Mind Money and Markets

Masterchanger · Feb 15, 2010

This is a thread that deals with our relationship to ourselves and the market. This is not intended to imply that work isnt required to be successful in trading the markets successfully, just to point out that our beliefs about ourselves and our relationship with money and achieving abundance can play a role in reaching our trading goals.

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/xvKmGQ0-lq4&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/xvKmGQ0-lq4&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

<object width="560" height="340"><param name="movie" value="http://www.youtube.com/v/drBVtorEUS0&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/drBVtorEUS0&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="560" height="340"></embed></object>

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/F2ESPnSscQ8&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/F2ESPnSscQ8&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/PyyhWF-bbQU&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/PyyhWF-bbQU&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

dandxg · Feb 16, 2010

Did you dust off your copy of The Secret?

I actually do believe in the power of positive thinking, NLP, etc.

So answer this question for me since no NLP expert can? How does one keep a positive attitude and be realistic at the same time? Or shall we just deny that we are still in a very serious Recession/Depression?

Pension_Admin · Feb 16, 2010

Masterchanger · Feb 16, 2010

Quote from dandxg:

Did you dust off your copy of The Secret?

I actually do believe in the power of positive thinking, NLP, etc.

So answer this question for me since no NLP expert can? How does one keep a positive attitude and be realistic at the same time? Or shall we just deny that we are still in a very serious Recession/Depression?

Thanks for participating in this discussion.

LOL, maybe I did dust it off.

I"m certainly no NLP expert, but I'll take a stab at it.

I define a positive attitude, as an attitude inclined to feel that it is possible for positive events to occur in life and or that the individual has some amount of personal power to bring to bear to help realize a postitive outcome aka a positive expectation.

I define "realistic" (ie based on reality) as a method of assessing the current situation in a factual sense, not in a subjective sense. Example, the fact may be that your trading account has suffered a 50% drawdown and you need to make 100% to get back to breakeven. An honest assessment and analysis of trading performance/experience (past performance) might enable one to calculate the odds of making that 100% return vs subjectively believing you will because you believe you have to because you need that money to live on or you fear having to tell your wife!

As far as the recession/Depression. This is where your focus come into play, the reality is that in this time of overall economic depression that many people are without jobs or underemployed and the are others who are benefiting from this economic state eg bankruptcy attorneys, investors looking for foreclosed properties. People with cash who are able to take advantage of others financial mishaps such as purchasing reposessed equipment from bankrupt business for cents on the dollar. Others might point out that with the business slow down there are fewer competitors and competion for business, talented employees is at an all time low. So there is money being made in any and every business or economic cycle.
If your an employee, it is likely your view of the economy and its potential opportunities will be different from one of the others who make hay during these times. If your focus is on security(either thru lack of resources such as lack of income or fear of loss of job and therefor income), you will likely run for cover you will likely not put yourself in the position to benefit from this cycle of the economy. If you have extra resources, depending on how you think and feel about them and the economy then you will behave exactly like the employee fearing loss of income or assets and not risk your capital or fail to see potential opportunity. So mindset plays a big role. As far as trading is concerned one could look at the decline in volume of the stock market and feel that opportunity is lacking and quit trading others will view the market as an ocean of opportunity and look for a solution that enables them to profit from that opportunity. I cannot imagine the later trader being successful at finding those opportunities without a baseline positive expection of potential for profit, while recognizing the current economic cycle and yet not allowing that to stop him from looking for and potentially exploiting that opportunity. I'll go so far as to say that the person with the negative/fear based mindset would not even likely try to find opportunity because he believes it isn't there. Self fulfilling prophecy.

The principle of what you focus on expands or you get more of what you focus on.

dandxg · Feb 16, 2010

Quote from Masterchanger:

Thanks for participating in this discussion.

LOL, maybe I did dust it off.

I"m certainly no NLP expert, but I'll take a stab at it.

I define a positive attitude, as an attitude inclined to feel that it is possible for positive events to occur in life and or that the individual has some amount of personal power to bring to bear to help realize a postitive outcome aka a positive expectation.

I define "realistic" (ie based on reality) as a method of assessing the current situation in a factual sense, not in a subjective sense. Example, the fact may be that your trading account has suffered a 50% drawdown and you need to make 100% to get back to breakeven. An honest assessment and analysis of trading performance/experience (past performance) might enable one to calculate the odds of making that 100% return vs subjectively believing you will because you believe you have to because you need that money to live on or you fear having to tell your wife!

As far as the recession/Depression. This is where your focus come into play, the reality is that in this time of overall economic depression that many people are without jobs or underemployed and the are others who are benefiting from this economic state eg bankruptcy attorneys, investors looking for foreclosed properties. People with cash who are able to take advantage of others financial mishaps such as purchasing reposessed equipment from bankrupt business for cents on the dollar. Others might point out that with the business slow down there are fewer competitors and competion for business, talented employees is at an all time low. So there is money being made in any and every business or economic cycle.
If your an employee, it is likely your view of the economy and its potential opportunities will be different from one of the others who make hay during these times. If your focus is on security(either thru lack of resources such as lack of income or fear of loss of job and therefor income), you will likely run for cover you will likely not put yourself in the position to benefit from this cycle of the economy. If you have extra resources, depending on how you think and feel about them and the economy then you will behave exactly like the employee fearing loss of income or assets and not risk your capital or fail to see potential opportunity. So mindset plays a big role. As far as trading is concerned one could look at the decline in volume of the stock market and feel that opportunity is lacking and quit trading others will view the market as an ocean of opportunity and look for a solution that enables them to profit from that opportunity. I cannot imagine the later trader being successful at finding those opportunities without a baseline positive expection of potential for profit, while recognizing the current economic cycle and yet not allowing that to stop him from looking for and potentially exploiting that opportunity. I'll go so far as to say that the person with the negative/fear based mindset would not even likely try to find opportunity because he believes it isn't there. Self fulfilling prophecy.

The principle of what you focus on expands or you get more of what you focus on.

Good, well thought out answer, thank you.

nutmeg · Feb 16, 2010

The principle of what you focus on expands or you get more of what you focus on.
------------------------

To be what you've never been you must do what you've never done.

Masterchanger · Feb 16, 2010

I may have too much positive expectation. LOL

One of the things I've been dealing with is expectation of profit.

I may notice a trade setup that has a excellent long term profit potential and seem to be very patient in waiting to receive the expected profit and as profitablity increases am pleased but when technical signals occur which tells me the trend or momentum has weaked, I keep the positive expectation in mind and go through a drawdown of that moderately profitable position.
I know trading experience that the markets movement is not alway linear and has oscillations that generally must occur for the markets to decline further or increase further.

I have thought about just taking the more sure shortterm profit, being realistic in the moment and then look for another opportunity or just setting a percentage gain on account such as if I get a 5-10 increase in margin at risk to set a stop and if it gets hit I'm out with a very respectable profit and move on. Or to set an arbitrary 50% limit in open trade equity and try to trail that and be done with it.

actual trade example from last night.

Sold USDJPY and had a a maximum open equity of 700 which represented about a 25% gain on margin at risk. The market didn't resume its downtrend and on news, which I was unaware of, rocketed ( i say rocketed but it was over the course of 2hours! ) and I covered my short with only a $135.00 profit, due to not actively managing the trade other than putting in a breakeven stop due to watching fib levels not hold and then marketing out of the position because I wanted something to show for my 3 hour efforts.

Masterchanger · Feb 16, 2010

at the time everything looked ok here, but what may have contributed to my poor trade management was fatigue, I was physically tired but in the middle of the trade and I was looking for the 88 level ultimately, which would have been a profit of about 5K.

Masterchanger · Feb 16, 2010

This mornings USDJPY trading went well, took a small loss when a trade didin't work out (-7000 yen) and the second trade risk was actively managed as was open equity resulting in a net gain of (53,100 yen). This trading differed in that I didn't have a longterm short pattern to lean against and give me confidence in the shortterm trade done early this am. The trading in the later morning which resulted in gains was a shorterm( based on intraday news) trend following play.

Mind Money and Markets

Masterchanger

dandxg

Pension_Admin

Attachments

Masterchanger

dandxg

nutmeg

Masterchanger

Attachments

Masterchanger

Attachments

Masterchanger

Attachments