Quote from BPtrader:
For God's sake, travis, if there is only one person who disagrees with the OP, it should be you.
According to your own admission, you have struggled for 12 years as a trader. TWELVE LONG YEARS!
After 12 years, you start to claim that psychology is not important.
How can you agree with the OP?
What kind of misleading signal are you sending to other traders?
Well, as before, we're discussing about the terms we use and semantics here. It's unavoidable. But since we acknowledge each other's good faith, we can keep on debating this. (I mean: I am glad you didn't say that I am "lying" or similar).
As you know, I gave up as a discretionary trader and became an automated trader. And I started making money the day I became an automated trader - on day one. Whereas, on the other hand, twelve years as a discretionary trader for me were not enough to become profitable. (In my opinion) this happened because with automated trading, in order to start, you must first find a univocal set of rules that makes money. With discretionary trading, instead, you could fool yourself for years (I did for 12 years), thinking you have a profitable "method" and yet never back-testing it, because, since the method is "discretionary" and therefore not a univocal set of rules, you can't back-test it.
Now, if you have a perfectly clear and univocal set of rules that are profitable (as is the case with automated trading), what room is there for your decisions? Zero. And if there is no room for decisions, then also all doubts are gone. So in my case it couldn't be clearer that psychology is not an issue. So I subscribe once again to:
"If you trust your strategies, there is no room for thinking or doubts".
But I am now reminded that most people are NOT automated traders, and this may be the cause of our misunderstanding - that I was just speaking for myself (from an automated trader's point of view), rather than for everyone. And at the same time I made it sound like I was describing rules that apply to everyone - I apologize for this mistake.
For discretionary traders, it is different. Initially, I was thinking that also for discretionary traders, once they have a proven profitable method - what room is there for doubts? But then one wonders: how can a discretionary method be "proven to be profitable" if it is discretionary and therefore subject to improvisation? It's not actually even a "method". This raises some doubts, and the whole problem is this - if a discretionary trader does not have a univocal set of rules to follow at all times, then psychology becomes important.
So let's state and summarize everything all over again, because I changed my mind as I was writing this post.
For automated trading psychology basically IS NOT needed, because the rules to follow are univocal. For discretionary trading, psychology IS needed, because the rules to follow are flexible, subject to interpretation.
However, if you put paper trading into the picture (using it until you become profitable as a discretionary trader), then the psychological stress decreases very much even on the discretionary trader. And, regarding this, as I said days ago, one good psychological question to ask ourselves is: "why do we trade with real money when we are not yet profitable as discretionary traders?". Indeed, I am still wondering why I traded for so many years with real money when the past spoke clearly and said "you don't have a profitable method yet". I felt like the profitable method was always around the corner, like the mistake I had just made was the last one. Maybe that's why.