Psychology in Trading

Originally posted by Andy62279
For myself, yes I do want money. Why else did I get interested in trading in the first place? From what I've learned, I thought in order to make a lot of money you have to lose attachment with money.

From what I have learned in golf as well as books on trading, this is what I believe on trading. If I want a great growth in my account, I cannot think about what the account is going to be, but take things one trade at a time.

Andy
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Don't trade one trade at a time. Trade your plan. Look at it as a group of trades. That's what expectancy is for, not probability.
 
Let me think over your questions a bit. I mean I haven't thought of them a whole lot, but I think you got something here though. I gotta go too.

andy
 
Originally posted by WDGann
I've been writing other posts and writing about what Commisso wrote so I'll start writing where I left off with my opinion and advice to you.

Let's get the psychology part out for a while. Let's talk about your trade style itself. Can you define what your plan's edge is? Don't give me charts and say I would have traded here, give me a well acceptable reasoning behind the edge that all the people here can accept. In words and numbers. At least have 1/2 people say, "Yeah, it might work" or "Yeah, sounds good."... well, you don't have do that but are you confident about being able to do that. If you are unsure, it might be better to look into your plan more. If you can then I'll get to the next step.

Next step after you think you have the plan is to have control of it. Realistically, test it or go through every market situation you can think of. Looking at how you are right now, would you be able to trade reasonably? Not profitably, reasonably? Yes or No. This is market situation. Not mental state. Think about possibilities of how you would react to the market situation. Don't start with "If I'm greedy then..." rather start from "I went in 30 min. ago at this point from this particular signal... I'm up (or down)... I'd feel greedy... happy..." If your plan uses technicals have a chart in front of you and chronologically follow it. Realistically, considering how you traded before... think how you would have reacted to the run-ups and drawdowns. Wins, losses.

The more realistically you can do this, the more you know about yourself and you can find what you can correct. Then think about what would have been the best mental state for you to do this. This is actually what I do to new guys in the firm. I give them a chart with a moving average on it and ask who they would have traded it. Guys who end-up losers always point out only the profits with the charts. They're like, "Yeah, the moving average is turned around so I'll go in here, ride the trend, get out here. Then the market is consolidating so I won't go into these trades and the market starts trending so I'll go in here."

Guy who are good or become profitable actually state and admit the losing trades too. That's step one... it's getting late so I'll goto step 2 sometime else.
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I've neglected some of the most important things. I haven't put much thought into what my edge may be. I do have an idea, and I thought that's good enough and pressed on. I will put more effort in answering your questions while developing my system. I'll ask myself how I can trade these rules under different situations.

I think one of my edges are being open-minded. I'm at an arrogant age, but I try and listen to others... especially those with more knowledge and experience. So please continue on with the lessons.

I do have a question about money. There was a bit of a disagreement of the attachment of money with trading. Could this be an idiosyncracy? Or is it everything?

thanks,
Andy
 
Please continue posting on the psychology of trading. This thread has been split out from the Van Tharp questions thread in the Resources forum.
 
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