Emotional traits of the best traders
- Thread starter PeterEastgate
- Start date
I disagree,...... trading is 100% psychology!!!
1. Are you suggesting that, "If you think like one, you act like one"? If so, think like Tiger Woods or Michael Jordan, I'll play like them?
2. I don't get your Turtle example...
You have 10 traders trading a Trend-following system. >>> The performance varied. >>> ??? >>> Factor = psychological.
The "???" is what I'm talking about. You automatically concluded that the difference is psychological without giving it more thought. I tend to see with a lot of retail traders, once they reach a point where they can't come up with a conclusion within their experience and knowledge, they automatically conclude it on some psychological issue.
In another words, the person stopped pursuing for knowledge and skills. In terms of the Turtles (the source of information is from Curtis or Stig), Curtis Faith was one of Richard's favorite so he kept on getting more buying power / leverage. Also, there was a lot of discretion given to the traders regarding which markets to trade (it's trend following... so it's obvious) and how they pyramid the position. That has nothing to do with discipline about following Turtle rules.
Anyways, you didn't have the knowledge behind some of the reasons why the Turtles performed differently. So you concluded it to be psychological. Once you gain the knowledge, it wasn't quite so.
3. I don't deny psychology as a whole. Just like sports, where they tune/optimize their focus towards performing. All that comes after the fact that you have an edge. (or in sports... after gaining the skills after a lot... alot of practice)
OK...
1. I'll randomly pick a market.
2. You use your psychology and tell me whether to Buy/Sell.
3. Make money.
Show me what 100% psychology is.
once u have a proven trading edge, the next logical step is to develop the proper mindset to consistently implement
easier to develop a good trading strategy than to develop a good trading discipline
which is why not all smart people can trade for a living
easier to develop a good trading strategy than to develop a good trading discipline
which is why not all smart people can trade for a living
Knowledge / skills come first.
Before you focus, you need to know what you are focusing on.
I think this emotion argument is blown out of proportion...
I've worked alongside some very profitable traders with huge accounts and they get mad, they yell, they curse, they punch their keyboards. I've also heard the same thing in equity prop divisions at IBs. The bond traders are quiet and calm but the equity guys go nuts though.
I think emotions are bad when you feel fear or greed. When you have a big position and your body becomes numb, then that is dangerous. But what is really happening, in my case, is that I'm usually in a way bigger position than I am supposed to be in. Maybe its a good thing my body is making me feel uncomfortable. This could cloud your judgment. But there are plenty of expressively "emotional" guys that don't allow it to cloud their judgments.
I've worked alongside some very profitable traders with huge accounts and they get mad, they yell, they curse, they punch their keyboards. I've also heard the same thing in equity prop divisions at IBs. The bond traders are quiet and calm but the equity guys go nuts though.
I think emotions are bad when you feel fear or greed. When you have a big position and your body becomes numb, then that is dangerous. But what is really happening, in my case, is that I'm usually in a way bigger position than I am supposed to be in. Maybe its a good thing my body is making me feel uncomfortable. This could cloud your judgment. But there are plenty of expressively "emotional" guys that don't allow it to cloud their judgments.
First to your question in the previous post. The "???" he is referring to is the difference that is due to every trader's different beliefs (part of psychology), different mental strategies (part of psychology), different mental states (part of psychology), different decisions making (part of psychology), and the list could go on.
Now reply to your last post.
In the real world traders don't pick random trades, but even if you would then the rest of such as trade management (SL, profit taking, etc,) would be based on decisions. (part of psychology).
The buy/sell are part of the trading strategies is what you or other traders believe that will give you an edge (beliefs are part of psychology), and if you or the trader don't follow the tested method it can be due to mental states such as greed, fear, hesitation, stress, etc which can interfere with the objective decision making (all part of psychology).
In order to make money you have to follow the tested trading strategies and make proper decision as to when the methods are no longer working, proper money management, etc, which are all part of decision making, and to make proper decisions you have to be in proper mental state, etc, (again all part of psychology)
Hope it helps
Quote from Mr.Consistent:
First to your question in the previous post. The "???" he is referring to is the difference that is due to every trader's different beliefs (part of psychology), different mental strategies (part of psychology), different mental states (part of psychology), different decisions making (part of psychology), and the list could go on.
Now reply to your last post.
In the real world traders don't pick random trades, but even if you would then the rest of such as trade management (SL, profit taking, etc,) would be based on decisions. (part of psychology).
The buy/sell are part of the trading strategies is what you or other traders believe that will give you an edge (beliefs are part of psychology), and if you or the trader don't follow the tested method it can be due to mental states such as greed, fear, hesitation, stress, etc which can interfere with the objective decision making (all part of psychology).
In order to make money you have to follow the tested trading strategies and make proper decision as to when the methods are no longer working, proper money management, etc, which are all part of decision making, and to make proper decisions you have to be in proper mental state, etc, (again all part of psychology)
Hope it helps
Very interesting how you never use the word "MARKET". For you everything is "all part of your psychology" even though your definition of "psychology" is very (philosophically) trivial.
http://en.wikipedia.org/wiki/Psychology
Can you pass this test:
http://users.dhp.com/~laflemm/RfT/Tut2.htm
:eek: :eek: :eek: