Emotional traits of the best traders

[bigarrow]

Quote from nitro:

Well, you miss the point. Of course anything can be turned into psychological problem. Money, marriage, kids, pets, work, etc. I am talking apriori, not aposteriori. You want to avoid the aposteriori.

My point is that if you are looking for psychological rules to help your trading, I claim you can point to one of the five ducks (I may have missed some) that _caused_ you to start seeking such rules.

It is like people tell you in order to reduce disease, you should wash your hands often. You run out of soap or you never had any, so you don't wash hands. You catch a disease. You start praying to God to cure you and you seek help from a shrink and if only you had religion you would not have gotten sick. See?

I think starting out the mark douglas is good and it helped me narrow down and actually develop my method. It took a couple of readings to sink in. I found out the emotional distress I was having was because I didn't have my edge/method totally figured out yet, thus the pain. Sometimes I was hot and sometimes cold but didn't really know why. So I stopped trading and narrowed down on what I was trading and then all of the sudden it came together. So I think both sides to this discussion is right. Starting out, developing a plan and method the psychology part is needed, but after that I think what Nitro wrote is correct.
But what helped me the most was when I did what several members on here have said, take the time to watch the screen, the price and volume and take the time to learn what is going on.

 

[TradingGal]

Faith in yourself. Faith in the companies you buy securities in. Faith in the fact that if they halted all trading such that you could not exit your trade, that you would be comfortable holding that position for the long-term (even if that means you have to support yourself some other way in the meantime). Faith that your system is not merely a fluke that cannot be replicated again with decreased capital. Faith that if you faced a catastrophic loss, it would most likely be due to broader market forces and you would not be the only one affected by it. Faith that you can earn a living some other way. Faith that the market does recover, and that for every loss there is opportunity to regain what is lost. Faith that what is making you successful as a trader is more about YOU and less about the market. Faith that you have made mistakes before and can draw from those experiences.

I think a successful trader is somewhat on edge from 9:30 until 4pm each day, but can then walk away from it all and sleep well without too much fear or worry. When I leave significant capital in the market overnight or over a weekend, or even a holiday weekend, I always watch the market close and then say to myself, "We are all in this together." And then I go on with my life and don't think again about my position until the following market open.

 

[Gaddock]

Quote from nitro:

Almost all "psychological" rules compensate for lack of, in order of importance:

a) No reliable edge.
b) Improperly capitalized. Cannot pay bills during bad stretch. If you cannot pay bills because you have not made money in three months, but you do have edge, you are poorly capitalized.
c) Poor cost structure to trade. If you cannot take reasonable profits because taking the position off and putting it back on removes almost all profit, you have a bomb waiting to explode.
d) Lack of adequate information and technology.
e) Trading scared money.

If you have those things, and you still lose, find another career. Otherwise, don't start without all those ducks in place.

I was all of the above during my two years prop trading. My wife got pregnant and that was the end of prop trading as I needed stability and benefits. I went retail with the super regional (now just a fleeting thought of pink mist) and started cold calling me arse off. Just ended year two and brought in over a quarter million in commissions.

I've been quant trading arb models with options and have BEEN KILLING IT!!!!!!! that is if over 50% year to date and down around 7% in the big slide last year would be considered 'killing it' in your reality. It damn sure is at a retail wire house.

The big difference is I have zero emotion about the trades I'm making and DO NOT trade anything in my account that is in any of my clients accounts. I take no trade unless I have an 85% probability of success and simply trade the math. On any one trade the probs mean nothing but the larger the sample the more valid they become.

Emotion made trading my own cash miserable. No emotion and Im loving my carrer.

Just my $0.02

 

[Redneck]

FWIW & IMHO

Another to add if I may


Complete Flexibility – in thought

Complete Rigidity – in action




(Note to self)
And to wit the journey must always continue


Regards

RN

 

[TraderTactics]

There are many emotions one must overcome to become a successful trader such as anxiousness, fear, anger, retaliation, and revenge desires. No one likes to lose, but sometimes it is a reality. It is how you take the loss and move past it to succeed that makes the best traders.

To be successful you should:
- have high self-discipline
- not be over confident
- likely to believe in the occurrence of chance (random) events.
- have low emotional reactivity.

 

[Cheese]

Its a matter of semantics. This thread subject, as so often elsewhere, equates 'emotion' with anxiety or confusion or panic or even gross stupidity in an individuals trading. It appears that there is plenty of that in newbie or amateur trading.

Remember when you are inexperienced or without sufficient savvy
your emotions cannot do otherwise than contribute confusion.

But emotion need not be negative for it is used as a positive driving force for successful trading. Here you know what you are doing; correspondingly your emotions are facilitating calm, focus and satisfaction.