One can only learn to trade without emotion if well enough capitalized. Longer term trading offers much more opportunity for that. Decisions are made more slowly and deliberately. Somewhat like the fact that someone needs to learn how to play long games of chess before being able to play speed chess.---It would be the very very rare occurrence that someone is successful at daytrading that hasn't learned to trade successfully long term first.
(A) So, you do you mean to say that issues of capitalization is the only cause of emotion in trading? Please correct me if I am wrong, 'cos that statement is incorrect. Or, do you mean to say that under-capitalization could result in additional emotions for a trader on top of all other emotions that come into play when trading? If this is the case, isn't this in itself an opportunity to learn to manage one's emotions? I am not saying all traders should be under-capitalized, but seems to me that under-capitalization could be a positive thing if approached properly. Further, how is this issue of capitalization an issue only for intra-day traders? (B) I am little dull, so, I don't see a connection between your first and second sentences. So can you help me bridge the gap? Also, I am having problems figuring out what that "that" you are referring to in the second sentence means. (C) You understand that in intra-day trading, decisions are made pre-market (and are in the trading plan) right? When we make those decisions they are slow and deliberate too. We don't make decisions on the fly during the trading day. We execute the plan; and, only trade signals that we are prepared to trade (are part of our trading plan). If the market does not generate any of the signals that we are prepared to trade, then we don't trade for that day. If you understand this, how does your statement above have an impact only on intra-day trading? Curious. Finally, You are not a chess player are you? You don't learn by playing the long games. You learn chess by understanding the formations, and most likely you play against yourself using classic chess books as teachers. Once, you learn those formations, you then experiment with variations. None of this occurs in a tournament or match setting. Once you have a command of the formations and their variations, then, only then you choose to play the long or/and the fast game -- it really does not matter which format you choose, although different people have different preferences -- just like trading! Interesting that you used the word fact in the quoted sentence! Regards, Monoid.
@Buy1Sell2 In today's western world, there isn't such a thing as lack of capital to trade. I can send my 16 year old son out to mow lawns, make $100, and stick that in a forex account... Where he can then choose to daytrade, swingtrade, or long term trade. However, for most traders there is definitely a lack of emotional capital that will allow them to trade correctly. Secondly, it is impossible to trade without emotion, and this is scientifically proven. Without emotion you can't even pick out what clothes you will wear today. This isn't the post for it, as I am trying to keep this to a trading journal...but I can guarantee you have emotion when you trade. Start with defining what confidence is... And why you "feel" that. As for my own trading, thanks for bringing up what you see as an easier path to success. What I am trying to do is take my trading up a notch by trading OPM under very strict requirements. I didn't know this going into it, but this process is forcing me to get rid of some bad habits.... And it is revealing some blind spots I didn't know I had. Now you might see a building getting partly torn down, but it is only to repair faulty workmanship in building the foundation... When finished, the building will be much more valuable and able to stand solid in today's trading world.
Hey Yukoner Trust you got in some good down time / focus on other things this weekend In about 17 hrs we're on ======================== Let's do a little inventorying and see what we know/ have; While trading; you have emotional swings - all the way from scared shitless..., to greedy - from complete doubt..., to I got this Also while trading; there creeps in a penchant to trade the ole PnL But..., you also have.... You can identify these emotions/ penchants You can acknowledge em You can set em aside and simply observe them You can get back to trading Further... You can be patient. You can read the mkt You can take your signals (trade) You can take a loser..., or a winner You can move on to the next one And - you have the check mark - checkoff (I especially like this one) You can do your job (you've proven this fact) =================== All in all - I'd say the inventory is well stocked Could it be improved - sure - but..., right now..., we got what we got Best we make good use of it ========================= Next week - there will be bumps..., pot holes..., set backs..., fuck ups..., and who can say what else - for all we know the mkt could go ape shit crazy It not what happens around us..., it not what happens to us...., it not about what we think.., feel..., want..., or don't want...., and it not what the mkt does.., or doesn't do It only about what we do There many good tools at your disposal (in your inventory) Sir = put them to good use And simply do your job - every day..., every trade =============== Get good rest tonight..., clear / center the noggin - and let's make ready for tomorrow ======= An aside Many will wake up tomorrow - head in to their 9 to 5..., and know (pretty much) what is expected of them..., what they will be doing / working on I can't fathom the boredom this creates We..., otoh..., will wake up tomorrow and head in to total uncertainty - absolutely not knowing what will / what is going to happen..., not know what will be required of us All we know is..., we must identify it.... then act accordingly Hell..., even then we don't know the results (outcome) of our actions till its concluded and it time to move on to the next one But..., it sure do keep one from getting bored I do so love this job (never in love with it - mind you) ===================== Here's to all of us - simply doing our job RN
Boy, sounds like a miserable way to make a living. But I love it too! What is wrong with all of us? All the best tomorrow, Yukoner. Rooting for you. Regards, Monoid.
Buy1Sell2 is using a mechanical system or automated system. Thus, I'm not sure why he would bother dropping in on your thread about the "psychological" aspects of trading for those NOT using automation or mechanical systems unless he just wanted to disrupt the thread as he has done in others. Yeah, its been proven via psychological research that even top professionals in an field of business and sports are not able to "remove" the emotions from their careers and not able to remove the emotions when they're doing their jobs. Instead, they're able to continue their top performance because they've learned how to master (manage) their emotions when doing their jobs. Some companies even now have "mental health" departments or have in house psychologists if needed by any employee. One particular fortune 500 company stated that some of their top managers use these services. In addition, many of the world's top athletes use private psychologists or a psychologist that's been hired by their team. In today's societies, individuals are under more stress, pressures, expectations than ever before...that's why psychology is a booming business because so many people need it.
LOVE IT! And what a great start to the upcoming week. Some real pearls in there... and so glad it is in the journal, so I can read it and reread it. Yep @Redneck I took the weekend to unwind. Spent most of it in Victoria, which was stunning with the sunshine and cherry trees in blossom. I did some reflective thinking, reread a lot of the posts from last week, and I also got a great idea from reading some of Dr. Brett Steenbarger on "Visualization Techniques for Traders". So I thought back to last week and the trades I didn't take, or did take but then got scared... I imagined that moment and how I felt, but then I imagined myself continuing to do the correct trading process. I did that twice. So yea, my brain had the experience last week, but on Saturday it also had the visualization of what would have happened had I correctly traded. Checkmark. Sir, I'm ready to simply do my job.
Insufficient capitalization is the main reason that traders trade with emotion. The other reason being a need to be right (which is part of insufficient capitalization). Longer term trading lends itself better to traders with less capital since correct position sizing for stops will create less use of margin. Day traders may know the signals they will take but they will have a much shorter time frame to take those decisions than the longer term trader will have. Chess is learned by playing the long games before playing speed chess. Most daytraders will lose due to undercapitalization.
I don't use an automated system. I review market conditions/data and then make my decisions. I trade without emotion. I risk no more than 2% of TLNW on any one trade/idea, so there is no reason for any emotion.---Thank you for your time.---
I am sure you know GM Maurice Ashley then. Read about him or listen to his interview in NPR. He says he started out playing blitz format chess before even being interested in the classic format. He attributes playing in the Black Bear Chess Club (a club that predominately plays blitz format chess) for his interest in chess. Maybe he doesn't know what he is talking about! OK. Thank you for your opinion. All the best. Regards, Monoid.