Trader and Modern Psychoanalyst looks at fear and greed

As far as ET threads go, I just wanted to add my .02 and say that this is by far the best thread I have EVER read here. All the journals and advice and bickering are worthless in the face of true self mastery which is the ONLY key to success in the markets.

As far as all of the emotional and personal connections to the art of trading are concerned, I really believe that Mark Douglas' phenomenal first tome, "The Disciplined Trader" is the be all end all on this subject. I am very convinced that all traders act the way they do because of belief systems that are in place LONG before they ever started trading. I know very well what my own demons are and I can tell you that it didn't take much digging on my own part to easily see that its all part and parcel of the way I was raised and my relationship with money and how my parents perceived it and subsequently imparted their beliefs on me.

As far as the Zen/Eastern philosophy connections to trading are concerned, I could not agree more. Meditation, or any other type of activity which essentially "centers" your mind and makes you more cognizant of the "here and now" as opposed to the past and future, is indispensable when it comes to trading. Meditation really has only ONE goal. That is, to onepointedly focus on the breath, and in doing so, come to the realization that the past and the future ABSOLUTELY DO NOT EXIST AT ALL. Only what is happening right here and now at this very moment is real and worth observing. I have found that this is extremely relevant to daytrading. In daytrading, your opinions will KILL you. For example, (how many of you including myself have fallen victim to this....) The market is chopping around basically sideways, but at each pivot it makes a very subtle higher low. You are shorting it at every turn and losing consistently. WHY? Because you are NOT living in the right here and now, you are living in some fantasy of past or present. It is a fantasy of what you THINK IS GOING TO HAPPEN (which is based on some belief system), rather than an objective analysis of what IS HAPPENING. If you were really centered, then you would just take stock of the situation and conclude that the bias is slightly bullish and take the appropriate stance. But personal opinion (which is nothing but a bull**** memory) comes between you and rational thought.

Meditation is the ONLY way I believe to consistently train ourselves to be in the here and now, which is the optimum state for trading (and for that matter, LIVING).

I sincerely hope that this thread has some life to it and continues to garner more intelligent observations and commentary such as those who have posted before me. Bravo to you all! :p
 
Quote from F. d'Anconia:

As far as ET threads go, I just wanted to add my .02 and say that this is by far the best thread I have EVER read here. All the journals and advice and bickering are worthless in the face of true self mastery which is the ONLY key to success in the markets.

As far as all of the emotional and personal connections to the art of trading are concerned, I really believe that Mark Douglas' phenomenal first tome, "The Disciplined Trader" is the be all end all on this subject. I am very convinced that all traders act the way they do because of belief systems that are in place LONG before they ever started trading. I know very well what my own demons are and I can tell you that it didn't take much digging on my own part to easily see that its all part and parcel of the way I was raised and my relationship with money and how my parents perceived it and subsequently imparted their beliefs on me.

As far as the Zen/Eastern philosophy connections to trading are concerned, I could not agree more. Meditation, or any other type of activity which essentially "centers" your mind and makes you more cognizant of the "here and now" as opposed to the past and future, is indispensable when it comes to trading. Meditation really has only ONE goal. That is, to onepointedly focus on the breath, and in doing so, come to the realization that the past and the future ABSOLUTELY DO NOT EXIST AT ALL. Only what is happening right here and now at this very moment is real and worth observing. I have found that this is extremely relevant to daytrading. In daytrading, your opinions will KILL you. For example, (how many of you including myself have fallen victim to this....) The market is chopping around basically sideways, but at each pivot it makes a very subtle higher low. You are shorting it at every turn and losing consistently. WHY? Because you are NOT living in the right here and now, you are living in some fantasy of past or present. It is a fantasy of what you THINK IS GOING TO HAPPEN (which is based on some belief system), rather than an objective analysis of what IS HAPPENING. If you were really centered, then you would just take stock of the situation and conclude that the bias is slightly bullish and take the appropriate stance. But personal opinion (which is nothing but a bull**** memory) comes between you and rational thought.

Meditation is the ONLY way I believe to consistently train ourselves to be in the here and now, which is the optimum state for trading (and for that matter, LIVING).

I sincerely hope that this thread has some life to it and continues to garner more intelligent observations and commentary such as those who have posted before me. Bravo to you all! :p
More...

I am really glad to hear someone mention meditation in these terms of mental state via fellow trader. I have learned the correct way to meditate through an exercise routine( not yoga ) that has a very limited cult following in Japan and proved it to be significant through my martial arts, both in Aikido and Karate. Unfortunately, it's unknown to Americans but... anyways...

Meditation is one of the greatest ways to train your mind. It's very hard, though. For a regular book reader without resources it's hard to get in track because of what Westerners percieve meditation as. As a matter of fact Hermetics, disregarding the occultistic objectivity, try to acheive the same as a Far Eastern Zen mind, following to the Chinese Occult, of Ba gua and etc.

Meditation is not about "Think you are in a very pleasant place... You are relaxed... blah blah blah" that uses hyponotic techniques under a trance state of relaxation. It's about clarity of reality.

As an example, you "sense" the breathing of your own. But then you start "sensing" the pivot between the breathing in and out. The state in which you are breathing neutral(the state in which you are not breathing...) and "sensing" it causes yourself to be abandoned from the "breathing" to a more deeper sensuality of "breathing". It causes your "perception" to be released from the "breathing"....

It's another mental technique that helps you from perceptionally zoning yourself....

Anyways... what's more important is how you control your mental state ( aka how you bring apon yourself through will ) the state of Zen and centered mind.
 
While far from being and expert on meditation, I have meditated. I do not believe that meditation is the same as the zone that one achieves in dynamic sports such as skiing, racing or surfing. I was wondering if others agree.

For example I would meditate during change overs or between matches in tennis. That place, calmness, stillness, focus, awarness, was part of the zone, I thought it was an inferior experience to the zone I got in dynamic sports. Of course, I would like to hear what a martial artist might say about combat versus practicing the katas (spelling) and their related zones.
 
Quote from jem:

While far from being and expert on meditation, I have meditated. I do not believe that meditation is the same as the zone that one achieves in dynamic sports such as skiing, racing or surfing. I was wondering if others agree.

For example I would meditate during change overs or between matches in tennis. That place, calmness, stillness, focus, awarness, was part of the zone, I thought it was an inferior experience to the zone I got in dynamic sports. Of course, I would like to hear what a martial artist might say about combat versus practicing the katas (spelling) and their related zones.
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All katas, basic training, and sparring etc. etc. has to be done unemotionally. It gives me a little laugh when I hear American karate instructors teaching the students to image anger or aggression during practice.

Step 1: Basic training teaches you basic ways to move your body. Not building your body but more about how to use it.

Step 2: You take the body mechanics learned during basics and learn to coordinate under katas. That's pretty much all.

Step 3: You spar with people while maintaining the body mechanics. If that is done well, you just react via coordination. You really don't have time to think and decide what you do when someone's trying to attack you or even while you're attacking. You just have a mode of defense or offense and you're just moving / reacting to the situation.
 
I just wanted to add that Zen kinda mind... or flow and zoning is nothing special. We do it all the time.

For example, let's say you're reading a book. It doesn't really matter what you're reading, or a good example would be posts in ET.

While you're reading it, you first start by grasping the content of the post... soon, while you're reading, you get opinions of the content. You're still continuing to read it in first person but have a critisizing third person.

Or even when you're talking to people. Don't you have a zoning out while you're talking, thinking "Shit, I shouldn't have said that" or "Hey, I actually didn't realize it till I said it... I'm pretty smart..."

It's nothing special. It's just a matter of degree.

In another words, everyone has and does think in gender of me and I. It's a matter of being accustomed to the specific task you are zoning in.
 
Quote from electron:



May I know why? What singles him out?
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Hrmm... why is because he is one of the few people I want to be like. Actually, the only Westerner that I seek to be like. I want to express myself in ways like him, in my own terms. There are others but they're very unknown and not mentioned in English books.

Seriously, flow and zone is nothing special. How well do you pick up a mug of coffee? Do you miss holding one up? The difference is the underlying objectivity... Trading isn't a psychological thing... it's all about doing it. Once you start thinking it's psychological, then you tend to step away from the point.

Is taking a piss or a dump psychological? Is drinking a can of beer psychological? Is walking to the liquor store for some Zig-Zags psychological???? It becomes psychological when you choose to... like how I choose to make my sex life harder...

LOL :(
 
...for those of us who sometimes let trades go against us when we shouldn't or take profits way too soon - there is a way to bring the underlying emotions to the surface and out into the open - and in doing so, become able to behave differently.

... if one has that problem, there is a way to use/analyze emotions to one's advantage.

unfortunately, I was just finally able to get back to all the posts now and want to go through them one by one to better understand other trader's experience.

thanks for the discussion....

DKS
 
what works for one person, doesn't necessarily work for the other.

it seems that the posts fall into two categories - 1) figure out how to 'use' or 'manage' the emotion and 2) avoid or deny the emotion. i do not believe #2 is actually possible albeit a mechanical system would help or obscure the issue.

...so that leaves the open question of what are the various ways of dealing with the emotions in trading. from my point of view, i am more interested in the UNCONSCIOUS emotions that influence the conscious action. that concept is central and when skillfully applied has the power to alter people's perceptions, behaviors and results - trading and otherwise.

the point of my original post was to apply this concept specifically to trading wherein it is so easy to see how unconscious emotions get played out in trading decisions.

i do of course believe that the unconscious is knowable....particularly if you have someone skilled to help you figure it out. and no, it doesn't have to take years and years and 5 days on the couch like traditional psychoanalysis. i am just trying to figure out how best to provide the insight to those who want it.... ala article, discussion etc ....
 
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