amateurs. Hope and human fallabiliy combine, in vain, to overthrow and triumph over cold rationality. The loser and loser mentality is triumphing and the result is trading which accrues net losses or is otherwise going nowhere.

But it does not end there because the skill needed is more demanding than your piece supposes. You next stage is to cut postions quickly. Now you will be killing off as many bad positions as good ones.
:)
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The next stage is not to simply cut positions quickly, it is to cut those positions which do perform as I had expected and to hold those that do.

My opinion is that my problems and those of most traders has little to do with skill and a whole lot to do with psychology.
 
Quote from IndexSwing:

The next stage is not to simply cut positions quickly, it is to cut those positions which do perform as I had expected and to hold those that do.

My opinion is that my problems and those of most traders has little to do with skill and a whole lot to do with psychology.
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* to cut those positions which do NOT perform as expected.
 
Quote from IndexSwing:

The next stage is not to simply cut positions quickly, it is to cut those positions which do perform as I had expected and to hold those that do.

My opinion is that my problems and those of most traders has little to do with skill and a whole lot to do with psychology.
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Then since you are claiming your trading skill is there, let it reward you.
:)
 
If you don't think it is going to do what you thought it was going to do then cut it completely. It turned on you big deal. You only have a problem when a large majority of your trades are turning on you and you start losing money. If this starts happening then scrap every single strategy you have learned from some book, indicator or dvd most likely and study the damn market for yourself. Don't trade for months but the problem is most people are not willing to do that. I am telling you that you should scrap everything and make your own personal study of the market. If you can't do this simple feat then have fun being like the rest of them.

People always say pros in whatever sport or business always make things look easy. They make it look easy because it is easy to them. Simple.
 
Quote from NeoRio1:

If you don't think it is going to do what you thought it was going to do then cut it completely. It turned on you big deal. You only have a problem when a large majority of your trades are turning on you and you start losing money. If this starts happening then scrap every single strategy you have learned from some book, indicator or dvd most likely and study the damn market for yourself. Don't trade for months but the problem is most people are not willing to do that. I am telling you that you should scrap everything and make your own personal study of the market. If you can't do this simple feat then have fun being like the rest of them.

People always say pros in whatever sport or business always make things look easy. They make it look easy because it is easy to them. Simple.
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Right on Neo!!!
that is the truth!
You'll only get out of it , what you put into it.
 
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