Quote from 322170:
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
