Psychology in Trading

Originally posted by andrewh
The best way I can describe this from personal experience is playing a musical instrument. At first you believe it is all about reading music, knowing the notes, chords, scales, and to a certain extent it is. However, if you work hard enough you can reach a state of "fluency", where you do not even consider the forms anymore, the music just "flows" - you do not forget the mountains of technical data, you just dont need to consciously "think" about it any more.

I see trading as very similar to this, you never forget all the technial studies, the statistics etc, it is just you become so proficient you can "see" the whole picture, and can just react to the market..... all the technical information is just processed automatically....
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Spend ten years practicing a craft and then forget everything and just do it...

Music is another excellent analogy!

Imagine for a second that Jimi took a step back and said "hey what is everybody else doing? Thats how I want to do it!".

Or imagine Miles taking a step back and saying "OK, Bird and Dizzy are doing it this way and I love their music, so that is what I will do!"

Miles spent years learning the "technicals" of music and then forgot everything and let his own unique authentic style come through!

I could never in a million years conceptualize exactly what got me into my morning play today. My gut (Which is highly educated thru years of practice) simply felt it and I had the courage to act on it! After that it was just a matter of managing the position well and letting the sacred geometry of chance ---> lead her dance!

PEACE and good trading, ----> and excellent post andre
Commisso
 
This is the whole point - to be GREAT, you have to have very individual thinking. You can study the music of Jimi Hendrix all you like, you may or may not be eventually able to play somewhat like him, but the great musician would focus from day one on becoming the best HE possibly can be....

Trading is the same.

Just my humble opinion of course....
 
Originally posted by andrewh


I see trading as very similar to this, you never forget all the technial studies, the statistics etc, it is just you become so proficient you can "see" the whole picture, and can just react to the market..... all the technical information is just processed automatically....
More...

"Fishing baskets are employed to catch fish, but once the fish are got ----> the baskets are forgotten" ~Chuang Tzu~
 
Let's say you are at a point where you have just realized a psychological issue of yours. Now what can you do to remedy this certain belief or habit?

I'm getting ready to start trading again here shortly. I'm working on my trading plan, and playing games (gambling) which I felt would improve my mental discipline. I'm doing well in all things and feeling great. I'm learning more and more about trading and even the psychological aspects. I even implemented them to gambling, and I'm doing well psychologically and making money, and then something happened. I realized that I'm not as strong as I thought I was. I encountered both fear and greed, and it knocked the wind out of me. Ok, so I'm not as strong as I thought I was. I've realized that I have fear and greed about making and losing money.

I know these are caused by beliefs that I have created myself. I just don't have a clue where I created them from. How shall one begin to overcome fear and greed? Any of you guys encounter them, and how did you overcome them?

thanks,
Andy
 
Originally posted by andrewh
This is the whole point - to be GREAT, you have to have very individual thinking. You can study the music of Jimi Hendrix all you like, you may or may not be eventually able to play somewhat like him, but the great musician would focus from day one on becoming the best HE possibly can be....

Trading is the same.

Just my humble opinion of course....
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I have a few questions to andrewh. I agree with the context you have written, but I have a few doubt about how you approached the matter.

Yes, you have to be individual thinking. But were you thinking individually before trading? How did you come up with the idea that you have to be individual? Yes, your style is important but you also need to remember that your style has come from someone else. Someone wrote a book that taught you the style you came up with. Someone prior to you was trading prior to you who was successful. How individual is that?

I can study Jimi Hendrix all my life. OK, but I know I won't. It's like saying money isn't worth anything in life. There is a process in life which makes you say that. If a rich guy says it, it makes sense. If a poor guy says it, it's just rant / whine. Also, because you studied Jimi Hendrix, you can say I will play guitar my own way. You have some musical background... when you learned to play didn't you play other's music. Then you found your playing style.

So is this a focus from day one, NO. It's a gradual process that leads to becoming a independent trader. Don't you try to duplicate something first, then you get doubts and questions. I've gone through that with Gann and Paul Tudor Jones, trying to be like these guys. Do you like the book Market Wizard? I like it because it gave me a goal of trying the become like one of them. Isn't most people thinking the same way? Trying to be someone is needed as part of the process.
 
Like I said it was just my opinion, if I set out to do something I just try to breakout it down to base principles, and develop my own ideas.

I just think it may be helpful for some people on this board to take a step back and try to think this way, hence the reason for my posts.

Sorry if you dont want to believe that....
 
As I mentioned first, I agree with you. But the approach.

You're talking from where you are right now. I do the same thing too when I start writing a system. I come up with a concept and put it in a system. But that's from where you are at this point and where I am at this point.

There was process of thinking the way you do, and the way I do. It's like teaching Kindergarden kid how to do Quantum Physics. You can't deny the fact that you started from 1+1=2.
 
Originally posted by WDGann
As I mentioned first, I agree with you. But the approach.

You're talking from where you are right now. I do the same thing too when I start writing a system. I come up with a concept and put it in a system. But that's from where you are at this point and where I am at this point.

There was process of thinking the way you do, and the way I do. It's like teaching Kindergarden kid how to do Quantum Physics. You can't deny the fact that you started from 1+1=2.
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WDGann,

You are absolutely correct...
 
Originally posted by Andy62279
Let's say you are at a point where you have just realized a psychological issue of yours. Now what can you do to remedy this certain belief or habit?

I'm getting ready to start trading again here shortly. I'm working on my trading plan, and playing games (gambling) which I felt would improve my mental discipline. I'm doing well in all things and feeling great. I'm learning more and more about trading and even the psychological aspects. I even implemented them to gambling, and I'm doing well psychologically and making money, and then something happened. I realized that I'm not as strong as I thought I was. I encountered both fear and greed, and it knocked the wind out of me. Ok, so I'm not as strong as I thought I was. I've realized that I have fear and greed about making and losing money.

I know these are caused by beliefs that I have created myself. I just don't have a clue where I created them from. How shall one begin to overcome fear and greed? Any of you guys encounter them, and how did you overcome them?

thanks,
Andy
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First, I think rTharp can answer your question the best. He's got more tools in the shed than I have with what you can do. Still, I have a few questions.

Can I ask you what kind of a trader you want to be? Can you give me "your" opinion of what an ideal trader is? How detailed is this ideal if you have one?

Where are you as a trader? How much difference is the ideal trader and trader, you are now?

Please don't give me childish ideals like I want to foresee the future or have psychic views. A realistic ideals.
 
Originally posted by J_Commisso


Hmmmm, personally Rob I think if a trader is to reach his true potential it is paramount that he find his own "voice"...

I have never been able to walk in someone else's shoes when it comes to trading...
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You wrote this in reply to RTharp's comment that he found a system that worked and then applied it.

Comisso, if you have never been able to "walk in someone else's shoes when it comes to trading", it might be because you only emulated their "outward" (for want of a better term) actions. However, to fully walk in that person's shoes you also need to emulate their belief systems; the way they think. Only then can you fully understand and replicate the behavior congruently.

Choosing to act and think like a role model you select (be it in trading, sport, business - anything) doesn't mean that you become a mindless zombie who can no longer think for himself, ...rather you are simply adopting beliefs that, through the trial and error of others, have proven themselves beneficial
 
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