ditto... I do have some "psychological" (not emotional) addition but it's up to the point. Still waiting for Joe Ross....
I agree, fear is an artifact of uncertainty. It is definitely true that there is not certainty in the markets. These are precisely the reasons why every trader has to learn to handle fear. To be a successful trader, one has to learn to deal with fear. Otherwise it is virtually impossible to think logically during the course of a trade. Joe Ross
Fear, dread, panic, fu*ked-up nervousness .. call it what you will: the greater it is the greater is the extent to which you don't know the market you are trading in.
first i don't want to come off mean or like a dick. i think most of the guys who have trouble think way to much. you talk and talk and talk like a bunch of old women. if your a guy who loses everyday my tip to you is look at way you went into that position. the stockmarket is not a high IQ game and sometimes the best move is the one you fear. if your a guy that always buys at the high well maybe you should learn thats a short. if you sell at the low well maybe thats where you should learn to buy. also maybe you need to learn that sometimes you might miss moves. the best buy or sell is when all the scared guys cover so learn to pick your spot. its all based on fear and most people will never get it.
on paper and in theory, we can all wish fear/greed was just that. something we could recognize simply and take action upon. the reality is that fear and greed are emotions that we will always face, no matter how many years in the business. the way i'm handling fear and greed is from playing no limit holdem and structure. setting the entry, stop and target beforehand puts a structure on the trade and i know approximately what i'm willing to lose for the gain that i'm gunning for. this helps with the fear. as much as poker and trading are different, i like looking at winning positions as me in the card table. I know that i will not get a stable definite trend more than 2-3 times a day. When i do and i'm already in it, its like i'm a poker player on the table with a good hand. This is the moment i gun for the big profit. Like a player you keeps bidding up the pot, I scale in, risk the unrealized profit for more and then cashout when my gut tells me to or i hit a tightened stop point. whichever comes first. IMHO there is nothing wrong with being passionate or emoting positive emotions while trading. theres no rule that says traders have to be emotionless. -m.o.
Dude... are you retarded? You say you agree but you're not getting the whole point. OK... now you might think that I'm just a vendor hater... but here's an explanation why... 1. You agree that fear is an artifact of uncertainty. But look... "So when fear is here it means you DIDN'T WORK ENOUGH AND/OR ACQUIRE ENOUGH KNOWLEDGE. "... Now have you been reading the whole thread??? or Were you just trying to get off the critisism from the first post. Is it something to deal with or handle? 2. Uncertainty and logically. You accepted the fact that the market is uncertain then how do you find logic in your trades? What is a logical trade in an uncertain market? 3. One of harrytrader's point was that lack of understanding causes people to act "irrationally". Look back in history. You've heard of people buying Oxygen tubes when the Haley's Comet was coming, witchhunt in Salem, people getting killed for sacrifice during a solar eclipse... etc. etc..... Do we do things like that as we do back then... we certainly have relatively irrational responces but it's not that bad as 100 or 200 years ago. So Joe Ross... how the hell do you teach people to trade? Actually, considering all... what you posted in here has nothing to do with becoming successful in trading.... There are more important aspects in trading than most of the psycho-BS...
Right, but the point I discuss is that it is not by only using Mantra's recipes you can borrow to Hollywood's films from Star wars to Matrix: "I have no fear, I have no fear , I have no fear" . I won't say that for short term you won't persuade yourself but reality will catch you soon if there is nothing real behind. And don't tell me stuff like "you create your own reality with your thoughts" this reminds me too much of mysticism from New Age Gurus.
Already said also: http://www.elitetrader.com/vb/showthread.php?s=&postid=393760&highlight=shewart#post393760 "If you overestimate the capability of your system you will undergo the Taguchi Loss function which is ^2 see for comment answer to thread Regret: A Powerful Emotion You Must Face :" http://www.elitetrader.com/vb/showthread.php?s=&postid=394133#post394133 So if you want zero defect in your trades whereas the system's tolerance (you + the trading framework + market's reaction) doesn't allow to do so you will get the opposite results as wanted (both on psychological and financial point of view) due to the "Taguchi" loss function (Taguchi is another Industry Quality guru like Deming and Shewart) that increases all the more so (at ^2) that your system deviates from the ideal specification: <IMG SRC=http://www.maaw.info/ArtSum5.gif> Conclusion: the more you (only) Want, the less you Get. The more you Know (and Practice and Check or so called Deming's wheel see picture below) , the more you Get: <IMG SRC=http://www.maaw.info/ArtSum7.gif>