Its weird. Ive noticed when im confidant in my trades the stock goes my way and when im not its tends to go opposite. When asking another trader he told me that trading is all about feeling. when you got the feelin the trade works in your favor. Just wanted to know if anyone else had this concept has well.
trading psychology or academic
- Thread starter cashclay
- Start date
I strongly suspect that tends to be true of highly experienced, successful traders who have spent many years on the learning-curve, had their "10,000 hours" of screen-time, and so on.
I don't pretend to be there, yet, but the extent to which I identify with that overall perception has certainly gradually increased, over the years.
A feeling ? Lol.. I have a feeling that every trade will go my way but that's just not logical now is it ...
When you're young, you can mess around with making decisions based on feelings. When you get into midlife and all of the infrastructure associated with it, you want to accumulate ( retirement ) assets based on something grounded in "evidence" ( or have something with steady cash flow such as rental property ).
Confidence has nothing to do here.
You've got Rules -> Actions.
Confidence or not,
Act by the rules.
Feelings is way to complex.
Even two veterans will not share the same.
You can't analyze, reproduce stuff that are not systematic.
Feelings are based on signs. Then there is an interpretation.
That take experience, memory and subconscious processes.
But usually, if your trade show a loss. Exit that trade.
And keep riding those that show a profit.
Add, Test & remove signals.
Even two veterans will not share the same.
You can't analyze, reproduce stuff that are not systematic.
Feelings are based on signs. Then there is an interpretation.
That take experience, memory and subconscious processes.
But usually, if your trade show a loss. Exit that trade.
And keep riding those that show a profit.
Add, Test & remove signals.
I think emotions and 'feel' are incredibly useful in trading, used in the right way.
It makes sense that you feel confident about the trades you're in. It's not a cause and effect relationship though.
It's not that when you feel confident, 'shit works' and when you fell less confident it doesn't work. It's more along the lines of... you feel confident due to a bunch of different factors and those factors result in a trade that is successful and may have an edge.
Don't fall into the trap of thinking confidence is the reason for a successful trade, it's not, it's a symptom, but also a trigger.
When you correlate confidence with the reason for a successful trade you put yourself in a situation of 'overconfidence' where you think that the confidence and success of your last trade will somehow correlate into the success of your next one. This is dangerous with trading as you can do all sorts of retarded shit and still make money, developing detrimental habits.
Take this situation for example. You look at several reasons for getting into a trade and it works out flawlessly. You see the context of the market, a few trading gambits and familiar patterns and you execute. You feel confident because you think you've observed something with an edge. It has an edge 'clearly' and it works out. You then feel good and get into the next trade, you look at the same factors with less focus, but you feel good, your 'confidence' becomes one of the factors you use to determine how to execute. Another success. Eventually you start to correlate confidence with success and look less and less at the factors that brought about that confidence and initial success. Soon you start using confidence as a sole reason for entering a trade.
I may be completely off target here but I think the reason why you described your experience as 'weird' is because you're slipping into this process. You've gotten into trades purely on confidence and they've worked out. You may be shifting the % of your focus from an actual edge that's well thought out to replacing that % with confidence. It might work for a while, just like flipping a coin, but it's not a consistent edge.
Confidence is good as a 'trigger mechanism' to adjust your focus, provide you with information, the speed to execute etc etc - but it shouldn't be a big 'factor' in deciding what to trade. It certainly shouldn't overpower what you look for to get an edge. You're confident because you've seen the factors that look like an edge and you execute, you don't execute just because you're confident, a huge difference, but an easy trap to fall into given the way our minds are evolutionary wired.
Re-assess your decision making honestly and try to determine how much is based on confidence and how much is based on a genuine thought out edge.
What all the old boys who trade on feel fail to mention is that their confidence and 'feel', is mainly based on experience. They aren't confident because they had a couple of winners in a row and they feel invincible. They feel confident because they're looking at a pattern they've traded 100 times before. Their emotions are piqued initially because they see a few signs it's developing, they call it 'feel' but it's mainly memory and pattern recognition - they then use that confidence as a trigger and execute.
Confidence is the trigger, but because they're so experienced and 'unconsciously competent' in executing their setups they can't explain what happens after the trigger and erroneously say it's all due to 'feel'. It isn't, the 'feel' is just the trigger for a set of highly refined and learned behaviors and actions developed over years.
It's a very, very different form of confidence and 'feel' to someone that just feels good about their trades due to a good string of outcomes.
Overall, what I'm trying to say is that there are two different types of confidence, before and after, or execution and residual confidence. When dealing with something like trading that's based on probabilities you have to really take the 'residual' confidence with a pinch of salt, it will catch up to you if you lack self awareness.
If you're a surgeon that's performed 100 routine successful operations, then that residual confidence is great it keeps you driven, you have more control of the outcomes and that confidence helps you to perform your next operation. Not in trading, residual confidence will destroy you, you don't have control over the outcomes in the same way. When you start replacing your edge with a confident 'feeling' rather than using confidence as a tool to enhance your edge you're sliding down a slippery slope.
It makes sense that you feel confident about the trades you're in. It's not a cause and effect relationship though.
It's not that when you feel confident, 'shit works' and when you fell less confident it doesn't work. It's more along the lines of... you feel confident due to a bunch of different factors and those factors result in a trade that is successful and may have an edge.
Don't fall into the trap of thinking confidence is the reason for a successful trade, it's not, it's a symptom, but also a trigger.
When you correlate confidence with the reason for a successful trade you put yourself in a situation of 'overconfidence' where you think that the confidence and success of your last trade will somehow correlate into the success of your next one. This is dangerous with trading as you can do all sorts of retarded shit and still make money, developing detrimental habits.
Take this situation for example. You look at several reasons for getting into a trade and it works out flawlessly. You see the context of the market, a few trading gambits and familiar patterns and you execute. You feel confident because you think you've observed something with an edge. It has an edge 'clearly' and it works out. You then feel good and get into the next trade, you look at the same factors with less focus, but you feel good, your 'confidence' becomes one of the factors you use to determine how to execute. Another success. Eventually you start to correlate confidence with success and look less and less at the factors that brought about that confidence and initial success. Soon you start using confidence as a sole reason for entering a trade.
I may be completely off target here but I think the reason why you described your experience as 'weird' is because you're slipping into this process. You've gotten into trades purely on confidence and they've worked out. You may be shifting the % of your focus from an actual edge that's well thought out to replacing that % with confidence. It might work for a while, just like flipping a coin, but it's not a consistent edge.
Confidence is good as a 'trigger mechanism' to adjust your focus, provide you with information, the speed to execute etc etc - but it shouldn't be a big 'factor' in deciding what to trade. It certainly shouldn't overpower what you look for to get an edge. You're confident because you've seen the factors that look like an edge and you execute, you don't execute just because you're confident, a huge difference, but an easy trap to fall into given the way our minds are evolutionary wired.
Re-assess your decision making honestly and try to determine how much is based on confidence and how much is based on a genuine thought out edge.
What all the old boys who trade on feel fail to mention is that their confidence and 'feel', is mainly based on experience. They aren't confident because they had a couple of winners in a row and they feel invincible. They feel confident because they're looking at a pattern they've traded 100 times before. Their emotions are piqued initially because they see a few signs it's developing, they call it 'feel' but it's mainly memory and pattern recognition - they then use that confidence as a trigger and execute.
Confidence is the trigger, but because they're so experienced and 'unconsciously competent' in executing their setups they can't explain what happens after the trigger and erroneously say it's all due to 'feel'. It isn't, the 'feel' is just the trigger for a set of highly refined and learned behaviors and actions developed over years.
It's a very, very different form of confidence and 'feel' to someone that just feels good about their trades due to a good string of outcomes.
Overall, what I'm trying to say is that there are two different types of confidence, before and after, or execution and residual confidence. When dealing with something like trading that's based on probabilities you have to really take the 'residual' confidence with a pinch of salt, it will catch up to you if you lack self awareness.
If you're a surgeon that's performed 100 routine successful operations, then that residual confidence is great it keeps you driven, you have more control of the outcomes and that confidence helps you to perform your next operation. Not in trading, residual confidence will destroy you, you don't have control over the outcomes in the same way. When you start replacing your edge with a confident 'feeling' rather than using confidence as a tool to enhance your edge you're sliding down a slippery slope.
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I think we all have that "feeling" before a trade, otherwise we wouldn't take the trade in the first place...unless your're having a losing streak and your confidence is broken. Maybe he's talking about INTUITION...where you just "know" where price is going. I get that "intuition", but not for every trade...but when I do, I leverage up!
