Trading Psychology

Discussion in 'Trading' started by zentrader, Sep 7, 2001.

  1. For most people the psychological aspect of the game needs to be worked on, especially if you are trying to make the transition from good trader to expert trader.

    One way is to pay lots of dollars for courses or books by hyped up trading gurus. Or you can buy "Zen in the Art of Archery" by Eugen Herrigel. Could be the best 8 bucks you ever spent on your trading education.
  2. Commisso

    Commisso Guest


    "Zen in the Art of Archery" is a fantastic book and was invaluable to me turning the corner.....

    I was trying to explain in a thread earlier today named exit strats, how I view my trading as an artistic expression, but after pressing the submit button I realized that everything I said was pretty much the zen way of looking at things and that most people in the western world at least do not tend to see things in that manner......

    Anyway it was refreshing to hear that the book and Zen in general has affected others trading as much as my own...

    Some other books with an eastern flavor that are directly geared toward traders are, The Way of The Warrior trader by Mcall...
    Intuitive trader and the Tao of trading by koppel

    PEACE and good trading,
  3. gh1


    I read with interest both of your comments.

    "Zen in the Art of Archery" by Eugene Herrigel -- i read many years ago -- way before i started trading (i even took up archery because of it)

    These echo themes in some of the trading literature, especially "Trading in the Zone" by Mark Douglas. And these folks at Reality Trader:

    It is the mind, unencumbered by preconceptions, and yet conditioned by immersion in the market.

    Nice concept! Any advice on how to actually get there?

    In the trading psychology literature i have read, a main point recurs -- you have to trade what works for you. and so Commisso's comment, "...the Zen way of looking at things and that most people in the western world at least do not tend to see things in that manner" seen in this light -- well, is it any wonder that western traders show a penchant for technical analysis, and trading systems with rules? It is our psychological heritage.

    Maybe i'm just babbling and not making sense here. I like the concept of "Zen trading" but it seems the transition from occidental thinking to oriental thinking is just not as easy as reading a book.

    To establish a relationship with the market as an undifferentiated continuum, when we have been immersed in empirical techniques of understanding the whole through analysis and measurement of it's parts, may be asking more than can be expected. As well, this may be putting most western traders WAY outside what they know best and are most at ease with. Seems to be going in the wrong direction from the adage of trading what works for you.

  4. Babak


    One of the most powerful Zen concepts I've come across is to be in the moment. This means living now. Not in the past and not in the future. Think about this. If you do, there is no regret, no hope vs. greed, you just are. Its an amazing experience.

    I'm no master ofcourse and only accomplish a few minutes of this at a time :)
  5. Commisso

    Commisso Guest

    Babak that is an extremely powerful mindstate when apllied to all walks of life...It is the Is-shin state or "one mind".....In trading this state is invaluable....

    I can not tell you how many times in my pre-zen/pre-douglas period in which I have taken a signal on a monday and gotten slammed and then hesitated on it on a tuesday cause that thought was in the back of my mind only to see tuesdays signal make up 5 of mondays......

    Fear is not innate, fear comes with association....When you learn to eliminate the association and stay totaly focused on the task at hand, whether it is taking a jump shot, takin an oki doke pattern, or striking down someone in battle, you in-turn eliminate all fear and other negative emotions that were associated with past experiences.....

    Also I have an addict friend that I recently went with to an NA meeting, and I was almost floored when I found out that this concept is probably the most essential element to the road to recovery....."One day at a time" "One trade at a time"

    Mark Douglas explains this concept wonderfully in his book Trading In The Zone, if you or anybody else who reads this has not read that book I strongly urge you too....

    PEACE and Good Trading,
  6. tymjr


    Interesting and well thought out comments, gh1. Cuts through much of the sloganeering.

    For Zen devotees, the following comments are not intended to dismiss those beliefs or practices that anyone may find of value.

    It has been my observation that certain concepts are tossed about like shiny coins while their owners have little idea of their efficacy or lack thereof. Many statements regarding trading or an ideal state of mind appear to be tidy little aphorisms that substitute for the difficult process of conveying one's complex web of presuppositions. Thus, the individual unintentionally allows himself the safety of ambiguity and continues to labor under his own personal myths.

    Again, this is not directed at anyone who has honestly found value in the application of Zen. My problem rests with the acceptance of ideas at face value rather than questioning the validity or applicability of a statement before simply regurgitating the concept.
  7. Commisso

    Commisso Guest


    IMO 99% of the traders are wired to loose in the markets. I don't feel it is innate, realy. More, I think its just that most traders have been conformed to a western way of thinking. Of having to be right all the time, to have to know what is going to happen next, to have to be the best (not that they can be, but the best in the world), to have to watch every up/down tick in their equity curve, to focus more on the desired outcome than the process, to try and force their wills on the markets, etc etc etc......

    I can literaly go on forever with this. I think the traders who realy can break on thru to the otherside, either consciously or sub-consciously have a huge shift in their way of thinking and seeing certain things......Most of that shift whether they realize it or not is toward a more eastern flavor of thinking....

    PEACE and good trading,
  8. gh1



    Do you then believe that oriental traders are better prepared, by virtue of their psychological heritage, to be successful traders? When you say 99% are "wired to lose", you must be referring to western traders, right? Conversely, are you suggesting that only 1% of oriental traders are "wired to lose", and the remaining 99% are "wired to win"?

    Or is maybe the east/west thing a convenient (and possibly, attractive) label that points to an actual mental condition that lends an edge to trading that is more universal in nature, and not at all related to occidental and oriental mind-sets?

    My initial post was not a request for further description of an ineffable subject -- it was a request for pragmatic suggestions for achieving "Zen consciousness". Did you take classes, meditate, practice drills, or were you just enlightened? I really don’t understand how to “get there from here”, and would appreciate advice and guidance from someone who has made the journey successfully.

    It is also a critique of the efficacy of the oriental mind-set for western traders. If you believe that the best traders trade within themselves, adapting trading systems to fit their personal psychology (which as I pointed out is a recurring theme in most trading psychology literature) Then perhaps there is an occidental (empirical) approach to achieving the same condition? It seems you are suggesting that there is a mystical state of mind that must be intuitively perceived? And that we would be well served to become more oriental in our mind set.

    I am challenging that suggestion. I believe we, as inheritors of the western tradition, would be WAY out of our comfort zone trying to embrace eastern philosophical systems as a way to perceive the market. Without some practical guidance, "Zen trading" remains in the realm of "enlightenment" for most of us western mortals.

    Perhaps we are better off with a good old MACD, and an RSI or two, to tell us when to enter a trade, and a previous low to set a stop -- and not divert our resources in an attempt to achieving trading nirvana where we "are one with the market".

    Most respectfully
  9. Commisso

    Commisso Guest

    First off Gh I do not have some mystical approach to the markets at all. All of my set-ups are thru patterns in which I have a probabilistic edge.

    Second I do not think that 99% of traders of eastern descent are wired to win in the markets. The point I was trying to make is that I feel people that were brought up in a culture that has a dominat taoists/zen/confucious train of thought have a mindstate that is more adaptable to the trading arena than someone who was brought up in a culture that dosen't.

    I think you yourself said that you enjoyed Trading in the Zone, every concept in that book is has a eatern flavor to it...................

    PEACE and good trading,
  10. Commisso

    Commisso Guest

    "I believe we, as inheritors of the western tradition, would be WAY out of our comfort zone trying to embrace eastern philosophical systems as a way to perceive the market."

    Gh1 would you agree that most traders are way out of their psycological comfort zones when trying to trade. Maybe that is why 90% of traders fail within a few years?

    Maybe it is not a coincidence that most traders in the western world find themselves way out of their pyscological comfort zones when trying to trade and trying to grasp such trains of thought???

    As for trying to get from here to there. I am no expert on this subject at all. I ran across Douglas's book and then Richard Mcalls Way of the Warrior Trader. After which I went out and soaked about as much as possibly could no the subject and then worked extremely hard to apply alot of the concepts to my trading. The impact on my results was enormous.....The journey goes on

    PEACE and good trading,
    #10     Sep 10, 2001