I found self sabotage the biggest challenge i had to overcome, on the road to consistent profits, when i truly understood emotional risk management and self analysis, my profits soarded. Trading in a peak state also helped a great deal. How important is emotional control and being able to trade in a peak state?
The most common psycholgical challenge people encounter when trading
- Thread starter MartinT
- Start date
It's important but you don't need to consistently be at some peak state or at your best.
You just need to be at a level where you can apply your method and exploit your interaction with the markets.
Another way to look at it...
Be ready to trade when its a critical trade.
However, I'm not suggesting that there are trades when its OK to not be mentally ready to trade.
I'm suggesting that we cannot seek perfection in our trading...to do such (attempt perfection) may prevent us from being as profitable as we should be.
Mark
I'd agree seeking perfection in anything will only end in disappointment. Would you elaborate on what you feel is an appropriate state to be trading in. Do you think when researching a new possible position and triggering a trade you must give yourself every opportunity of being correct, which may involve a state change or to phrase it differently becoming switched on? Thanks Martin
I became an NLP Master Practitioner (Neuro Linguistic programming) I then become aware of the messages my emotions were giving me, rather than spiralling into procrastinaton. I also had the skills to interview and model myself on a very successful ex-floor trader. Since I've implemented my new skills i have achieved consistent profits.
Great! Let's talk about it !..if you are not here to sell your NLP services in a ET forum...
I've worked along side many traders, and I'd say in order of Psych problems:
1) pulling the trigger
2) chasing markets after not pulling the trigger when required in the first place. Gives crappy entries.
3) Immediately over trading after a loss to make it back. usually results in disaster. This is usually just with traders without much experience though.
For the few system traders I know, it has to be following the system, or anticipating it. They make a ton of money paper trading, but for some reason can't take the signals when live. I can't really relate to ths one however as I am a discretionary trader. Always have been.
1) pulling the trigger
2) chasing markets after not pulling the trigger when required in the first place. Gives crappy entries.
3) Immediately over trading after a loss to make it back. usually results in disaster. This is usually just with traders without much experience though.
For the few system traders I know, it has to be following the system, or anticipating it. They make a ton of money paper trading, but for some reason can't take the signals when live. I can't really relate to ths one however as I am a discretionary trader. Always have been.
Martin you are new here, welcome. Just be VERY careful not to try and sell anything on here if you are not a sponsor. Not only will you be ridiculed to the max but most likely banned as well. That being said, I'd be interested in hearing more about your experiences.
Biggest psychological obstacle for me?
Buying stocks at new highs, and especially when they've had a 100 or 200% run.
Classic example of this for me is Mastercard. I could have bought it at $60, after it ran up from $40 at its IPO.
Well, I didn't. I said to myself: "Self, I'll be damned if I'm buying a stock that has run up 50% in 3 months."
It's at $109 today. Will I buy it now? Good question.
If you're going to make large $$$, not being willing to purchase stocks making new all times highs can keep you penned in to conservative, value stocks, that rarely have outsized performance.
Buying stocks at new highs, and especially when they've had a 100 or 200% run.
Classic example of this for me is Mastercard. I could have bought it at $60, after it ran up from $40 at its IPO.
Well, I didn't. I said to myself: "Self, I'll be damned if I'm buying a stock that has run up 50% in 3 months."
It's at $109 today. Will I buy it now? Good question.
If you're going to make large $$$, not being willing to purchase stocks making new all times highs can keep you penned in to conservative, value stocks, that rarely have outsized performance.