Psychology in Trading
- Thread starter Cesko
- Start date
Have you ever heard of sports psychologists?
Those who compete for a living, who win and lose frequently, need constant work on their psyche as much as they do on their body.
If professional athletes say that success in competition is 90% mental, what is the value of mental and emotional conditioning for a trader?
Priceless....
If you haven't given 80% of your time to the psychological aspect of trading, quit now.
O777, I know this, I compete in shooting sports ('sport pistol 25 meters').
I have been through the mental conditioning to think like a
winner all my life.
What I'm looking for is actual examples applied to trading.
How do those traders considering psychology is important in their trading work on their psyche ?
What to look for exactly ?
What are these excercises from DrTharp book's exactly.
For now, I cant think of anything specific or helpful for trading...
OHLC
I have been through the mental conditioning to think like a
winner all my life.
What I'm looking for is actual examples applied to trading.
How do those traders considering psychology is important in their trading work on their psyche ?
What to look for exactly ?
What are these excercises from DrTharp book's exactly.
For now, I cant think of anything specific or helpful for trading...
OHLC
I don't know about Tharp's work.
I have heard of a master psychologist who specializes in treating traders. Word is that he has done wonders with helping traders devolop the right type of psychological state to get into, and stay in the "zone."
I don't have contact info or his fees, and don't know if he is published, but I do know his name:
Dr. Donald Bright....
I covered this about 600 posts ago for a week or 2 but those threads are so buried it's probably best to just state some of the same things again.
For different people different things work.
Someone else said above he would rather do hypnosis than a bunch of exercises.
If you have a serious belief that is affecting your trading it will cause some problems. Different things work for different people, the key is to take many different steps and approaches to working on your personal problems.
Let me give an example
There is a poster on this board (who I won't name) that is posting a journal. The thread is quite long and the trader is struggling a lot.
Everyone has offered him advice of what to do............trading wise
Yet nobody has really stated what he really needs to work on.
HIMSELF
One of the guys in my office had asked him "What are you doing to work on yourself?"
He started talking about how he would study charts each night for a few hours.
It was then stated " that's not what I asked you!" What are you doing to work on yourself? " The mental aspect was what he was referring to"
Our poster said he has read a few books.. and that's all he needs.
This is one of the most negative people you will ever met. You should have seen this guy. He would complain about everything, everything goes wrong for him, he seems to blame the specialist, the software, his computer, his back.........yet nothing about what he does...is the reason things go wrong.
He has made comments to a few of us in the office. " THE MARKET IS OUT TO GET ME."
Someone commented about what Ed Seykota had said in Market Wizards. People get out of the market what they want.
His comment was "THAT'S BULL SH*T!!!!!!!!!!!!!!!!!!!! I DON"T TRADE TO LOSE MONEY!!
This same guy would cuss and scream in our quiet, pleasant office, everyone but him was making money in the office. Yet he didn't want to do what we were doing.
He wanted to trade SPY even though nobody in our office makes money with it.
let me give you a few quotes from his thread....that nobody has really paid attention to.
"I also feel that I am too cautious (timid, meek, afraid of taking a loss) so I am not jumping on what I perceive to be good plays."
but I make a lousy student. Incredibly hard headed.
SPY trades were strictly head up my *** for the most part
no charts tonight.. spending my time trying to decipher what the heck is WRONG with my thinking.
I have a business plan.
Buy breakouts, sell breakouts, fade breakdowns, sell breakdowns, buy retracement, never buy retracement. Buy the HOD.. NEVER buy the HOD. Don't sell new lows, unless it is a breakdown of the LOD, at which time you should buy.
(notice each rule is followed by the exact opposite making that rule useless )
So if anybody has some specific advice, that is, "watch for this and do this, it generally works" , then I am all ears.
Otherwise don't tell me I need to follow some rules, cause I have plenty to follow already. I follow them and get in a trade in accordance with all the rules.
(we have yet to see those rules)
nobody commented on this ...........trust me
he wasn't joking
Actually I KNOW that the market is watching and waiting, just panting after my lousy 100 shares.
Can anybody tell this guy likes to be a victim? He sure is enjoying all the sympathy from you guys, yet is hard headed enough to not want to change so that he can continue being a victim.
He has a very negative attitude towards life in general. He has a lot of beliefs and none of them are the beliefs of a top notch trader.
I imagine that quite a few things have happened to him in the past that have helped formed these beliefs. He now has filters to only see the negative in life.
Now so that I'm not thought of as arrogant or anything I'll bring you my story of how I've been working on myself. I'm not above anybody and have been traveling on a long road while working on me.
My first experience with working on myself was with that Peak performance Course. It was talked about in some other threads, and you'll notice the posters who didn't like it. HAVE NEVER READ IT. hmmm. They judged it by it's price
My biggest lesson I got from the course was that I'm responsible for my own results. Everything in my world is a product of me and when I take responsibility I can learn from my mistakes. This was a huge step for me.
Can't say what others will gain that was my gem.
I've done a ton of work in my head. I'll comment on the first thing I worked on....
I used to be really quiet. REALLY QUIET.
If you spoke to me. You'd hear yes, no , maybe, I don't know. That's it from my mouth. Even open ended questions......
This response came from a belief of "I can get severely punished if I say the wrong thing"
Now I think you can imagine what a belief like that would bring since the majority of you don't hold this belief.
The problem with working on beliefs is that you accept this as your reality and you will do EVERYTHING to protect your "box"
even send an airplane through the World Trade Center if your belief is strong enough.
Now I formed this belief when I was about 7 yrs old. I had sucked my thumb too long while my teeth were coming in. This caused me to have really bucked teeth. My teeth wouldn't allow me to close my lips properly so that I also had a speech impediment.
Now I got braces to fix my teeth...and have relearned to speak correctly without an impediment.
The problem lies in me relearning to speak correctly. You see... My mother is a teacher, AND a speech therapist. The 2nd one is the problem. She would correct me non-stop over and over and over and over and over again. Well one day she had corrected me in a sentence over 7 times.
I had a fit, since I wasn't even allowed to communicate my point.
That fit.........got me severely punished. and hence my belief.
On the poster above........can you see a few belief's I've pointed out now that will never allow him to be a successful trader unless he can new beliefs.
To be continued....
Thanks much for this post RTharp(Robert).
Although I need to analyze it further, I think I'm grasping something new...
Now, you got me scared with the following, seems like you described me :eek:
>>>>>
I used to be really quiet. REALLY QUIET.
If you spoke to me. You'd hear yes, no , maybe, I don't know. That's it from my mouth. Even open ended questions
>>>>>
OHLC
Although I need to analyze it further, I think I'm grasping something new...
Now, you got me scared with the following, seems like you described me :eek:
>>>>>
I used to be really quiet. REALLY QUIET.
If you spoke to me. You'd hear yes, no , maybe, I don't know. That's it from my mouth. Even open ended questions
>>>>>
OHLC
Ahhh... how did the course help me?
rTharp has most of the topics covered so I don't have much to say... also when I'm writing this, he mentions about to be continued.... so I might write about what he wrote...
Well, yes you need to know yourself. Eventually, it's the trader who makes money not the system. Regardless of having a automated order entry software, you are trading the system. It's just that your process of trading is done by computers. Also, you decided to put it all automated. You had the choice of going automated or not. So you did trade, the difference is you are trading the system not the market.
Why is psychology so important? Here's an analogy:
You drive to work everyday. You hate it. You drive to your girlfriend's house. You like it.
You're doing the same thing... driving but the psychology is different. Here's another one:
You drive to work. You like it because you just like your work, it's payday, or there's a cute girl at your work. You drive to your girlfriend's house. You hate it because she gives you a lot of crap, in a fight with her, or her parents are there.
Same thing.
Another example: There's two people with the same ability. Both wants to be a trader, they go into a prop firm to learn how to trade. One wants to become a professional, the other one likes a girl at that work. Who's going to most likely succeed? One who wants to be a professional.
Last analogy:
Two people don't have a job, they also have the ability. They both need to get one by the end of the month. One guy goes out and walks into firms for a job, networks and sends faxes or mail. Another guy stays home, sends E-mail on monster.com and watches TV all day waiting for a reply. Who is most likely to get a job. The guy on foot.
rTharp has most of the topics covered so I don't have much to say... also when I'm writing this, he mentions about to be continued.... so I might write about what he wrote...
Well, yes you need to know yourself. Eventually, it's the trader who makes money not the system. Regardless of having a automated order entry software, you are trading the system. It's just that your process of trading is done by computers. Also, you decided to put it all automated. You had the choice of going automated or not. So you did trade, the difference is you are trading the system not the market.
Why is psychology so important? Here's an analogy:
You drive to work everyday. You hate it. You drive to your girlfriend's house. You like it.
You're doing the same thing... driving but the psychology is different. Here's another one:
You drive to work. You like it because you just like your work, it's payday, or there's a cute girl at your work. You drive to your girlfriend's house. You hate it because she gives you a lot of crap, in a fight with her, or her parents are there.
Same thing.
Another example: There's two people with the same ability. Both wants to be a trader, they go into a prop firm to learn how to trade. One wants to become a professional, the other one likes a girl at that work. Who's going to most likely succeed? One who wants to be a professional.
Last analogy:
Two people don't have a job, they also have the ability. They both need to get one by the end of the month. One guy goes out and walks into firms for a job, networks and sends faxes or mail. Another guy stays home, sends E-mail on monster.com and watches TV all day waiting for a reply. Who is most likely to get a job. The guy on foot.
After rereading these two posts (RTharp and WD Gann), I'm still left wondering...
Psychology can influence someone's trading, just like psychology can influence someone's performance in competitive sports, for example.
But how can someone identify that a problem with his/her trading relates to something wrong with his/her psyche ?
How to identify that something wrong is a psy issue, instead of a technical issue ?
Can there be some undiscovered psy issues, that appear only while trading, and not in general life ?
What do to research on this ?
OHLC
Psychology can influence someone's trading, just like psychology can influence someone's performance in competitive sports, for example.
But how can someone identify that a problem with his/her trading relates to something wrong with his/her psyche ?
How to identify that something wrong is a psy issue, instead of a technical issue ?
Can there be some undiscovered psy issues, that appear only while trading, and not in general life ?
What do to research on this ?
OHLC