The Key to Trading Well
- Thread starter jreynolds212
- Start date
GOOD EYE
:eek:
Probably every cat can locate the latch of a cage, however only a few are able to unlock it.
This is what they will try and tell you. It's called the psychology of trading. Which I disagree with. I believe trading is
60% system
30% Money management
10% psychology
Think about it .. Once you have a system that you've back tested and understand it's capabilities and limitations, Where's the psychology?
I) based on your trading system you know when to enter a position.
II) You automatically place your stop immediately after entering the position
so the risk/ loss is already defined.
III) The only thing left to do now is to manage the profit , assuming the position should move in your favor. This is the psychology of trading or the BIG greed factor.
I hope this example clearly shows you that the most important thing you need in trading is a winning system and the discipline to follow that system.
Van Tharp and others stress it's all about the pschology because that's what sells. You can search yourself up and down mentally trying to improve your defects of character but it won't help you develop a system or method.
Unfortunately this takes hour and hours of work back testing and future testing etc... as everybody knows Trading Without a system is like trying to drive a car without a map.
Trade wisely,
322170
This is what they will try and tell you. It's called the psychology of trading. Which I disagree with. I believe trading is
60% system
30% Money management
10% psychology
Think about it .. Once you have a system that you've back tested and understand it's capabilities and limitations, Where's the psychology?
I) based on your trading system you know when to enter a position.
II) You automatically place your stop immediately after entering the position
so the risk/ loss is already defined.
III) The only thing left to do now is to manage the profit , assuming the position should move in your favor. This is the psychology of trading or the BIG greed factor.
I hope this example clearly shows you that the most important thing you need in trading is a winning system and the discipline to follow that system.
Van Tharp and others stress it's all about the pschology because that's what sells. You can search yourself up and down mentally trying to improve your defects of character but it won't help you develop a system or method.
Unfortunately this takes hour and hours of work back testing and future testing etc... as everybody knows Trading Without a system is like trying to drive a car without a map.
Trade wisely,
322170
Quote from NQscalper:
Excellent point! This so called latch changes its position on a day to day and sometimes minute to minute bases. Volitility increases and decreases, psychology shifts instantly, one second you're buying dips, next selling rallies. One second the world is ending, the next,happy days are here again. The poor pussy might need a kitty mental hospital if he keeps looking for that latch. Sometimes I think its easier to forget the latch and just stay in the cage till your master (the market in this case) comes home and decides to feed you.
Psychologically, it helps me to think that the market's only job is to fake me out, lead me down the garden path, and separate me from my money. It is my job to stay strong, focused and disciplined and beat it at its own game.
Douglas' book "Trading in the Zone" says don't develop an adversarial relationship with the market, but I think that's bologna. There's a lot of people out there trying to take your money. You have to take theirs instead.