Hello everyone, Many years ago when I didn’t know the difference between the bid and the ask I read a few of the popular trading books on psychology. No doubt it was of little help as I didn’t know a thing or two about trading. Now that I have a methodology and approach which seems to be working I’m a little curious on the psychological aspect. Is there anyone here who had any benefit from reading and practicing trader psychology? Or changing your mental outlook or views in some way? By benefit I mean practical trading results, i.e., making more $$$ as a result of implementing psychology work or improving your mental state. If you’re a newbie trading in the zone on the simulator, please don’t bother to answer. Thank you.
My own basic view is that psychology work can’t make a trader, but maybe it can help a trader improve if he already have a basic methodology with a positive expectancy. It’s also possible that there are traders who have a basic methodology that’s working, but mental limitations or issues or personality traits prevent them from executing it successfully? I think what you believe about the market also is important. For example, some like to think of the market as something evil and which is out to punish you, i.e., the view that the market will always inflict maximum pain. Is that really a helpful view? Why not consider the market a very friendly place that’s there to help you get rich by giving you abundant opportunities every single day lately? Maybe what you believe about yourself matters as well, i.e., do you believe you have what it takes? Do you believe you deserve to get rich? Maybe you have some issues where you want to punish yourself from time to time? No doubt there’s a lot of interesting questions and angles to explore here. Finally, trading small or smaller seems to be the biggest and easiest hack in terms of keeping your emotions in check.
I believe the psychology aspect is more important during the learning phase.To understand what triggers your emotions, why you think an feal the way you think and feal. Any trade that got me into emotions I count him as a bad trade. I try to avoid, bypass emotions and not to control them. Get into the psychology aspect is very important. Your chosen trading style should support your mental state, not some breathing procedure, and I have fully respect to meditation.
It should be understood that in psychological terms, trading is also an extremely difficult option for work, which definitely requires attention and training. And you have to be ready for a lot.
The human brain wants a nicely rising equity curve with minor drawdowns. If you can do that then the emotional/psychology aspect is not as important. But in reality trading is full of uncertainty, a meandering equity curve with profits coming in lumps and often long losing streaks as well. You need to manage and regulate your emotions in the face of all that uncertainty. Not just for a day or two but for months and years on end.
Only technical analysis can make you a trader but to become profitable trader psychology is the main weapon to win this war of fear and greed.
Comparing myself to a slot player helped with understanding the concept of fully accepting risk. We are gamblers...I've tried to convince myself for far too long that I wasn't. I've also tried to convince myself that the market is a benevolent provider of wealth (in relation to your second post), an ocean of financial abundance where all one has to do is bring their bucket to the beach to withdrawal their share...I have come to the conclusion that this is not the case at all. The competition is far too fierce for it to be rainbows and sunshine. You need to be a killer to make real money IMO. The market is quite literally 100% made up of others that have the singular goal of taking your money...that does not sound like a very relaxing and generous environment to me. Also, sort of off topic but just as important...maybe more so than psychology...is simply doing the work. Like a ton of work. Trading, especially intraday probabilistic TA type stuff takes a ton of effort to get right. easy is not an option. And its lame and tedious.
Litttle things helped. Writing things down. For what ever reason you are more likely to do something if you wrote it down rather than kept it in your mind. Changing the focus from making or losing money to following my trading plan.
%% NO + its not a gamble\ but a different mental point of View [mpoV] helps very much, very much on this. NOT really calling it a loss; but a business expense. Same thing but a business expense sounds so much better, practical +easier to take. IF you think your broker is like a casino that will mess up your auto brakes for winning / you need a new broker or new attitude, or both Dr Van Tharp is in a class by himself; S Cohen's counselor may help a bit?? [Edit most people in market want a profit, much more than any one traders money= big difference]