Strong opinion is a trader’s greatest threat

Discussion in 'Psychology' started by NoDoji, Mar 10, 2010.

  1. NoDoji

    NoDoji

    Obviously we all have an opinion going into a trade and it's the opinion that price will go up or down in our favor.

    I believe the danger is when the opinion becomes a strong opinion. I think we can all agree that there are lukewarm setups, good setups, and great setups. If you put on a trade based on a lukewarm setup, you're generally willing to bail at the first sign of trouble. Enter the trade on a good setup and you usually have a stop in mind at a price that invalidates the setup. But when you put on trade based on a GREAT setup (where 95% of the time in the past, X set up condition Y which led to Z), it's possible that you go in with such a strong opinion that when condition Y doesn't lead to Z, you might ditch your trading rules and, in fact, can be become totally blinded to the fact that if you'd simply switched sides when condition Y didn't lead to Z you'd have hit the home run you were hoping for.
     
    #21     Mar 12, 2010
  2. Redneck

    Redneck

    NOD

    It’s funny how you used the y leads to z…… I’m currently working with a colleague and using the same....

    a always leads to b… b always leads to c… except when b leads back to a

    You and I think much alike Ma’am… :)

    And I am with you on this one...


    I’m actually curious what advice your detractors have to offer

    See Ya

    RN
     
    #22     Mar 12, 2010
  3. xburbx

    xburbx

    checking in
     
    #23     Mar 12, 2010