The Turtles story is a perfect example of how important psychology really is. All the traders were given the same exact edge (two breakout systems), and the same position sizing rules. They even traded at the same location. Some were wildly successful and others failed miserably. There was only one thing that was different for each trader. The thoughts between their ears.
Trading with no edge is similar to placing random trades. That is true if you define edge as trading performance that is significantly better than random trading.
Here is my story so far: As newbie, I focused DAILY on my mental state, because I was learning and had no CONSISTENT method for taking money out of the market daily. After a few years, I found a niche and was able to make consistent money. Turning to programming and automation was the next natural development/growth process. Turned away from mental analysis, and expanded trading taking advantage of mathmatical results (which does not need mental reflection on my part) for successful trading. Recently however, the last few years there have been ranges of larger PnL swings intraday because of the system(s), sizing up and fills (exposure), and once again working in some mental reflection and self work has helped balanced out some of the emotional swings WATCHING the computer trade for me (along with improving position sizing algos and overall money mangement inputs.) But, knowing I can look at the numbers (math) is also a part of the mental picture, so for me some of the mental work on myself is mixed in with some of the numbers/ edge I run on a few ATS systems. So far this has been working for me, but this is only my perspective and experience. I am sure others have done it differently and have different beliefs on which is more important. But in some fashion, IMO I think mental analysis can only help a trader on the long run. Yet, it sure is not the Holy Grail. You need mathematical results substantiating your trading systems.
Automated systems may not require thought or discretion, but they most certainly still require that your mental state is right. How else are you going to sit and watch it take a trade (or series of trades) that looks like a surefire loser, without hitting the 'manual override' button? And if you do that, how are you then not going to beat yourself over the head with a frying pan when it turns out you should have left the kill switch alone and you'd have made money? Bottom line: the human brain turns into a withering heap of mush whenever there is real money on the line. Doesn't matter whether it's trading, cards, or trying to suck up to your boss for a good year-end bonus.
Only those with severe 'wealth wounds'. This is another example of how trading attracts those, the most, who are least suited for it. Shocking! H:J!
"withering heap of mush" why does anyone trade if your brain becomes a heap of mush at the thought of risking money? an extreme example of wealth wounds. HL!J
From Douglas: "...I sincerely feel that success in trading is 80% psychological and 20% one's own methodology, be it fundamental or technical. For example, you can have a mediocre knowledge of fundamental and technical information, and if you are in psychological control, you can make money. Conversely, you may have a great system, one that you have tested and has performed well for a long period of time, yet if psychological control isn't there, you will be the loser"
-------------------------------------------------------------------------------- Quote from rolextrader: Correct. However, once you have or learned that edge, you must have your mental act together or you will have difficulty unless you are using a fully automated system which doesn't require you to think or employ any discretion. In other words, an edge without discipline is like no having no edge at all. Humans create many psychological conflicts when it comes to money all of which will undermine edge. -------------------------------------------------------------------------------- Is this what caused you to blow up as allenhobbes?
The statement is true regardless of your short term observations of a lucky trader. Short term luck in both trading and casino gambling, doesn't last.