Is Trading a Mass/Crowd Psychology?

Here is an update from my side:

I am observing and learning every day market action. Surely there are patterns and i am observing and taking note of them in my journal.

I am also revising a lot after market closes asking question to myself like How could i trade a particular day? Lot of simulation practice and my mind is grasping, retaining and internalizing "mass behavior and patterns".

Here is the biggest irony:

I have figured it out i need to see, observe and revise atleast 10 years of market action to expose my brain to lot of trading patterns and practice lot of simulations.

My brain is definitely 'rewiring' itself. It is rewiring neurons pathways to handle market emotions like volatility, slaughter, euphoria, underreaction and overreaction.

Apart from current market action, I am working on last 10 years data as well starting from June 2000.After 30 mins of hard work, i feel tired as my brain mental energy depletes. Here i require tremendous amount of hard work- Taking a break and then analyzing more 'mass market behaviors and patterns.

I am sure it will work but i need 10 years of hard work to get enough practice and change brain neuron pathways to handle trading skill.

I dont know how simple mindless indicators or set ups make money but i know trading profession is same like any other profession: You need to put hard work in grasping the patterns, technique and how collection of mass traders act, react day after day.

Challenges:

1) I am all alone. It is a completely lone and an unknown journey to become a discretionary trader. Some days motivation goes down the hill.

2) There is no way i can become a master trader by exposing myself to 2000-2500 trading patterns and practicing them again and again. That means i need to go out, get a full time job and earn my living for the next 10 years. Every day in morning and evening after work, i need to work on trading skill.

3) Hard work is immense. As i said earlier, 30 mins of learning and understanding' mass market behavior' makes me tired. This will be the biggest challenge as i dont have a habit of working hard without any supervision.

Quite a tough and challening journey to become a discretionary trader.
 
Are you trading from home or at a firm? If at home, being alone can be hard, etc., esp when trading, unless you just do it for the first hour.
 
It sounds like your approach is realistic.

I would recommend reading <i>The Disciplined Trader</i> by Mark Douglas to get an idea of <i>why</i> the majority of market participants lose and <i>how</i> to realign your thinking framework to not fall into the same modes of thinking.

Have that understanding in your mind first before continuing with your nightly research. Be patient with yourself and with your progress.
 
Quote from momentum7:

Are you trading from home or at a firm? If at home, being alone can be hard, etc., esp when trading, unless you just do it for the first hour.
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Yes buddy..trading alone from home while finishing few interna audit professional exams.

Once i complete the papers, i am going out and finding full time internal audit job..learning trading skill will take time and i will keep working on it every day to train the brain.
 
Quote from Samsara:

It sounds like your approach is realistic.

I would recommend reading <i>The Disciplined Trader</i> by Mark Douglas to get an idea of <i>why</i> the majority of market participants lose and <i>how</i> to realign your thinking framework to not fall into the same modes of thinking.

Have that understanding in your mind first before continuing with your nightly research. Be patient with yourself and with your progress.
More...

Yes i have read mark Douglas books- The disciplined trader and trading in zone. An excellent original innovation by Mark which makes sense.

How ever the books are effective if one has figured out the trading method. At this stage i am still learning the ropes of trade. The brain neurons and synapses are used everyday to learn,revise, understand and grasp collective behaviors and patterns.

My approach is realistic because it is fine tuned with the mother nature. I went back to the very source of learning and studied how we actually learn a skill, how brain neurons changes (known as brain plasticity) while learning a new skill etc.

Simply put, We learn a new skill by practice, practice, and more practice. In trading parlance, this translates in 2 things:

1) First by practicing every day as a simulation and doing it couple of times over a period of time picking up fine nuances of how i could pick up a profitable day trade during live market hours.

2) By exposing one self to more trading patterns and behaviors...There are no fixed rules. Sometimes a huge gap down opening gets filled during trading hours or a huge gap down opening creates the high of the day and market keeps falling more.

So, it is all in the context of that particular pattern- How did mass psychology of millions of traders collectively works

Quite a hard work..2020 is where i think i will be fluent after exposing myself to about 20 years of collective patterns- thats approx 5000 trading days (from 2000-2020)
 
Quote from kingfisher3210:

Here is an update from my side:
Challenges:
1) I am all alone. It is a completely lone and an unknown journey to become a discretionary trader. Some days motivation goes down the hill.
2) There is no way i can become a master trader by exposing myself to 2000-2500 trading patterns and practicing them again and again. That means i need to go out, get a full time job and earn my living for the next 10 years. Every day in morning and evening after work, i need to work on trading skill.
3) Hard work is immense. As i said earlier, 30 mins of learning and understanding' mass market behavior' makes me tired. This will be the biggest challenge as i dont have a habit of working hard without any supervision.
Quite a tough and challening journey to become a discretionary trader.
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Then become an objective trader.

1. You are not alone and the journey is not unknown. Your motivation is diminishing because you are trying to learn in an ever changing environment. Welcome to the real world of time based charting.

2. There are only a small handful of trading patterns (oscillation outcomes) in charting environments based on equally weighted bars (constant volume bars).

3. Hard work isn't immense but intense. Anything worth while isn't easy but there is no need to compound your search with unnecessary procedures based on actions that only lead to more questions. You deserve answers to your hard work.

The journey to become an objective trader is still hard but not nearly as challenging nor fruitless.
 
Quote from ProfLogic:

Then become an objective trader.

1. You are not alone and the journey is not unknown. Your motivation is diminishing because you are trying to learn in an ever changing environment. Welcome to the real world of time based charting.

2. There are only a small handful of trading patterns (oscillation outcomes) in charting environments based on equally weighted bars (constant volume bars).

3. Hard work isn't immense but intense. Anything worth while isn't easy but there is no need to compound your search with unnecessary procedures based on actions that only lead to more questions. You deserve answers to your hard work.

The journey to become an objective trader is still hard but not nearly as challenging nor fruitless.
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Very nice refreshing thoughts. Thanks for sharing with us.
 
Quote from kingfisher3210:

So, it is all in the context of that particular pattern- How did mass psychology of millions of traders collectively works

Quite a hard work..2020 is where i think i will be fluent after exposing myself to about 20 years of collective patterns- thats approx 5000 trading days (from 2000-2020)
More...

I believe you are making the "how to" aspect of trading 100-fold more difficult than it is. I can teach you in about 1 hour how I trade profitably. The price bars in a chosen trading time frame provide you with the footprint of mass/crowd psychology. I can give you my concrete rules for entering a trade, placing a protective stop and exiting a trade; rules that, if followed without cheating, will produce an overall profit on a consistent basis. This information is available in a plethora* of trading books and seminars.

The aspect of trading that you may master quickly, slowly, or not at all --- the thing that cannot be taught, that has to be experienced and anchored individually --- is the ability to follow rules without cheating once an edge has been defined.

* http://www.youtube.com/watch?v=-mTUmczVdik
 
I began trading long ago while working on my economics degree and accounting degree. Some of the elective course work I took was in psychology and sociology. Sociology courses in the behavior of crowds, gave me great insight into market analysis. I think overall it was a key to my success.


Quote from kingfisher3210:

I cant believe. After 15 months of trading and going no where, i now firmly believe to be successful in trading, i need to have a solid grasp of mass/crowd psychology.

At a certain price range after bullishness, bulls are tired and trend starts to reverse to bearishness.

At a certain price range after bearishness, bears are tired and trend starts to reverse to bullishness.

To understand crowd psychology, it needs phenomenal experience, note taking and revision. This looks to me a journey of 10 years to become a full time trader from an amateur trader.

I got fed up with my losses in trading and after one year of trading beginning from Oct 1, 2010 i started to make notes of the Asian indices market which i trade.

For the first time in my trading life, i am able to understand the scheme of things.

What you guys say? Am i wasting my time in trying to become a discretionary trader?
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