No. First you backtest your trading system in bear, bull and flat markets. If the system is profitable and the drawdown is reasonable THEN you can trade with absolute confidence and discipline, what you call having "your psychology straight". Trading with discipline and confidence is much, much more easier to do if the trader knows his system will make him money in the long run. Psychology will get you nowhere if you are not sure about your system. Even the most disciplined trader cannot make money if his system has no statistical edge to begin with.
Market is constantly changing so it is pointless to base your trading on what happened 1,5,10 years ago. All that matters is if your edge works now. And when you find something that works now you had better press the shit out of it while the getting is good. Successful trading is not about killing it over all types of markets. The goal is to grind and stay alive until your edge allows you to kill it during certain time periods. A lot of people blow out because when the volatility is there they make money but when the vix pukes they give it all back and then some. One has to learn when to tread water and when to paddle your ass off for the prize. A disciplined trader will pull the trigger consistently no matter what the system's outcome is. An undisciplined trader will eventually blow up an account trading a positive expectancy system
Nothing could be farther from the truth. Markets do NOT change my friend, they go up, down or sideways, that's all they have being doing since day one. And that's all they will be doing in the future, end of story. Yes and no. A truly profitable system stays profitable regardless of market conditions. You either have the edge or you don't, period. Now you are talking. Couldn't agree more.
This statement can not be checked scientifically... AT ALL... It is just what YOU believe to be true..... Because you have done some backtesting slash data mining over the past 30 years and you found something that would have worked for that time period... You have absolutely no assurance that it will keep working in the future... But hey, having this belief is the best way to have great winnings for a couple of years and then blowing up when things change...
The hardest thing to do is decide whether you want to enter a position during an event like the government shutdown .I still remember my system told me to go long at the fiscal cliff in dec of last year. I simply did not know whether to go long or not. There is no 100% hard rule that says yes or no. it depends on the person itself. In the end, I went with a reduced position. Was that the right choice? We will never know. I believe it was the right choice, but in reality I have no clue. As paul Tudor Jones once said. After becoming a billionaire I realized I had no clue whether my methods were luck, or skill.
yes it does... Ever heard of "stop hunting".. "short squeeze"...that's the market "caring" about your risk level.
Best "trading psychology" book you have ever read? Larry Phillips' "Zen and The Art of Poker".. has a special place in my heart...
Ok, thx. Got the In the Zone, although some bottom lines can not be read. Halfway through it, so far a lot of things I had come up to the conclusion myself, let s see if there are any actionnable things in the 2nd part... Anyone has read Van Tharp? especially Peak Performance? It sells at 800$, wonder if it s any better than the rest.
There's all sorts of market lore out there. But even if some of it contains elements of truth, it has nothing to do with developing a thoroughly-tested and consistently-profitable trading plan and trading it. If one instead focuses on the boogey-man, he will never attain consistent profitability, at least to the extent where this becomes more than a hobby, like Wednesday-nite poker.