There are 2 parts to successful trading in order to make yourself rich: (1) methodology and (2) implementation. If the methodology is insufficiently reliable then to implement it engenders continual uncertainty trying to execute it. In other words you have a plan but you can't execute it at all (or can't execute it generally) because of the number of times it fails. It is not generally realised at ET that it doesn't take much to be continually failing (or continually failing to make sufficient progress) rather than continually building substantial success. If in the less likely event that you have adopted or devised a reliable methodology giving you buy and sell triggers you can depend on (a very high probability system), you personality may be too weak (driven by irrational base reactions of fear, dread, panic, or impulse) to ever deploy it successfully.
. =================================== Good point, mr cheese; people will tend to have trouble with fear; or anger, depending on personality But to let that continually dominate, is really laziness. Frankly part of the good news is fear [an emotion which can be helpful also, within limits]does NOT have to be acted upon.
"Expectations." When I first started in early 80's, I had the Wall Street Journal, graph paper, ruler and a pencil, spending Saturday's at main library looking at microfilm for past issues of the paper, had to make my own charts. There were are handful of books on investing on using fundamentals, and really too expensive for much trading is stocks, $125 one way commissions for 100 shares forced you to stay long term. There was limited info on much of anything, you had your charts which was lite years ahead of what most investors used and calculated indicators long hand. More people actually made money, I was very fortunate to learn in these early years. Most who traded futures, did spreads, slow steady progress. Now, if a nano second is late, people are freaking out, traders have six monitors to trade one contract of Emini contract of ES, got Business news network going, pit squawk box, chat rooms, 900 indicators, so many indicators, can't see the price bars, but it does look pretty. And of course, so few make a life trading. In 1960's and 1970's, Good humor man in his truck go up and down the streets selling ice cream bar for 35 cents, life's simple pleasures. A six year wondering around the neighborhood for the ice cream man, was the norm, little boy had a simple plan of waiting for the slow truck, hear the bell, stand up, truck stops, pay 35 cents, get reward. He didn't need to write it down, in his brain, he had done it often enough, it worked to his liking. A simple plan, tested well, tight risk, managing his money and knowing about reward. His brain was happy. 2011, parent must have a gun to keep their kids safe and have a kiddie harness, trucks speed at 30mph, loud hip hop music, truck might come and might not and it costs $4.00 for watered down ice cream, some reward. His brain expects to get ripped off. If you Expect to get ripped off, you will. If you don't know why price behaves the way it does, you will lose, there are reasons why price makes certain patterns. If you can't calculate an indicator by hand, you have no clue what the relationship is to price. The "edge" most seek is easier to find when you can identify "why price does what it does". "Brain" Losing traders lose, lose often, lose in so many ways after awhile, they swear there is a camera behind them where whole world sees them putting on trades. Your Brain gets so used to you losing, and it becomes very content when you do so, brain doesn't like change, it is lazy, it just wants to keep doing what it has always done. Losing traders get nervous and jumpy when they actually are in a winning trade, brain don't like that as it is having to work and in unchartered waters. Brain is so content for you to lose, it often draws the losing trader to take the iffy trades and break rules. Brain now HAPPY. "Change" Some might think this may be wrong approach, but we live in a world where getting a nice ice cream is not considered a good reward. Don't know where to buy one, but shock treatment can be more compelling way to change violating rules. Make a low voltage shock toy, perhaps couple of hits might be enough to make a Happy change. I have known this to work on a few who were committed for change and have tried other techniques and had failed. I, myself, have used this tech and hypnosis. Got to say, certainly stopped many of dumb non-system trades. Once you violate a rule, you have opened the door for others to be broken. Write in your private journal something you want to test after market closes or quit for the day. Young traders who write journals in this forum, I seldom ever see them get better, they continually do same errors over and over and over, I think it is too much pressure, too much ego, and cause of the ego-less likely to take advise. Women make better traders cause of lack of ego. "Acceptance" If you test a method over 100 trades or 3,000 trades, my brain is HAPPIER with bigger sample size. Is it much work to test out over larger data series, YOU BET'CHA, but brain is HAPPIER. If my method says to go to breakeven plus one after so many tics, I have stats that back up my results, brain is happy. Which trades will my brain be HAPPIER, losing trades or winning trades, well, I want the winning trades, so I will only concentrate on winning trades. Brain gets use to learning to ACCEPT reward from winning trades.
This is an old thread. But, if any of the posters on here denouncing Howell have actually read his book you would see that he actually has something in hand. His work provides a cognitive solution to managing the fear that keeps one from trading consistently or even taking the next step of conquering that which ailes them to increase in size, etc. It picks up where Douglas & Kiev leave off. But, in typical ET form we have the "naysayers" whom do a 30 sec eyeball of a website & proclaim the guy to be a sham. There are alot of shams on this site. But, most of them aren't selling anything other than their positions too early or into rallies and telling each other that they're making a killing. Give the man a chance. Show some respect. PS yes, he should have sponsor status.
I didn't see this thread when going through the psychology section. Actually very insightful statements here.
I once advise one friend who had been losing over 4 years , to handbacktest for at least 2 000 trades... the person just gave up trading.lol
Rande I want to thank you for all your videos on you tube , literature and all the articles you have written.They have helped me immensely. The first trading lessons to be taught , should be about the self in trading. Keep up the good work and I believe every trader should be enriched with your work There is more to solving the beliefs and biases , there are more than 15 biases/beliefs which enter into trading decisions.Is it an easy issue to solve?