Trading Psychology - page 3

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forexresearcher:
That's almost true for me. A proven system to trade successfully is the 1st to be in place. After that, if I decide to open/close a trade based on the technical analysis or whatsoever, I'll just do it without having second thoughts. Yeah...and I know that's a tough part on the emotions.

I don't like to watch a trade once I opened it because it can seriously affect my decision. I'll just leave it to hit it's TP or SL and then move on from there.

The bottomline is, everyone knows where the weakest link is in your emotions part, so getting past that will be part of successful trading.

the 1/10 of a sec to catch the RULER -- use cosine wave with that slight delay, you might win

hiya

do you think -- a profitable system exist and able to profit us consistently ?? --

today , a demo account experiment

-- condition, perfect consolidation zone -- cut off line that is Known in advance and become the accurate prediction 100%

--- condition , strategy of 1 : 3 -- go either way, I suppose to get profit -- i.e. savage loss or lock loss strategy

-- condition -- take an entry in those INDECISIVE consolidation zone (human proclaim that it would reduce big risk )

-- condition, take a long nap , after watching for 1 to 2 hr after entry

GUESS my experiment result !! -- ( my experiment is based on PERFECT technical , and mathematical sound strategy )

the result is straight forward -- all strategy carry bigger risk than the original 1 lot trade

 

I think our emotion is based on PROFIT / LOSS on each transaction, overall open gain / loss or overall change in equity of the day

all these emotion are NO NO to trading, but we can't held it [ volatility just need about 40 to 60 pip dangling movement within 1 to 2.5 hr to slaughter your blind guess ]

on the other hand , we will be so pissed for +10 to -20 --- but this one also mean NOTHING in term of reasonable volatility

close the MT4 software after 1.5 hour since you open a new trade -- could be a good way to GO FOR it (no emotion , if you can't see it)

if you are not good in trading with Profit, how about -- set up an Bad Objective, and Drop one of your Idea that lead to your downfall

we all start the same way -- by watching a beautiful painted palace of the past candles

on the other hand, we try to make sense of forex with pure technical perfect chart and ultimate profitable (small or big ) strategy - let's say, you find it

--- will you ever calculate the Drawdown that you have to withstand in the Watching of the forex story unfold

key -- nope , not R/S , no predicting next few chart, your hunch could be out of phase (wave theory) of the cycle

it is to see whether your habit and your template best explain to what Most traders are doing during last 45 days

just like -- when will the research experiment be successful and happy thereafter

if you can tell definitely, it is the time to Trade, then you are close to begin your trader journey

if you are still wondering which direction will the market move next -- then you should get plenty of knowledge before you consider to start

the biggest enemy could be -- your Opened Order basket is Empty for that day

and you try to fill it with something, just like trolley in the supermarket

do you tend to KEEP holding your opened entry till your SL or till your TP

fast big volatility only make that happens more often !

 

fallacy

after you ENTER (open a buy or sell) a position i.e. not closed yet

fallacy is

  • previous candle pattern
  • that you think -- it MUST repeat
  • R/S -- I am not into it [[ consolidation hold better for those R/S than breakout bar emerge ]]
  • Expectation -- all are fantastic stuff stuck in your brain
  • your current Profit / Loss of that Transaction
[ fiction book ]

BIG trend, huge pip movement is like a FOREX TORNADO

-- in our mindset, we always think sunny -- rainy -- sunny

in forex --- after a huge tornado

we could only have

** mild wind (same direction and mild -- actually, the tornado will continue is more likely)

** unsteady wind (consolidation)

** HOLD ON -- to what you've got i.e. hold or not entry

i.e. when you are not sure -- CLOSE it -- then re-enter using OCO

too much temptation to fire at freewill like video game

but if you entry more than 10 times a day -- your pip cost is already 50USD, too much

5M or -30 to +30 Profit / loss is too Professional scalper too-- they must have 1 indicator that you don't have and the insight you wish you have

one thing that you should abide -- your indicators and the rules -- you are just a back tester during trading --- think less , believe in your charting skill

VIEW and R/S always wrong (led you to premature entry)

but Trend must be correct -- few candles said that trend is that direction

completion of graduating is when

your list out 5 vital Q to be answer

prioritize them

with extensive search and study , find out the ultimate answer

and then can point to a color chart and say with certainty that you think if it hit this in next 20 minute -- oke with your own money

when you got the Disbelief feeling -- then clearly show that your view were wrong -- cut it now

and there are 2 types of moneys on the table

one is Green

another one is Red

when the table turn, those money changes its color by flipping

 

shopperholics

fx price -- is really sea food price, very depend much on WHERE (what market scenario) that you sell it

when we walk into the supermarket, we might want to fill out some trolley

when we walk into the dept store, we will be wanna to see where the crowd is (are)

Notice whether you got counter-trend SHM bad thinking

Note how the market see the fish price (go up or come down) - can't be wrong

Note the thrust, those flame can't touch the SL

when you open your trading platform , what kind of HABIT do you have

say the supermaket using digital electronic display -- not paper to DISPLAY the price

price will be fixed at the time you pick up the PRODUCT, and you need to pick a POINTER -- up or down pointer

so, when you check out, you will get EXTRA cash back , if your pointer is correct

even after we trade for a while

WE STILL TEND TO DO stupid stuff based on our HUNCH and impulse buy

i.e. the correct way to do it

is to browse around the dept store with your trusted charting skill

see where the crowd is -- and DON'T look for DISCOUNT PRICE (I still try to see, what did I missed, ooh, the discount price -- harmonic price action -- bring the price right down now, then enter)

only few % of the casino people won't lost money when they walk out,

so hang on to your hunch or jealousy (of some earlier possible trade) and trust your CHARTING and statistical analysis , could make the decision about 5 to 15 minutes before a BAR (candle) close

SL , you can think you are a jet fighter, you must be sure when you are stationary , the end of the fire thrust from your engine, won't touch anything , that is your SL , beside guessing the BIG picture direction correctly

--- but DISBELIEF of the direction, you better think of a proper exit strategy beforehand -- early close could be better than any other hedging strategy when you see something disbelifing

 

I have found that my trading psychology is greatly influenced by the trading method I used. I saw this thread and thought I would comment that I used to trade off indicators and complicated trading programs but after becoming a pure price action trader my psychology has improved and I have become a much more clam and confident trader.

 

rather than like FANTASY FOOTBALL forex

we have to ask everyone around -- DID WE WIN MONEY in forex, after trading for a month (i.e. balance increase or balance decrease)

e.g. we bet against yankee [ counter-trend , convenient price , next stop is the USUAL culprit ] , and we loss more whenever we bet more

if balance decrease, we have to stop trading and rethink the whole thing validity -- buy rule, exit rule , mindset correctness, indicator good , any hunch, any spiral on loss , can we give up small profit and wait for longer, is the market or pair , volatility is wrong for us

it it a profit utopia or loss dark pit

 

I found great value in a book called Trading in the Zone by Mark Douglas.. just thought any thread on trading psychology should include a mention of this book.

 

Another book

Trading in the Zone by Mark Douglas is an excellent book, but the best i've read is "Trade your way to financial freedom" by Van K Tharp. Deals extensively with trader psychology which really is the basis of succesfull trading. You need to understand yourself first before looking for your Holy Grail.

 

psychology in forex trading

The Psychology of Trading can be a tool that can help a trader control and predict their emotions and decide based on facts. The lack of this psychology can be a hindrance for the trader's success since the movements of the market are pretty unpredictable.

The right psychological outlook can help traders face the issues and make sound decisions in the end. There should be a balance among all the different aspects of becoming a successful trader.

When a trader loses a trade, the first thing that can come to their mind, would probably be that he must be using the wrong system. The trader might even regret taking the trade however sometimes the nature of the mistakes done can come from the inner self just like the mistakes we make in life. There is just about five percent of consistent top traders whose ultimate aim is to achieve constant profits. These top traders learn from their mistakes. They treat their mistakes as an experience they could learn from. They realize that they could have another chance of making it better and below are some of the helpful ways of achieving the right trading psychology.

Number 1..Make stop-loss orders and honor them for your money's protection - When there is an order for the stop loss the trader should do it immediately, he should not have doubts. The trader should prevent holding onto his position which is already losing because he hopes that something good will still happen. On a losing point or position the stocks will continue to fall until a positive movement happens to stop the fall. The trader may be wiped out just because he is still waiting for the positive movement which could be like a magic.

A trader should get released from a negative trade and apply the money to do another trade transaction. A trader should cut the losses quickly and he should let more profits from the trade run. Most of the traders abandon the plan they had before and get the profits even before the target has been reached since they somehow feel very comfortable just being on a position they think is most profitable already. These traders will end up sitting on a losing position; they usually allow the market to act against their trade for many points while hoping that this market goes back to their favor.

These traders also quickly remove the orders to stop believing that the market's movement will constantly be beneficial for them. Stops exists to be hit as well as to halt the trader from losing the money he cannot afford to lose. It is a wrong belief that each trade will gain the trader profits it already good if he can get three trades that is earning well out of six. The question is how you can gain money with just the half of your trade transactions winning, the answer is that the trader should allow the profits of the winning trades to continuously run and keep the losses at a minimum.

number 2...Never over trade - Over trading is a usual mistake of the traders. They put a high leverage on the account they own which they do through trading bigger sizes than what their account can trade.

number 3...Trade with the trend only - The time scale a trader uses is not even important. The difference lies in the stop-loss or the target size. This means that a trend with a long term needs big stops and bigger prospective targets. The common mistake of the trader is to follow up the trends of large scales with shorter stop-loss orders which can be more comfortable on their part.

number 4...Let the profits continuously run - A natural reaction for a trader is to take the profits at an early stage because of their fear that the unfortunate could happen and they could lose the profits. The best thing to do is to make use of trailing stops for protection.

The Psychology of trading is a subject not often discussed and dealt with. Traders usually keep themselves busy in finding a system that works for them. Finding the right system is indeed important however understanding the psychological aspects and barriers should not be neglected.

 
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