good chunk of people dont wanna be wrong... so they hold a bad trade/losing position, so that they can rationalize that the market eventually proved them "right." this skews their interpretation of the market; they are "hoping" their position will bounce and save them, when they should be objective and look to short the bounce. the eventual blow-up destroys confidence, people start picking the flowers quickly and watering the weeds through the rainy season. there is a reason why the hardest trades are sometimes the very best trades. failure can be an everyday occurence.
Its even simpler than that. So many amateurs don't know any better when they run losses. They don't know what they are doing. They don't know near enough to be trading in the first place. But what is it they still want to do? Press the button and trade. Duh.
The financial institutions show only the face value to the general public, eventually new traders; making money in the stock market. Later on they will discover the other side of the coin by themselves; need to cope with losses.
This is a very interesting thread. I always draw a correlation between real traders and snipers. The same qualities apply to both professions. A person can have all the attributes and tools required to do the job and still fail. Having the ability to "pull the trigger" and then deal with the consequences in a controlled manner is something that few will ever acquire. Hence the high failure rate.
Good post. I'm not ADD, but hobbies often become obsessions.... My best Market analogy. The Market is a person. It speaks one or two languages (to my knowledge). In order for a Trader to understand the Markets Words, they must first learn and know the language through which the Market speaks (amongst near limitless combinations and dialects to choose from Second part is anticipation. Like a close friend, we finish their sentences. Why? Because we know how they think and react to certain situations. Why? Because we've spent countless hours with this special friend and know how they think and respond to nearly all situations.. The Market is the same. A Traders job is to finish the Markets Sentences. We can only do that if we first understand its language. And then spend thousands of hours listening to its likes and dislikes, pet peeves, irrational outbursts, favorite habits and past-times.... Thats my take, anyway.
I agree that a large part of trading involves intuition. After all if one is targeting 2-4 ES points per trade (like yours truly) one has got to have a gut feel for when prices bounce. A case can be made that ADD leads to this intuition due to extreme focus given to the subject that we love: trading. However, I like to propose that another mental condition is responsible and that is bipolarism. It does not have to be severe; it could just be a mild undiagnosed condition. I mean, lets face it, what prompts someone to study and replay reams of charts over and over nights and weekends for long stretches except someone who is gripped by a manic state? I believe those long and repetitive stretches of deep immersion in the charts under a heightened mental state of manic-depression are what develops the intuition in trading. Of course none of this is to be construed as an admission of anything.
anyone can trade a strategy that is actually working as long as they aren't a retard. is that trading? yep. now if you don't have something, well, you better have a whole bunch of voodoo/intuition/ADD or whatever the hell else you think is necessary to come up with an idea, not necessarily a system, that works. coming up a with a system should be obvious if you can count the fingers on your hand and if you have an idea that you can actually execute in real time. go don bright, rah rah rah.
I think that one of the worst things that can happen to a hesitant trader would be if they don't pull the trigger on their trade and it proved to be the correct move; in other words the trade would have been a loss. The problem here will be that ,even though they are "relieved"' they did not commit themselves to the trade, they have now underminded their trading system ,which in turn causes more anxiety through self doubt. Head games can be torturous. Fear is also a destructive element to trading, whether it be self doubt (confidence) or being undercapitalised for what their specific purpose may be. Personally, I can tell you I honestly have no fear in trading as my fear has been exorcised by my lead footed daughter who insists driving with the cell phone in her lap or talking while driving,steering "cross handed". Fear,yes ....that the phone will ring.....
The fallacy here is , using the word 'failure' Don't know how many of you are horse players. Pro's at that game (don't laugh, they exist), routinely rip up tickets. Much more often than they cash in many cases. But they still make a profit at the end of a season. If every loser is perceived as a FAILURE , then you do yourself a disservice.