Another great and entertaining ("Hail Mary trade") article related to psychology, but once again referring only to discretionary trading (now I see why we had all those misunderstandings - everyone talking about "psychology and trading" just assumes we're talking about discretionary trading):
http://www.trade2win.com/knowledge/articles/general_articles/trading-on-borrowed-time-two/
This article reminds me of myself, when, as a discretionary trader, I was writing tons of rules to follow (by the way, he lists too many, but I guess it's unavoidable with discretionary trading), rules that I never managed to follow all at once anyway. First of all, because I didn't trust the rules themselves, as I explained in my first post on this thread. Just because today using a stoploss would have saved you, it doesn't mean the stoploss will always save you. Just because letting profits run would have worked today, it doesn't mean you should make it a permanent rule, because maybe tomorrow you will lose all your profits and so on. Basically our brain and memory are not good enough to process all our trading experience and stats in our head, and so our "rough estimates" will not be good enough to get an idea of what works (for most of us), and so we will never know what works and what doesn't, and all those lists we will write will be useless, and misleading. Or better, this is just my own experience. My rough estimates were bad, and I never figured out what worked. Congratulations to the few who succeed and who can compute in their heads all the stats and find out what works and what doesn't - I can't do it, and I must use Tradestation to find out what strategy works, and automated trading to implement that strategy (without hesitation, with the needed patience, and without losing my eyesight). That's why I abandoned discretionary trading, where you can't back-test anything and cannot therefore find out with the necessary precision what works and what doesn't.
Feel free to ignore these posts. I keep repeating the same things over and over again in all my posts, and they get clearer and clearer (in my head, and in my posts). I write them down, so to remind myself, out loud, what's good and what is bad.
