The day to day psychology of a trader

[cornix]

Here's what typically happens: Traders with insufficient capital see the possibility of trading very short term charts with huge amounts of margin for big money and quick safe exits. And so, apply a trade management system that will accomplish one of the goals which is to get out quickly. It doesn't end up making much money though due to the satisfaction of that very goal.

Do you think the problem is too tight risk control then? Getting out of losing trades too early?

 

[smallStops]

Here's what typically happens: Traders with insufficient capital see the possibility of trading very short term charts with huge amounts of margin for big money and quick safe exits. And so, apply a trade management system that will accomplish one of the goals which is to get out quickly. It doesn't end up making much money though due to the satisfaction of that very goal.

Oh well, one example where core psychology/spirituality comes in play.
IF deep down the trader's main issue is safety/security, and the trader believes that the best way to achieve it is to not get exposed to the unsafe environment of the market.

Then indeed : short term charts is best. Agree

This is very subtile understanding of what is really into the trader's mindset.
Now, if a trader was to not up the sizes :
* or the profits will be small
* or the trader will have to be often in the market.

So the only way would be to up the sizes for "quick huge bucks".

Now if the trader is "overcapitalized" ( to take into account greed) , then there is no need to overleverage.

But then the issue of reducing the presence in the market is still there.
In the case of being "overcapitalized", then the trader might develop fears of putting a trade.

 

[Buy1Sell2]

Do you think the problem is too tight risk control then? Getting out of losing trades too early?

Certainly. Trader who is scared and/or under-capitalized places their stops where they are likely to be taken out, because they don't have the capital to place them where they should be.

 

[smallStops]

some people are asking about my "psy" shop fees : Not opened yet!!!!


OK , now , more psychology.

IF you were from a third world country, or from an area where poverty is rife
and millions of people would leave to move to Europe.
Now, you are used as a sosie/look-alike of someone who has terminal disease.
Then as the terminal diseases are as they are ( cancers, etc...), the "original"
person dies. What would you do ?
- do your best to stay in Europe, and do some Ghost Identity Theft
OR
- would you go back to the place where everybody dreams of leaving,
without ensuring you keep the ID that allows you back into Europe?

What is complicated to understand :
the despair of poverty? the dreams of staying in Europe?
Identity theft? or Ghost identity theft?

Now look to traders who are undercapitalized and need to make money:
- overleveraging to make as much money as possible.
But because of the risk, the habits of exiting as quickly as possible , and not holding
the trade for fear of losing profits, can also quicks in.
What is it not to understand : it is normal human psychology due to
undercapitalization.

 

[Buy1Sell2]

Now if the trader is "well-capitalized" , then there is no need to overleverage.

Exactly right. This should be the position that every trader is in. Under-capitalized traders have it backwards. They are the ones that should be in "no margin" situations.

 

[smallStops]

Exactly right. This should be the position that every trader is in. Under-capitalized traders have it backwards. They are the ones that should be in "no margin" situations.

So that leaves :
* making an enormous amount of trades if scalping
OR
* catching mega trends
OR
* trading on highest time frames as possible.

 

[cornix]

Certainly. Trader who is scared and/or under-capitalized places their stops where they are likely to be taken out, because they don't have the capital to place them where they should be.

Which tactics of stop placement do you suggest then, based on your experience?

 

[Buy1Sell2]

Which tactics of stop placement do you suggest then, based on your experience?

Stops should be placed outside the noise as the individual trader sees it, and must also not exceed a loss of 2% of TLNW. That number should be used to determine position size.

 

[smallStops]

It is interesting to be updated on the new funded traders on Topstep!
The instruments they trade, etc. This gives another perspective on their trading.

Just now, Book n°1 is advancing. The patience required is just astronomous:
now when I think of trading, I come to realise that patience patience patience is really key.

No need to take any risks because of impatience.
I wish I had applied this before losing 1,400$ on one of my "side account".
I might do one test on one account : take just one intraday trade per week. And see how
the impatience manifests itself. Actually, as I am on a continous combine, try this on the Combine. That would be demonstrating extreme patience.

Idolatry : this one is just so key. I can read the spirituality of "idolatry" quasi everywhere.
And I realize that each time I have been position-sizing incorrectly, it was due to these
atmosphere of "idolatry" taking form. Something to ponder over the week-end.

 

[smallStops]

It really looks like for once
I am in the right place, at the right moment, doing the right thing : finishing this book!!!!!

For those who want to bet on panick in Cac40 in few weeks time: normally, the "extrême ring party" is going to score big this month. .
A bit of panic to the market.
Now, it is up to you to know which firms will be most impacted.