The day to day psychology of a trader

Discussion in 'Psychology' started by smallStops, Feb 19, 2015.

  1. Indeed : limiting beliefs about money.
    This is actually just one manifestation of when "spirituality" is actually F^&k up.
    Even if one clears this specific limiting belief "money is evil", the underlying
    "spiritual" issue still there.
    This is why I believe trading is a golden opportunity : clear one belief, without dealing with the "spirituality" behind, and then it turns to another thing, another "limiting belief" shows up.
    Last edited: Feb 23, 2015
    #51     Feb 23, 2015
  2. :):):) Well well well : I am very glad you have finished your 10 days, and now wish that you had done it much earlier - as everyone who has done it.
    Please share the benefits with others ( such as encouraging those you care for to do it as well).
    #52     Feb 25, 2015
  3. Still on the book :
    obviously writing a book, makes trade preparation looks like a picnic.
    I wonder what was all this moaning about trading session preparation: :rolleyes::rolleyes::rolleyes:
    #53     Feb 25, 2015
  4. dbphoenix


    As this thread is in Psychology rather than Journals, I'm offering this post. It's cross-posted, but I don't want to drag anyone away to another thread (the "psychology" is primarily in the last three paragraphs, but doesn't make much sense without what precedes it).

    First, the context, from this morning [2/24].

    Note that the overnight range was generally 44-48 (it doesn't matter whether this is to the tick or not; it is after all a 30m bar). Just before the open, the entire range shifts, like Alaska during the earthquake, and creates a new range from 40 to 44, the lower limit of the previous range. At around 0845, price tests that old lower limit of 44 and drifts downward. At a quarter after nine, it tests the 40 level, which it had done earlier at 0745.


    Now we switch to the 1m. Note the 0915 test of 40 noted by the first arrow. Price then drops through 40. This is a breakout (or breakdown if you like). How one trades this or if one trades it at all is up to the trader. But whether he sold the breakdown or not, it only goes as far as 32. Not bad, but not great. Maybe he exits when price takes longer than he likes for a continuation. Maybe he notices that this level matches the previous day's afternoon low. Or maybe he sees that "spike" up through 38 and gets out then, maybe at BE or maybe with a small profit. Or loss.


    Then he sees price re-enter -- or try to re-enter -- 40. Maybe he tries to go long there with a tight entry trigger. Maybe he gets stopped out for a small loss. If he does, then he is not only thinking about that first trade and how much he gained or lost, but now he's also thinking about this second trade and how lucky he is that it didn't get triggered or that it did get triggered and provided him with that loss.

    What he isn't thinking about is the market, and the price movement, and when and how and when it's moving. And why. He is, therefore, setting himself up to miss a trade that will soon reach 54.

    Unless the trader can stop thinking about himself and his trades and whether he's won or lost and how much, he will not be prepared to take advantage of the opportunities that the market gives him. He will instead miss first one, then the next, then the next, all the while deepening and enriching his self-pity. This must be eliminated. The Phillips book I mentioned earlier can help. So can a trusted trading plan. But the trader must never forget that the market couldn't care less where he entered or what his stop is, if any, or what he wants or how he feels. The market doesn't even know he exists except for his infinitesimally small and trivial trade. Rather it is up to the trader to shift his attention outside himself to the market and focus on what and how much the market is willing to give him at that moment and in the moments to come.
    #54     Feb 25, 2015
  5. Hi Db,

    The second trade looks like one where I got a real "spanking" by Dax few years ago : loaded to the full, when it went to touch a significant support and reversed on me. Still remembering this trade!

    Ok few questions:

    * you say price takes longer than he likes for a continuation : how long is too long?
    * so trader get long at 40 again : what is the reason here ?

    I like how you describe the trader's thoughts: thinkingof the last trade, his win/loss
    AND about the 2nd trade ( lucky it got triggered or not,...).
    Well thinking of himself, and the trades and not the market. Triggering here the emotions
    of self-pity.

    This is where psychology/spirituality comes in :
    * in this case why the self-pity ? No it is not just these trades
    * what is so big/huge in his subconscious, that this "monster" has to show up when trading ( aka the conscious mind leaves place to the subconscious)?
    #55     Feb 25, 2015
  6. dbphoenix


    Depends on the trader. If he's a daytrader, several minutes might be too long. If he's a scalper, several seconds might be too long. This is where characterizing one's market comes in.

    As to 40, he might want to go long once price penetrates what had been and may continue to be an important range, expecting to ride it to the upper limit (which is in fact what happened and could be expected to happen according to Auction Market Theory).

    No, it is not just these trades. They merely reinforce the poor self-concept that already exists and generate yet more negative self-talk.

    As to what is so huge in his subconscious, one could come up with a formidable list. Could be ego issues, either weak or strong, small or large; self-image; addictions; relationships with his parents, particularly his father; and so on, all of which reinforce the need for a trusted plan, which can solve many if not most psychological issues, at least those which interfere with trading.
    #56     Feb 25, 2015

  7. Much of its due to "wealth wounds". Money has damaged many people , particullarly those attracted to trading, from a young age. Parents always struggling, talking bad about rich people, etc.

    Unles you view your account the same as a simulation you will likely lose money This is why traders often do well on simulators and fail in the market.
    #57     Feb 25, 2015
  8. I sense the exasperation of a well meaning teacher. :D:D:D:D:D
    We can agree that VIA trading, the psychological issues keep coming up
    and just poking an eye at these , a "formidable list" seems to be there.:D:D:D:D:D

    And that is just the start!!!!
    #58     Feb 25, 2015
  9. Db suggested to make fi of the psychological issue, by focussing on the market.
    Marketsurfer is suggesting to imagine one is on a simulation.

    I really have to find out why God created the human mind as it is.
    #59     Feb 25, 2015
  10. dbphoenix


    Exasperation? No. Just twenty years of working with beginning traders.
    #60     Feb 25, 2015