Discussion in 'Psychology' started by hirsch.im.wald, Mar 10, 2006.

  1. I'm in a philosophical mood lately.

    Always chasing that complex feedback mechanism some people despectively call trend.
    And now I realize it doesn't feed on wins. It's losses. Hypothetic or real ones.
    Only the negative side brings in the dynamics.

    Stocks may go up for years, but the dynamic switches to self-perpetuating feedback mode because of the fear of losing out, the fear of being too late. The fear of "everybody but me".
    Copper may go up for years, but not before the first electronics companies get the creeps it really gets interesting.

    Oh boy and in futures...
    Wisecracking and posing as the big knowall gets most people in. Then there is waiting, but the stop is lingering and behind the stop is the margin call and behind that margin call the next person's stop...

    A sweaty, uneasy wait until finally the market - innocently hunting for trade volume - decides upon his prey, some vultures annoyingly chasing him.

    It goes a little here, it goes a little there, but not before someone's pain kicks in somewhere, willing to bail out in the most fragile of moments paying a high cost to do so - not before that anything worthwile will happen.
  2. i agree totally
  3. Cheese


    Why does it seem so many get themselves, so f**ked up the butt, trading?

    A mystery? Or simply trading a market without knowing thoroughly how to do it?
  4. CAX49


    I have an averaging in strategy that I can make money 8 out of 10 days... those two days smack me so hard on the loss column I don't know if its worth it..

  5. You completely missed the point.
    By a wide margin.
    It's about understanding price action.
    Losses are a natural part of trading and if they accumulate to less than the wins there's no problem.

    BUT potential losses force you to act in a foreseeable manner.
    I hold that losses are the key to understand price action. And yes, your wins are somebody's losses.
    Read that person's mind (is he bluffing, will he bail out?) and you get his money...

    Somebody claimed charts to be a contraindicator, in the sense of bullish/ bearish consensus. So simply answer two questions: What is the position of the majority of short time traders? What has to happen to prove them wrong?

    Somebody moved this thread to psychology. Whatever. I hope you get the point anyway.
  6. Get used to losses... they suck, but my experience over the years is that you can't be profitable without taking a large number of losses...

    I lose 50% of the time, and I don't give a monkey's ass about em... most of my losses are equal in size to most of my gains, and I make my net profits on around 10% of my trades...
  7. Losses don't suck.
    One persons's losses are another persons wins. They are good. They provide movement as opposed to boring "efficient markets" in "equilibrium".
    If some economists were right, that would be a real nightmare, isn't it?

    So be grateful to God there are losses and everybody (traders, commercials, hedgers and whatever else there mingles in the markets) is scared to hell about them.
    They are the true source of a trader's daily bread.
    :D :D :D
  8. Cesko


    Sounds strange but it si true. Longer in this business better I understand how close my decisions are to a coin flipping.

    P.S. Successful poker player should be thankful for bad beats otherwise he wouldn't be able to find the game.
  9. Losses make you appreciate wins.

    After several years of trading, I REALLY appreciate wins.