I believe I have read almost every trading book out there including all the trading psychology books and spent a small fortune in the process but none of it helped. Then I was fortunate enough to learn a strategy that worked and how to implement it from a real trader and within a very short period all my psychological problems disappeared.
There's a fair amount of skepticism on this board, and I find that healthy. I'm on record in a number of my articles as stressing that the majority of traders have psychological problems because they don't know how to trade; it's not that they have deeply seated psychological issues. That is why, indeed, trading coaches and mentors should always have content expertise: they should know the markets of the traders they work with. Otherwise, they can't distinguish those occasions when bad trading causes emotional disruption and those in which emotions interfere with good trading. If you look at successful coaches across a variety of fields, you'll see that they always have first-hand experience in those fields. Music teachers can play their instruments; college basketball coaches invariably have played the game themselves. They may not have been stars, but they know enough to be able to understand the game and communicate those understandings to others. I've traded since very late 1977 and managed to stay afloat (and profitable) over the years. Have I made a living from my trading? Not at all. I chose the path of a psychologist, and spent 19 years teaching at a med school before jumping at the opportunity to work with traders professionally in Chicago. Through that time, I've kept my fingers in the market and traded part-time (almost exclusively the S&P in the morning) and managed to make enough money to make the trading worth my while. I'd be the last, however, to position myself as a guru or Market Wizard. What I know, I share--free of charge--on my websites (www.brettsteenbarger.com and www.traderfeed.blogspot.com). Nearly 30 years after putting on my first trade, I'm still a student of the markets. The bottom line, I guess, is that anyone who offers themselves as a trading psychologist should know trading, and they should know psychology. Most of all, they should know what they don't know. I've seen how tough it is to make a living trading--even among the professional traders at my firm. My desire was to convey that reality and not let folks get taken in by the commercial hype of the industry. I would never think of insulting anyone who is a student of the market, professional or otherwise. Thirty years of trading equities and equity indices may not make you rich, but they do impart a degree of humility. Thanks again for the opportunity to be part of this forum.
No need for an apology. But if your intent is to "counteract the unfortunate hype", then why do you give a glowing review for a crappy swing trading book such as Markman's? Wiley is the biggest pusher of expensive, overhyped trading books out there, yet you seem to splooge for every title in their library. Clearly, your strength is writing, so don't try to bullshit these people about what it takes to be a real trader.
You got that right. That post is one of the smoothest Ive ever seen. p.s. On a side note I really think that it would be impossible for anybody to resist trading their way to a fortune if they knew how to do it and if you can make consistent profits in the spmini its only a matter of compounding.
Hi Brett, I'm not sure if this is a good analogy (I use to make it myself) that you've made. Looking back on my own personal experiences with playing sports on an international and national level along with having a sports psychologist... I consider a sports coach different from a sports psychologist. Simply, to be a good sports psychologist...they don't need to have first hand experience in a particular sport nor does the experience (if they have experience) needs to be on the same level to understand their clients. However, a sports coach...I think it should be mandatory that the coach has played at one time in their own careers at the level of their players or close to it. (ex. professional coaches that never played on the professional level but they did excel on the collegiate level) Therefore, I do consider a trader coach (mentor) much different then a trader psychologist although there are a few websites out there that do blur the difference between the two. Maybe the distinction is that one has players to manage and teach strategy while the other has clients. A client can get up and leave and say mumbo jumbo. A player that gets up and leave...gets fined or kicked off the team. As for my trading career...I had a trader coach (mentor) in my early years but have never had a trader psychologist. Yet, I've had sports coaches and a sports psychologist. If I ever do need a trader psychologist...I don't care if he/she is profitable or not. I do care if they are good at their job (psychologist) and can help me resolve issues that's sabotaging my trading. P.S. I have enjoyed your blog for awhile...keep up the good work. http://www.traderfeed.blogspot.com/ Mark
I couldn't find a single thing to disagree with in that article. But the #1 thing that keeps a trader from succeeding once he knows how to trade and runs his trading like a business is access to real capital, whether he be retail or otherwise. It just happens that 99.9999% of undercapitilized traders are retail. The #2 problem in lack of success is highly correlated to #1 - not having the courage to put on a position where a move makes a difference to his PnL. This is because if the trader takes a hit or goes on a bad run, his account may go to zero. So he puts on positons that are some fraction of his account in order to keep the probabilities of a blowout remote, and so he goes home + $100 for the day before taxes and comissions after grinding it out for 6 1/2 hours. It isn't that "retail" traders are any worse technically than "professional" traders. It is the courage to use the leverage baby, when the expectations warrant it, and to run like hell when it is clear that he is wrong in the face of the other side of the coin, the less probable one, becoming the reality. nitro
I've long been a fan of Brett if for no other reason than, other than Ari Kiev, there aren't many Docs out there that take a dispassionate look at what we (Traders) go through. With that said, all you need to do is go through Brett's website to find instance after instance where he details his own trading experiments to realize that when he criticizes traders, he's also filtering his own sophomoric, and lackluster, trading experiences into the mix. I seem to recall once where he talked about trying to fade the ES all day on a trending day. How many of us here do the same thing? For him to now say that the insignia of a great trader is numerical complexity, I think is overstating the point. One only needs to look at all the engineers on boards like these who jerk off night and day to thier neural network paper trading results to realize that success in trading is a combination of fearlessness with a measure risk aversion, numeracy, and the ability to intuit correlations in real-time.
There is nothing wrong with fading the ES at any time under any circumstances where the trade has a positive expectancy, strong trending day or otherwise. I do it all the time (in YM and DIA). The key is not to lose money on those days if that is what you end up doing. People that talk about the market in these terms don't know what trading is about, which is probably why he writes and doesn't really trade. That said, there are lots of people that are not traders, but can help you become a better trader. I have seen that relationship in many fields that requires talent and expertise. nitro