I'm still a struggling (but consistently improving) trader, but I've never really gotten the whole "trader psychology" thing. Much of it seems painfully obvious and most of the "problems", usually emotional, can be fixed w/the oft-repeated mantra "Plan the Trade, Trade the Plan." It's a cliche but cliche's often become such because they are rock-solid truth. So if one has certain criteria for entries - the setups - and a price target - the exits - and a protective stop w/a risk/reward ratio one is comfortable with, and one determines how to manage the trade once taken - scaling in/out, trailing stops, or taking profits at predetermined levels - and if all this is in place before the trade is even taken, where/how does emotion come into play? Where is the psychology that there is so much blah-blah about? Of course a plan must be refined, adjusted, but not while actually in the trade, and only after some basic statistics have been built up over a number of trades.
The thing I read most often is about trouble "sticking to the plan", but it seems just so much psycho-babble. Isn't it obvious that if one has a big winner - hurrah! - but this occurred by deviating from one's plan, then it wasn't a professional trade but rather simply luck and circumstance? The point is to be consistent - consistently - otherwise you're all over the map and you'll never find your way. Again, it just seems so obvious.
And then there's Fear and Greed, Fear and Greed, Fear and Greed! If I read that one more time I'm going to puke. If one enters a trade w/a pre-determined stop in place, where is the Fear? How can there be Fear? Fear that you're too much of a pussy to take the stop? Then make it a hard stop, your broker will do it for it you. If you have an honest broker there's no doubt they'll take it, little missy. Greed? I'm as greedy as the next trader, but my broker allows a Profit Target and I use it. It's like the motto for the George Foreman Grill - "Set it and forget it." If one misses a bigger move, so be it - if it happens consistently, ok, then one adjusts one's plan, perhaps to allow for the occasional homerun.
The Trading Plan should be a living, breathing, ever-evolving entity, until one is consistently building that equity curve. All adjustments are made between trades, not during. Again I ask, what's the problem w/that? If all the decisions have been made before the trade even takes place, where do emotion and psychology play any part during the trade? No place.
Ironically, it seems to me that the ultimate goal of "trading psychology" should be to completely remove psychology from the equation.
Harold
The thing I read most often is about trouble "sticking to the plan", but it seems just so much psycho-babble. Isn't it obvious that if one has a big winner - hurrah! - but this occurred by deviating from one's plan, then it wasn't a professional trade but rather simply luck and circumstance? The point is to be consistent - consistently - otherwise you're all over the map and you'll never find your way. Again, it just seems so obvious.
And then there's Fear and Greed, Fear and Greed, Fear and Greed! If I read that one more time I'm going to puke. If one enters a trade w/a pre-determined stop in place, where is the Fear? How can there be Fear? Fear that you're too much of a pussy to take the stop? Then make it a hard stop, your broker will do it for it you. If you have an honest broker there's no doubt they'll take it, little missy. Greed? I'm as greedy as the next trader, but my broker allows a Profit Target and I use it. It's like the motto for the George Foreman Grill - "Set it and forget it." If one misses a bigger move, so be it - if it happens consistently, ok, then one adjusts one's plan, perhaps to allow for the occasional homerun.
The Trading Plan should be a living, breathing, ever-evolving entity, until one is consistently building that equity curve. All adjustments are made between trades, not during. Again I ask, what's the problem w/that? If all the decisions have been made before the trade even takes place, where do emotion and psychology play any part during the trade? No place.
Ironically, it seems to me that the ultimate goal of "trading psychology" should be to completely remove psychology from the equation.
Harold