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Trading Psychology

 
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Jean-Francois

Trading Psychology

Having trouble with the psychology part of trading?  Welcome a real psychologist - Brett Steenbarger's; His Blog, recorded webinars and books should help to sort you out...
Notice how Shawn, Nate, Todd, Curtis, Brian, Rex, Doug, Lukas and finally Jeff are all so mellow and relaxed when trading - unstressed - just maybe they follow some of these principles
https://www.youtube.com/watch?v=K_Lzb75aG3s
https://www.youtube.com/watch?v=kDGu5bwz0o0
https://www.youtube.com/watch?v=rD5nQzbm0iI
http://traderfeed.blogspot.ca/2017/12/brett-steenbargers-trading-psychol...
enjoy the newly found calmness....

 Then there's the famous Mark Douglas --- https://www.youtube.com/watch?v=iQVexoV0Z6c and this (1 of 4)
https://www.youtube.com/watch?v=LA1hEZPh8rU

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Sun, 05/06/2018 - 1:09pm
 
mckay

Thank you for the links Jean
I'll def check them out
I wish you the best

 
Jean-Francois

Btw part 2 of Mark Douglas' video series is really good... just saying - no self sabotage - and only gets better from there...

 
FxWeirdos

Thanks for sharing

 
FXGold54

Mark Douglass is Great, need to read his book again (or watch the video)

 
Rookie

Dog gone it JF every time I get my followed topics followed up on you Beee's just keep making more.
Thanks for the post.

Allen, I have all of Mark's books and a few papers, They are just great. As you say over and over again...

 
Jean-Francois

I like to listen to the 'Trading in the Zone' Audio book.... https://www.youtube.com/watch?v=FQ33TFitf4g while i cruise the threads on here.

 
Brian-Dream-Trader

Great posts as usual, from our fellow bees. Thanks JF. You are one of the best.

Enjoy!

BDT

 
gpdno

I have listened to the "Trading in the Zone" audio book at least a dozen times. This book has had a huge influence in my profitable trading.

Brett Steenbarger also has a number of great books.

Ari Kiev - "Mental Strategies of Top Traders" is yet another great read.

Peace,
Greg

 
Rookie

JF, I listened to the first of the series posted last night. good lesson.
I have two favorite parts:
1. I'm gifted with what he describes as pattern recognition.
2. Having great confidence without the stats to back it up is the definition of delusional!

Sounds just like someone I know, ME. That said I realized that and decided to change from delusional to actuation with last nights Euro overlap.

 
bruced

These are great resources and another perfect example of the remarkable business model of Apiary Fund - thanks for sharing with the hive!

 
clebleu0

It's been said that the mind game of Trading is 80% of the challenge...
I'll definitely check these out!!
Thanx

 
Jean-Francois

For those looking for Brett Steenbarger's book 'The Daily Trading Coach' - here is link to the 370 pages pdf file you can download;

https://atoast2trading.files.wordpress.com/2013/02/the-daily-trading-coa...

 
Rookie

Thx JF, got it.

 
Orock

thanks for sharing

 
ravindren.sankar

THE ONE THING - BOOK BY GARY KELLER was referred by Robbooker in one of his videos on Youtube for getting more focused on the trade. I read the book and there is difference between how I traded earlier and now. The improvement is positive. Hope all the bees will read it if possible as it is really good.

 
Marubozu1

Agree, Mark Douglas stuff is great. I like listening to Rob Booker too. Will look up the book. Thanks for sharing.

 
Rookie

It’s simply amazing how we find stuff. I was searching on the word "yoga" in our forum and hit on the following discussion link.

https://apiaryfund.com/training/discussion/psychological-aspect-trading hr. 20min.
Layne Rasmussen: layne@apiaryfund.com
I think this white board is from 2013 I recognize a few of the folks like elemental one and matt lydon, if you Bee's happen to have the links to the rest of laynes series please post them.

Psychological Aspect of Trading

In this training class we will talk about the psychology that comes into play when we trade in the markets. We will discuss the positive and negative impact that fear and greed can have on our trading account and trading experience. We will also talk about techniques to help you let go of previous trading baggage. These techniques are designed to help you let go of the negative emotional impact of past mistakes so you can better learn from them and move forward in your trading. We will also discuss techniques of Neuro Linguistic Programing that you can use to literally program your mind for success. Yoga mats, toe rings and incense are not required...lol,,,

https://en.wikipedia.org/wiki/Neuro-linguistic_programming, Anthony Robins (Unlimited Power & Awaken The Giant Within)
YouTube references;
Robert Smith, Tapping - pressure points in the body - fight or flight fear reaction
David Childerley, programming for success, Money Mastery emotional relationship with money
https://www.youtube.com/watch?v=skHwFjaCx2Q
also Louise Hay, same topic
Michael Losier (Law of Attraction) (re movie "the Secret") Power of your words,
Self-talk don't use negative words like don't or not or no use the reverse "okay then what do I want", I am in the process of...

 
stevecooper1001

I like to listen to the psychology classes by Curtis. For me it is the most important element of trading. I lost my first seven trades on my silver account but kept doing my trades and turned it around.

 
Rookie

@stevecooper1001,that supper news, thx for the post.

 
rwfthr

Thank you for the post and the links.

 
MTG

Great job

 
Rookie

I got the above sessions done so being a glutton for enlightenment, I went looking for more,

Managing Your Trading Psychology
Nate explains the emotional pitfalls that often plague traders in any investing market and the importance of remaining objective during a position's management. Afterward, Layne goes over the management of emotional responses for each possible outcome for a trade.

https://apiaryfund.com/training/discussion/managing-your-trading-psychology

See if you can guess how old this one is.....the winner gets 2.5 Pips....:(

 
txpilot71

thanks for the posts. I am looking forward to viewing each one in detail.

 
l.c.burgos

Thank you for the links, will ck them. Its an area to work stronger in the days ahead

 
David H

Thanks for putting all this great trading psychology material in the one place. It is fantastic to have a great trading plan for the mechanics, but without strong and disciplined trading psychology, self sabotage can emerge the winner
I have read Mark Douglas 'Trading in the Zone' several times and just love the way he helps you 'get in the zone', so with a clear plan, much practice (to give confidence in the plan), your psychology allows you to quickly see the setup and without hesitation 'take the trade' (become a dispassionate observer of yourself as a trader)
From the above I see there is much more than Douglas, and will start working my way through the other reference material - thank you

 
fayekaipat

Thank you for sharing this material!
I'm a new trader to the Hive and i'm soaking up all the info I can get my hands on.
looking forward to reading them.

 
Jean-Francois

To anyone applying any of the proven concepts brought forward by this thread and its topic into their own trading will set themselves up miles ahead of most retail traders....which btw work on this matter last in their own personal progression; you on the other hand are taking the appropriate steps to move forward. jmho Keep up the hard work.

emotional spiral.jpg
 
Rookie

JF, way cool post and image, thx

 
Sherry

Thank you for sharing all of these resources. They will be very helpful. I have began reading Trading In The Zone, it’s a great book. I never understood how important psychology was in trading, but I am realizing that it’s the most important thing.

 
Jean-Francois

The Baseball based movie 'MoneyBall' starring Bard Pitt which is available on Netflix presents the most Interesting view on Statistics in general and how we should trust them in our own application of our art.

I just watched it... it's a really good movie even if your not into baseball, the basis of trading players from team to team is based on their statistics to optimize the teams performance, much like we trade our risk, to stay within our profile.

well worth the watch, even if only for the entertainment value.

 
Rookie

no JF its a great movie! can you imagine the manager that pulled that off? I mean I am willing to bet the movie doesn't come close to the struggle he went thru, how many times he may have had self-doubts and so on. I watch it every few months. In fact, I'm about due for another dose. Thanks for the post!

 
Rookie

Seven Steps to make a deep down change of unwanted habits by Karla.

https://www.elephantjournal.com/2013/06/reprogramming-the-mind-to-change...

The Secret of Self-Transformation: How to Change Our Behavior One Step at a Time.
The process of change:

The process requires all the three parts of the mind. Therefore,

Take action with awareness and conscious efforts. This is the function of the conscious mind.

Take action at subconscious mind with positive feelings: The change has to take place at the subconscious level with respect to one’s behavior or habits, unwanted emotions or feelings. It can be changed only through subconscious programming, through meditation, sending auto-suggestions and creative visualization to the subconscious mind. This must be done in a very relaxed state of mind.

Seven steps to make a change:

Know the change you want to make or habit you want to change (ask yourself what behavior, emotions and feelings I want to change or what I wish to do differently-Make a list). Make the commitment to change. For example, I became aware of my unhealthy eating habits and made the conscious decision to change them.

Put conscious efforts to change and support it with action and practice it during the day. Replace a negative activity or thought with a positive one. This will also change your “auto-response.” When I decided to change my eating habits, I made a conscious effort to change by creating a meal schedule and list of the foods that I could eat each day.

Relax your body (Yoga, Pranayama-Breathing exercises).

Relax your mind and Meditate. Meditate when you don’t know what else to do. I used meditation techniques when I had a craving for certain foods.

Give messages or affirmations to your subconscious mind for the change you want to make within yourself. Affirmations must be in positive terms rather than negative. For example, I will eat healthy food vs. I will not eat junk food; I will get up early in the morning vs. I will not sleep late; I will do yoga and meditation every morning, etc.

Pray to Supreme Power and thank Him for His guidance and help, and let go…

Self-introspection, self-evaluation, and practice

 
faithyy

Woooow! thank you for sharing. Been needing this tbh!!

 
gpdno

Daily meditation has been part of my daily trading routine since the beginning. I helps me stay calm and focused.

Peace,
Greg

 
Jean-Francois

I can be so wrong about the euro some of the time. When trading, I normally pay too much and sell it too cheap. I size my positions wrong, relying on a default size most of the time. I stay in my positions long after I should have been gone. I sometime deviate from my plan when I shouldn't. I start trying to fade the commercials, and let short term noise convince me of a new market move. On occasion, I will let people's comments affect my mindset and trading decisions. That being said, I do play a better defense game and will come out way ahead most of the time, but this week has me beat down. This is when I must fall back on Mark Douglas and the likes

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jacquelinedela

Thanks for the link.

 
Orock

u get a like

d:>}

thanks for sharing JF

 
leonelmb

Excellent material of Trading Psychology Jean thanks for sharing!

 
Rookie

Above I posted a seven-step method to change your subconscious mind. I'd like to ask you a few questions. No Not trick questions but ways to set your self up to actually change the sub-conscience ingrained thought pattern.
1. Do you have a sub-conscience pattern you want to be changed?
2. Two do you believe that the sub-conscience mind pattern can be changed?
3. Do you believe you can make the change?
4. Define very graphically the change you are desiring.
5. Tape it someplace where you see it at least once daily.
6. Dewell on the benefits of this change once in a while.
7. when going back to review do the rinse and wash.
8. Holy carp a new world order, realize it you have changed that sub conscience thought pattern.

So I just went thru this life-changing process. It works. Took maybe two weeks more or less.
What did I change? I now have patience... the ability to wait without internal conflict.

 
Rookie

Revenge Trading is a big subject in trading. It can be very subtle out just out right hugs, in most cases, it is always destructive to your bottom line.

Vess posted the article a while back As it is very relevant to this topic I thought I would repost it here.

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Jean-Francois

True that

d398947fe84c73f384f3f0d26f214376.png
 
Rookie

I WILL 2ND THAT EMOTION!

 
Rookie

Are you a risk taker? While googling this subject you would not believe all the subcategories. So why am I researching this even lightly? To my wife Forex trading is gambling, Shaw does a summit video way back explaining how with the Bengermin formula how efficient and safe Forex trading can be even when compared to all other investments. Did you know that risk-taking is biological?

Recently I was accused of being a gambler, well I agreed with that after thingi=king about it. But upon reflection am I? I don't do the things a gamble does. So I'm not a gamble but a risk taker and have been one in business and entrepreneur forever, I called them calculated risks.

Shawn calls it the Benjamin formula.

In this thread, there is much discussion on the Psychology of trading. We often recommend various educators and refer to getting in the Zone. But what is the real bottom line of our personality?

is it "The Investor Profile focuses on 4 personality types of traders: Aggressive, Intuitive, Analytical and Methodical. The amount of risk a trader is willing to take as well as the emotional involvement of the trader is used to determine the final personality type. aggressive,

I think we need to look a little deeper than that into the risk personality that establishes our risk tolerance and risk seeking.
As Paul Jones said we are risk managers first and traders second.
This is an area of constant research for me,
https://apiaryfund.com/forum/benjamin-formula-0

So for those of us that excel at taking a risk, a feel-good thing calculated or spontaneous we cannot be ultimately successful until we learn to control that aspect of our personality.

Once that happens all the rest of trading falls into our lap.
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This article is an interesting read and some of the biology behind being a risk taker for both men and women.
https://www.psychologytoday.com/us/articles/200011/are-you-risk-taker

The other side of the coin;
https://en.wikipedia.org/wiki/Risk_aversion

Continuing the serch one finds healthy attitudes of risk also.

The bottom line for risk takers when brain scans are performed the risk-taker has less sensory realization of the action and thus is trying to get that feeling by taking more risk.
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alexteo468

Thank you RNM for enlightening us on "Are you a Risk Taker".

You have quoted an article by Mr Marvin Zukerman, who wrote: "Modern life, with its protected cultures and curtailment of war, has not wiped out the need for excitement. Some people find it through other people, in relationships and sex. Others need more of a thrill, and go hang-gliding or bungee-jumping, although the most common everyday outlet for sensation-seeking is reckless driving. My work has shown that people have basic need for excitement—and one way or another, they will fulfill it."

From the article written by Mr Nial Fuller, "What Trading Legend George Soros Can Teach Us About Trading" (found at his website www.learntotradethemarket.com), I quote:-

["Risk taking is painful. Either you are willing to bear the pain yourself or you try to pass it on to others. Anyone who is in a risk-taking business but cannot face the consequences is no good. There is nothing like danger to focus the mind, and I do need the excitement connected with taking risks to think clearly. It is an essential part of my thinking ability. Risk taking is, to me, an essential ingredient in thinking clearly."

I love this quote. To me, he is saying that if you don’t enjoy taking risks, specifically financial risks, you aren’t going to survive as a trader. Risk helps focus the mind he says, I am the same way; I feel like I am more keen and aware of the market when I have money at risk. But, there is a fine-line between being focused and being over-involved and over-trading. Risk can make you focused, but you don’t want to spend all your time watching the charts, this can lead to trading addiction.

The key point is, you must really love this ‘game’ to thrive at it. Some people just are not mentally cut out to take financial risks and be able to operate effectively in the market with their money on the line. That’s OK, this isn’t for everyone, but me personally? I love it. You probably do too, that’s why you’re reading this.

"If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring."

Trading how you should trade to make money is relatively routine and predicable. Meaning, there shouldn’t be huge ups and downs and changes in your trading routine. You should be going through a predictable plan of action each day as you analyze the charts and there shouldn’t be a huge variance in your trading behavior each day.

If you are over-trading and risking too much (gambling) you are experiencing high-highs and low-lows, emotionally speaking (and financially). This can be fun and even thrilling, but you’re going to end up broke. You don’t want to end up broke so try to make your trading as ‘boring’ as possible. By ‘boring’ it doesn’t have to actually be boring – it just must be non-emotionally-charged. Learn to love the ‘pain’ of routine and that routine will turn into profitable trading habits. Someone much wiser than me once said, “Suffer the pain of discipline or suffer the pain of regret”, let that permeate through your mind for a while.

"I’m only rich because I know when I’m wrong…I basically have survived by recognizing my mistakes."

Finally, just like Soros, I too have survived this long in the market by recognizing my mistakes, admitting I was wrong and fixing the problem. It also means that I recognize when a trade I entered is not right and get out.

Trading is not for the person who cannot admit they are not perfect or when they’re wrong. You are going to be wrong a lot in trading, especially in your early / learning days, so get used to it, embrace it and LEARN FROM IT or pay the price.]

The last point though not related to taking risk, is the greatest hurdle to our psychology, our EGO. As advised by Mr Paul Tudor Jones advice "be flexible, let go of your ego and in Mr Nicholas Puri's "The Duomo Initiative", he quoted a mantra "Adapt Like Water, Soak Like Sponge" meaning to be flexible with your conviction like water and to keep learning like a sponge.

 
Rookie

Alex, how did you come to be so smart and know so many book quotes? you're awesome

In Neils quote above is more in-depth at https://macro-ops.com/lessons-from-a-trading-great-george-soros/

On Risk Taking, Forming Hypothesis and Being Wrong
then On His Theory of Reflexivity
Reflexivity sets up a feedback loop between market valuations and the so-called fundamentals which are being valued. The feedback can be either positive or negative.

down the page a bit;
Economic Theory
Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited.
-----------------------------------------------------------------------------------

Soros was indeed a great trader however what he did to the bank of England was not in the best interest of trading and change the world of trading forever with The Dodd–Frank Wall Street Reform and Consumer Protection Act .
https://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_...
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goldvelvet25

thanks for the info didn't know Mark had audio books out

 
Rookie

https://apiaryfund.com/calendar?event=38623&d=#calendar-event
Trading Psychology
Type: Live Discussion
Wednesday, August 8, 2018, 8:00pm America/Chicago
Instructor: Curtis Cooper

the rationalization of I'm image trader I don't need to do any homework, any analysis! I don't need to know the stats I just look at it and I know.

Even just a few in our back office.

This discussion even had some I'll word's from a funded trader. But this trader refused to show any stats.
I know why and their statement is 100% BS. That trader if they are actually being honest is hiding stats and will fail.

Curtis has been here since day 1.25 teaching and trading. You think he hasn't seen and heard everything and trader can toss out?

This is a good down to earth lesson on your plan, your homework and the cause or effect of ignoring them, no matter the rationalization of why not!

 
N.M

https://soundcloud.com/topsteptrader-limit-up

This podcast is frequented by traders featured in Market Wizards books and it is great to get a view of how elite traders think and act.

 
Rookie

This interview with Michael Covel with Ed Seykota is one of the most down to earth I have heard in a long time.
There is not another extremely earth shattering just common sense about a few aspects of trading psychology. Its an hour long and covers a wide range of items but there are some real pearls of wisdom tucked away in there about trading and personality.

https://en.wikipedia.org/wiki/Ed_Seykota, BIO

The podcast http://hwcdn.libsyn.com/p/7/d/a/7dadac90e82c5ce7/355.mp3?c_id=9212868&cs...

http://www.seykota.com/tt/Resources/default.html

 
Rookie

Managing Your Forex Trading Expectations from Babypips

https://www.babypips.com/trading/forex-expectations-20150209?utm_source=...

Expectations are our own personal version of the future. Using your knowledge of how an environment functions, you project into the future what you believe to be true.

Expectations also bring emotional highs and lows. Because you naturally expect your beliefs to be right, you’ll feel great when the future matches your expectations and feel bad if it doesn’t.

What does this have to do with forex trading?
forex expectationsOur minds are gifted with pain-avoidance mechanisms that help us cope with physical and emotional suffering. Think about it. Don’t we all remove our hands instantly from a hot surface? I’m sure even Cyclopip has learned not to put his hand over the fire.

Pain-avoidance in trading is different only in the sense that it deals with emotional pain. To avoid the pain of having wrong expectations, you subconsciously block any information that would invalidate your idea. You usually rationalize, make excuses, belittle the significance of conflicting information, and sometimes even straight up lie to yourselves just to feel good.

Dangers of mismanaged expectations
There’s nothing wrong with having expectations, but problems could arise when you set unrealistic expectations. These comprise could-be-profitable yet highly improbable scenarios because you wanna be a billionaire so freakin’ bad. Because these expectations rarely turn into reality, you usually feel disappointed and frustrated when things don’t turn out so well.

What’s worse is when this situation happens over and over again. Feelings of disappointment and frustration can compound and evolve into anger and resentment towards yourself or the even the market. Since you feel discouraged, you might eventually give up and stop trading altogether!

The classic case of having unfulfilled expectations in trading is sticking to a losing trade. The price action might trend in the opposite direction of your position, but you ignore all these obvious signals and focus on insignificant details that are still supporting your idea. The clear pattern is lost on you because you find it too painful to accept.

Protecting yourself from unrealistic expectations
In trading and probably also in life, managing what we expect is of utmost importance.

This doesn’t mean that you shouldn’t set any expectations at all. If you remove expectations, you run the risk of not feeling that something is at stake, which could draw your focus away from the trade to other things.

On the other hand, if you are able to manage your expectations, you can easily alter your view of the market depending on what price action is telling you. There’s nothing wrong with expecting the market to move to a certain level, what is deadly is when you are so stubborn to maintain your view even when price action is telling you otherwise.

Learn to let go of the things you cannot control (the market), and manage those things that you can (your expectations). By doing so, you are able to take rational trading decisions, which would hopefully lead to more wins than losses.

 
Trader1

they don't even send you a congrats you're funded email or anything once you get to gold 3 :D LOL - it only took me 7 months to get here - comoooooooooooon

 
Rookie

@trader1, very, very kewl beans, long time no see, Super Congratulations on this achievement, you certainly earned it.
If you don't get the paperwork shortly you may want to ask for it before your first paycheck. Anyway that what I had to do also.

 
6stringtao

Hey Rookie,

Michael Covel's Trend Following Podcast looks aweseome! I don't think I ever would've come across that on my own. There's a lot of good sharp folks on there, can't wait to dive in.

 
rayholding1234

I'm too old in the tooth and have been trading too long to worry too much about psychology, discipline and sticking to the trading rules. I only trade the gbp six pairs. Use the hourly charts no stop loss. I look for a 10 pip take profit or more if market moving fast. I have had one loss in my last 80 trades in my funded account. I only trade with micro lot size ie 0.01 . As I am retired , I can watch the market most of the day and generally do not trade after 6pm my time CET as I live in spain so mainly british banking hours. If I have carry over trades still running I sometimes have a pleasant 40 odd pips credit by the morning, which for me is 10am to 11am as I usually don't go to bed until 3-4 am. My default settings are tp 40 pips and 0. stop loss. I realise this is not in line with conventional trading rules but has worked for me through silver 1,2,3, gold 1,2,3, and now funded 1000 and 2500. I am looking forward to my first share of profits this month unless I have a very poor run of losses in the next few weeks. So fingers crossed! Good luck to all those in the hive ploughing their way through silver, gold and seeking to gain a funded account. I nearly gave up in March as I was having trouble doing the 5 trades , 5 days running with 5 winning days. Left it for well over a month and was about to cancel my subscription but thort I\ would give it one last try. Glad I did, so don't give up hope. Have a look at the gbp pairs as they often follow the direction of the gbpusd but not always. It was this fact in March April and May that I managed to get the above mentioned task completed. And I never looked back from then. Before I reached funded , throughout silver and gold my win loss ratio varied from 5-1 to 7-1. Somehat improved since I became funded. I busted account several times reaching 5% limit and was stopped trading 3-4 times for a day but I soon recovered. Fortunately it hasn't happened since being funded 2500 but that doesn't mean that it won't. Yestereday I was carrying over a 1200 pips deficit on all six trades as they all went against me but today 3 of them came back into profit and with further trades totalled 143 pips profit and deficit down to 700 odd. Seat of the pants trading, not to be recommended for those of a nervous disposition!

 
williestrydom33

Thank you Jean,I wiil defenitly look at the links.

 
robunited

@Ray, that was really a very nice post! Truly enjoyed it. It went through all motions & stages ;-)

 
mjtallo

I have only recently discovered, through experience, how important how you feel every day is so important to trading. It was reinforced one day when I "forced" myself to trade. Should have done something else

 
Producer

Thanks for sharing @rayholding1234 ..... Glad you stayed the course and didn't throw in the towel. It's good to hear these stories of success. Keep on working hard everyone!

 
skw57

This is a fantastic thread. I will definitely go through the links given. Mastering your psychology in trading is huge, an understatement of the largest magnitude. How your mind process's things as you go through all the emotions while trading definitely impacts what you think you see as opposed to the reality of what is going on. Thanks to all.

 
KohlentAnne

I find what I want in the market, or the fear of winning

In the chat, some guys and rookie, asked me a question of being in 6 month goldII , and stuck ... since 5 monthes

Fear of loosing , everybody knows the concept, but

fear of winning ? a football player said that He refused to be selectionned in the National French Team, he is pretexting not getting ready. He was a performing player but his fear was not manage.the footballer pretended not to be able to play in the national team. Selected, he refused for fear of disappointing the team. When He was selectionned, he broke his leg. After many weeks, he understood his fear of success . He had a good results but at least he was not be selectionned another time in the national team.

Fear of winning is the way of making the bad decision for being sure that in this way, I am loosing.
I gave you example, I traded like gambled just with the screen without any indicators , or I traded in my bed.
Yesterday, someone in the chat asked me about the high potential in demo account over 20% and the hole in the Gold II less than $20 ... I was thinking about that?
R and another guy wrote the word " what is in the trading your fear,?" I got it .It was not to lose but to win...my life can change and and my faith may falter. I did speak about that to the manager of Apiary, He understood that and encourage me to follow the beeline.
My personnal history in trading was a nightmare , I had a good expectancy and disciplined trading in national Bank in UK and earning enough monney to be in retirement at 40 years old. But instead of giving my money back,the broker in this organism , an offical one closed my account ...so that s not the trouble in this thread... I have to prove that I am not a lier neither a thief and it s my account and I did earn monney.

In the psychology , in my mind , I understand yesterday in the chat, that I was planning to loose, because I won t have any trouble like I had in the NationalBank . I read this trhead , I saw the conference of Marc
https://www.youtube.com/watch?v=LA1hEZPh8rU
and manage my fear of winning
I imagine how can be the life , if I do my job, how I can help and pay the financial trouble of my brother ( christian father in a catholic church ) , how can I change the life of my family.
I did not imagine how the fear made me so foolish in the trading room.

1/ I was totally in my job , focus with information and with my graph, sitting in a chair , and awake .I was very calm
2/ I did the analys of the chart and I did a precaution if it going like popup in EUUSD , so I manage some buy in case of and short like the Teacher , Shawn.
3/ I feel so confident , that I did not close my trades , over 55/40 in 1 pips .. ( thx bug alveo) I traded more positions than it s allowed. The result today is good; But My " ass" is not interesting

I just want to share
that I encourage people to read , to write in the chat , to clear their mind with many questions ?
may be understand why they are stuck in a step in beeline.
What s happening if you lose your money?
Are you going to stay in your job?
are planning to explain that to your wife and kids ?
If you are in retirement , how are you finding monney?
I never ask what will you do if you will earn because the dream is not action and life.
2/ How are you trading
are you in your desk ,?
did you all the study before trading ?
do you have plan A if it good plan B if it s not and ?
do you know how much is your take profit and stop loss ?
do you manage the number of loosing trades ?
did you do all the job, like information, the events and so on before going on Alveo
3/ Did you have a plan , to manage
- the loss
today I was focus because it can be quickly bad side
if the market did not go to the same side than me, I cut at 3 pips because all my earning was at 4 pips or more.
sorry Rayholding , only one trade loosing is very far from me ..;)
- the managing risk , and take profit

conclusion After this topic , I hope I help you or some of you. Thank you to read and see my post. I hope you understand , and I wil be please if someone wants to correct my english ( not my mother tongue)
Anne Khloe

 
Rookie

Anne, whats to correct, thanks for the post.

 
Bugsymcclain

I was looking at an old forum on Forex factory about making 10 pips a day. The basis was to quit after getting 10 pips. It didn't say what size lots he used, but he said his TP was 10 pips and his SL was 90 pips. Ive used a 60 TP and 20 SL but never a 10 TP to 90 SL?? It seems he is constantly monitoring his trades, so that part makes sense about the 90 SL, but why even have a SL then??

 
Rookie

Why SL, because you got funded having an SL. It's like an APiry thing,

However, I have been trading using a 5 or 10 pip TP and a reasonably large SL and it works fine as long as I don't over trade and let any get away.

 
gabill007.oj

Thanks for the links. Really helped me

 
Rookie

At the end of the day, there is only one rule and it is number one.

"PROTECT YOU CAPITAL"

Do that and all the rest will follow.

 
rayholding1234

just an update on my previous post. I have picked up over a 1000 pips during the last week just using the gbp six pairs. Each day when I get up about 10am to 11am (I don't go to bed till 3-4am) My computer is left on overnight and will be on my alveo page. Last two nights have taken a couple of trades where the charts look positive with my default take profit of 40 pips and each morning I have woken up to 80 pips even before \I start the days trading. I have changed my selection process for determining direction . Earlier in the year I was using Josh Martinez's London Break method ie once the 9am (10am for me in spain_ candle was complete you take the last five candles not including the 9am that's just completed and if out of the five three were down, you went long, if three were up you sold. However, although it worked earlier in the year and got me through silver and gold , I have recently changed my selection to the T-Line system promoted by a chap named Steve Bigalow (on you tube). He uses the 3, and 8 EMAS with a 50 and 200 SMA. If market is above the 50 only look for longs and if below look for shorts, but only if the 3 and 8 are correspondingly above or below the 50. Once you have determined that, the market for a long, should be above the 3 and the 8. You will see that the market hugs them and if it moves away from the 8 it will invariably come back to test the 8. That is an opportunity to buy back in . Once you are in you can stay with it until a candle closes below the 8 and then you can take your profits. However, I do not run the profits as I usually take a profit between 10 to 20 pips and look to get back in on a dip. Today I have sofar taken 260 pips in 14 trades, including 17 on a eurusd (I know not one of my six pairs) but it was the NFP and it usually moves eurusd.. ALL the rest on the three remaining pairs which are not still tied up in deficits. I have been holding gbpusd since 21st September , cad since the 1st oct and jpy which I missed taking while I was gardening, all on the hourly chart. However, my 1250 deficit a few days ago is now down to 200-300 pips so at the moment its going in my direction. 40 take profit and 0 stop loss, not conventional but working for me. I have one loss in over 100 trades and the last 74 have been free of loss. My aim is to get 100 trades without loss rather than a target each day or each week of pips. I simply trade as I see it, no plans of entry or exit, (other than take profit anything over 10 pips). I would urge you to find the T-Line by steve bigalow on you tube and watch the video. You may not be able to trade the gbp pairs in view of the time difference but if you can I hope you find them as profitable as I do.
Good luck to the HIVE!

 
cuttoheal

For addicted traders only:

I am currently reading "The Psychology of Trading", subtitled: Tools and Techniques for the Markets, authored by Brett N. Steenbarger, PhD. Steenbarger's book leads you through his professional evolution as a psych counselor for busy, successful health professionals. As he himself starts to encounter the common growing pains of a new self-taught online trader, his patient base expands to include money-making traders who have lost their edge for unknown reasons. Both groups are seen as developing similar problem patterns which Steenbarger relates to his personal growth as a developing stocks and futures trader. The fascinating and entertaining methods of "treatment" he derives empirically from this clinical practice along the way, lead him to coin the term "trading from the couch".
The book's tone is conversational, yet, contains pertinent and brief journal sites which serve to draw the reader into the process of discovering how the (his) mind works. The emphasis is always, "how can these insights be used to improve trading results?" Clinical case studies appear on every page.

Personally, I was amazed at how often I found myself thinking, "This guy is reading my mind.", as Steenbarger described common detrimental behavior patterns, how to recognize them in your trading, and how to eliminate them.

The book was published in 2003 by Wiley & Sons. I found a used copy on Amazon for $10. By the time you read about The Woolworth Man, the The World's Most Powerful Glasses, and Phil the Addicted Trader, the book will have paid for itself in better trading results.

Just sayin'.

Good luck with your trading!

Tom

 
Rookie

Tom thanks for the informative post. Would you like to share a few of the ideas that have helped you and found most useful in your trading?

 
KohlentAnne

I manage my Fear,
I am better , I was sad to know that Marc Douglas is not alive.
I appreciate his video.
Anne

 
bborisovamil

Very usefull.
Thanks for sharing.

 
Rookie

Trader and Pyychologist Rande Howell
https://www.mytradersstateofmind.com/

Is a pretty good site with lots of free information for mindfull trading.

Mindful.JPG
 
El Martillo

I have read through most of Rande Howell's free offerings, and I am intrigued. Has anybody purchased or seen any reviews of his not-free stuff?

 
Rookie

Other than his book which I have not opened yet, not me.
BTW its only 5 bucks for the S&H the book is free.
I have started researching bio feedback tools.

 
Rookie

I made a statement the other day about my ego and it has struck a cord of misconception with me.

So I looked it up;

Id, Ego, and Superego Saul McLeod updated 2016
https://www.simplypsychology.org/psyche.html
: Perhaps Freud's single most enduring and important idea was that the human psyche (personality) has more than one aspect. Freud's personality theory (1923) saw the psyche structured into three parts (i.e., tripartite), the id, ego and superego, all developing at different stages in our lives. These are systems, not parts of the brain, or in any way physical."

AS many of us have figured out and if not you will, that trading is 90% psychological.
This has great bearing on our decision-making process and as it relates to this field of endeavor.
What is our process on teh one side we have intuitive on the other side we have analytical?
We are continually exhorted to be "In The Zone" a state of being at one with the market. A state of being.

As Freud is described in the article above and traders zone lies squarely in the EGO removing the ID and the superego from the equation and leaving only a perfect ego or in the Zen world a much higher estate.

It has been realized to me and my now almost two years that this is the single most important in learning to trade well with consistently profitable cash management.

ID, EGO, SUPEREGO.JPG
 
Rookie

This is a short podcast of 25 minutes from and about trend trading.
The bottom line, its a choice, what's the alternative.

Stoping losers and letting winners run. When I first came on board with Apiary knowing absolutely zip, while becoming dangerous I wanted the tops and bottoms like David Tudor, and where is a guy named Toddster teaching every day in the breakfast club about various MA's all very middle of the road stuff. forget about the tops and bottom just catch the 70 or 80 percent in the middle. Noe I developing a Long-term strategy of continuation or reversion I understand the logic of this give up the bottom and let go the top until the PA turns tail.

So here is 15 minutes that hit the nail on the psychological head.
http://hwcdn.libsyn.com/p/5/5/d/55dc0c99ddef0b4e/704.mp3?c_id=24461876&c...

 
msarmiento8

Thanks for sharing.

 
Jean-Francois

Nice find Ed! thanks.

 
Rookie

Thx JF.

So this next question is directed at experienced traders that have been thru the mill over the years.

In the attached charts you can see the DXY heading south very strongly in the election aftermath.
I made a fill 1% gain could have been more but I had earlier open trades that killed me so I was thankful for the save and went to bed.
Now I look at this chart and resulting analysis and force my self to stay out. Knowing full well there is gold in them hills.

I am fighting my tendency to gamble and over trade, or is it fear of being successful or the wisdom of learning of learning consistency 1% is my daily target. Does the adage fit "make hay while the sun shines"?

Fighting greed.JPG
 
celeam

the mind must always stay in the game

 
bestofyouhowtochange

Trading Psychology

There is a solution...

a true knowledge....

That makes sense....

What is my source: Life experiences and a course in miracles.

Check out "A Course in Miracles". You can do a google search, the book is translated to over 200 languages,
and now you can also get the the book on audio in english.

This is definitely the best gift the world can ever give you, your closest and all mankind, now, today and forever.

Take Care
Raymond Cassius Sananda
Denmark

 
Ro -Trader

Thank you for sharing, I think I shared this link before somewhere, hope it helps https://www.tradingacademy.com/lessons/article/what-is-your-forex-tradin...

 
Rookie

I was watching a Shawn Fast Track from 11/9/17 where he discuss emotions in trading.
One of the topics he touched on was trader fear and this blog post.

How Apiary Fund Traders Learn to Cope with Fear.
http://blog.apiaryfund.com/how_apiary_fund_traders_learn_to_cope_with_fe...,
"It's no secret that trading can trigger fear or anxiety among traders. It doesn’t matter whether you’re a seasoned trader or if it’s your first rodeo, at some point, fear will grip you in the market. As an Apiary Fund Trader, how you respond to the provocation of fear and the choices you make are part of the development process you go through as a Trader."

Also included was this facebook podcast from Shawn.
https://www.facebook.com/apiaryfund/videos/1480655798687443/

Down to earth! enjoy.

 
John49

I've read Dr. Elders 'Come Into My Trading Room', great book and I will be spending the weekend with these links. Thanks

 
Jean-Francois

Hi Ed,

"make hay while the sun shines" - my sun now shines daily between 6am and 10am MST only, that's it otherwise i end up giving back, that used to be my over trading demon...

 
Rookie

JF, I'm just not to sharp about reading between the lines.
I know you're a great trader.

 
jlksys

There is great stuff in this post.

Today was my first day in Gold 1. It was not my ideal day and all related to psychology. I started to do really well in Silver II and III. During those levels i forced myself to slow down and sharpen my strategy. Once I did that i was able to complete without many issues and it felt great.

This morning, i put a lot of pressure on myself to perform, i was nervous and anxious and it just did not work. Most of the day, i felt like I was grinding out the trades. It was not fun and i don't like trading like that. I was able to seriously reduce the losses from my worst levels, But still ended down for the day.

The lesson i see in this, is relax and trade what you know, today is no different than any other day and silver, gold, funded or your own money are all the same. Just trading.

Can’t wait to start again next week.

 
Rookie

@jlksys, one of the hardest things for a trader to do is just kick back, for me especially when things could be going better. Fear of loss is a very powerful sub conscience root instilled since birth. It is a major contributor to gambling. When I feel uneasy or uncomfortable its time to just chill and if necessary sort something personal out. There is always another trade.

 
jlksys

Rookie,

thank you.

 
sunshine564

I am looking forward to reading all of this material. Thanks.

 
Jean-Francois

Remembering this helps a lot along the way...

21032721_716712451846070_2055510519558326145_n.jpg
 
Rookie

Thanks, JF, it is interesting that I just came here to post on this subject and here is your chat! Thank.

Daniel Crosby is a psychologist author of trading Biases. That has a way of putting thing succinctly into common words.
In his latest book and Trend Following podcast linked at the list bottom.
Identified from about 200 biases and distilled down to these four, (paraphrased)
1.EGO, The Keystone Paradox.
2. Emotions, how do you react?
3. Attention, getting sidetracked by noise
4. Conservatism, all about maintaining and thus fear to cause inactivity.

The Behavioral Investor Hardcover – October 16, 2018
by Daniel Crosby (Author)
https://www.amazon.com/Behavioral-Investor-Daniel-Crosby/dp/0857196863

Informed Choice Podcast
ICR127: Daniel Crosby, The Laws of Wealth, 25min, https://www.youtube.com/watch?v=Vo_5eg_DLrY
The Laws of Wealth:

The Laws of Wealth: Psychology and the Secret of Investing Success, 1hr
https://www.youtube.com/watch?v=QCZec930m7g

Trend Following Podcast
Ep. 716: Daniel Crosby (The Behavioral Investor).
http://hwcdn.libsyn.com/p/4/6/1/461b02e4570ff41f/716.mp3?c_id=27492692&c...
Crosby identifies four key psychological elements of a trader at the 20-minute mark.

 
Jean-Francois

@Rookie - thanks for the wealth of info - this will keep me busy for a bit, I heard of Dr. Crosby but never took time to listen - now i am.

33993989_10211346422206197_1837390758735249408_n.jpg
 
Rookie

YW, I also sent this to Curtis because he requested us to email a psych structure for improvement of our trading, I think these four areas, emphasize these areas.

 
Rookie

This is the most counterintuitive statement ever made because it goes against everything we are taught from birth.
Mr. Tudor Jones said I get paid to sit on my hands.

Power Of Do Nothing.JPG
 
burton

Jean-Francois, great image reference, for the emotional spiral. thank you for sharing.

 
9JaKrypto

Jean-Francois ,the youtube videos helped . thanks

 
Jean-Francois

@9JaKrypto - - Mark Douglas is awesome indeed amongst a myriad of others

Keep_calm_and_trade.jpg
 
carlos.cowie1

Thanks, Jean for the tips on the Trading Psychology. I will remember to keep calm and trade. Mark Douglas has some great tips

 
KohlentAnne

Funded because a shock sentence made change my psychology.

For European people, we used to trade the London market. In fact, during the beeline, I discovered a few devices like NZD, AUD.
In the beeline, I discover trading like I never imagine.
So keep in mind, that I was funded because I stopped to make too much risk. I just understood that the beeline is to show me all the possibilities,

In Gold II, I wanted to earn money without money management. I did not work.

One day, Rex told something very sad: " I can t do anything for anyone who did not understand money management. This guy is not able to be a trader." The sentence was a shock, in the best sense of the word
That's for me a shock therapy.
Khloe

 
proofenuf

I I realized that doing nothing, after the trade was placed, was the best way to make money. My problem was over analysis which lead to fear and early termination of too many trades. A second lesson was keeping my hand off of the mouse once the trade was placed.. That too helped deal with both fear and greed, the two driving forces of the market.

 
burton

"My problem was over analysis which lead to fear and early termination of too many trades." ...something to consider, it came to me as i read your comment...

- rather than "over analysis" being the source of fear, what if, the source of over analysis is "fear of loss", and maybe even, a "lack of clarity".

lack of clarity is so easily over looked, and it's quite common, as it stems from not having a simple, clear, and concise trading process.

- i know this was true for me

i share this, because, when a trader has a clear understanding of the cause, the next step to take is often quite easy.

as an example, take a trader that is prone to over analysis...

- is it the "over analysis" that must be stopped, or is "over analysis" the symptom?

i have found that the things, we as people, and traders, struggle with, are often the symptom, not the cause.

- a clear indication of cause versus symptom, symptom keeps presenting, no matter what steps are taken, even with great effort, and angst, the symptom will persist.

- when the cause is identified, it takes little effort to address, and the symptom magically disappears.

 
Rookie

ugh Burton, " symptom magically disappears." I must have missed the magic part.:))

 
bvelder15

Very helpful Jean. I was aware of some of their writings, but not of their youtube availability. This should be a big help going forward. Thank you

 
Pips for Profit

Yes....I too have noticed the constant desire to "learn more" and "learn it better". To a degree....this is good at first. After all it drives us to learn great strategies... how to trade, and overcome emotion. But....after a certain point....you MUST pull the trigger!!! After all, the platform has demo accounts for a reason!! To PRACTICE!! After all, what good is knowing how to trade if you continue putting off the practice of it. It's in live conditions, that you will begin to learn the application of what you have learned!! Actually, my trading really did not really improve that much until I moved forward......This is a must if you want to overcome the emotional challenges we all face as new traders. So let's all get out there.....and trade.......and trade.........and trade.......until we learn to become a profitable and consistent trader!! Happy trading.

 
sunshine564

I have a friend who is binge watching Mark Douglas. I will get into these videos to see what he has to say. Thanks for the heads up.

 
Rookie

https://www.beyondseattime.com/the-psychology-of-losing/

A very good layman psyco0logy of the chemical why we may be looser. Makes me feel bi-polar. Who knows maybe I am...:))

"The unbending truth is that a race has exactly one winner. Every other competitor loses, and depending on their expectations, each of them has to deal with varying degrees of the emotions that come with losing. A single loss can be hard enough to deal with, let alone a string of losses that shake our very ability to perform. No matter what the sport, every competitor hates losing, and for good reason! Besides the blow to the ego, losing actually hurts; not in an abstract way, but in a very real manner! It makes your stomach churn, changes your blood pressure, constricts thousands of muscles, impairs decision making, elevates stress, reduces testosterone, causes dopamine deprival, and much more. It’s real, we’ve all felt it, and it’s no fun. Your body wants to feel better. Your mind wants to prove its worth. Your ego wants to regain its self-image. These are real and measurable physiological and psychological effects. Losing, quite literally, feels really bad.

Fun fact: Winning not only feels better; it seems, winners also live longer! Academy Award-winners live, on average, four years longer than other actors.

Of course, it isn’t exciting or sexy to talk about losing. But the fact that only one driver wins a race and everyone else loses means that we would be well served to not just understand what losing does to our psychology, but also explore how to cultivate a more effective approach and way of thinking so we can make the best of the situation when we fail to win.

About second place
The fact that there is often such a fine line between winning and losing has an interesting effect how we feel about second place. There is a classic study that looked at athletes in the Olympics, where they looked to see how happy athletes were when they won. They presented photographs, and had unbiased people coding what the facial expression were. They were stunned at what they discovered. “You’ll see the common pattern: The gold medalist is very happy, the bronze medalist is very happy, and the silver medalist often had this sort of blank expression on his or her face – sort of staring out into the distance.”

Anecdotally, we are all aware of this. The closer we are to winning, without actually winning, the worse we feel.

What happens when we lose
When we fail to win, the natural response is to rationalize the loss. We make legitimate sounding excuses, most often in the form of blaming our vehicle or the condition of our tires. When we repeatedly fail to win, we lose confidence, and fall into thinking that we just can’t do it because the winner must be more talented. By blaming our equipment or our relative lack of talent, we successfully cushion the blow to our egos by making ourselves believe that we are doing the best we can with what we’ve got. But in doing so, we rob ourselves of the learning opportunity presented to us.

Whether we are talking about driving, day trading, or playing poker, the immediate emotionally-driven response to losing often involves engaging in risky behavior (over-driving, over-trading), trying to “make up” for a mistake, or on the flip side, getting overly cautious and terrified of making a mistake. At its most extreme, losing makes some people quit altogether. We need to learn to use losing as a relentless learning opportunity; to figure out what we do poorly, and fix it!

The “Winner Effect”
In his book, “The Winner Effect,” Ian Robertson argues that the reason it’s so much fun to win is largely chemical. “Winning increases testosterone, which in turn increases the chemical messenger dopamine, and that dopamine hits the reward network in the brain, which makes us feel better.” The “winner effect” is a term used in biology to describe how an animal that has won a few fights against weak opponents is much more likely to win later bouts against stronger contenders. As Ian Robertson reveals, this applies to humans as well.

So what does this mean for driving? While it is true that there is only one real winner from the perspective of the eventual race results, we can utilize our own fluid definition of winning and losing, as a means to manage our psychology, mindset, and expectations. It is important that we define what a “win” is ahead of time and measure our performance against that target, and not invent the definition after the fact as a way to coddle ourselves. In other words, it must be a goal we strive for, not a rationalization used to make ourselves feel better.

For example, it would be foolhardy for a novice to expect to win a race their first time out, but being “the fastest novice”, or “within XXX seconds of the winner” may be reasonable goals to set and strive for. This can be a very powerful mental approach, because as Robertson asserts, when we win fights against lesser opponents, we are more likely to win future fights against greater challengers. Of course, with each victory, the key is to keep advancing our definition of winning further towards real winning, and not languish in the comfort of easier “wins”. Such a mental approach can be very useful, particularly if we use it in conjunction with a concrete improvement plan where we set goals that are far enough to be challenges, but close enough to be achievable through concerted effort.

Managing expectations
We touched on “expectations” above, and it is worth taking a moment to be introspective about this. I believe it is absolutely vital to know your expectations intimately (this is true for life, not just racing). I don’t know the secret to happiness, but I DO know the secret to unhappiness. It is unfulfilled expectations.

We expect our lives to change and get great when we graduate from college, and then it doesn’t. We’re left unhappy. Why? No reason, everything is fine. We aren’t being shipped off to a prison camp, we have food, friends, and activities. But our reality didn’t meet our expectations. It also happens for many people after marriage. They expected this married fantasy bliss, and when it’s not there after about the first month, they get unhappy. Why? They’re married! They have an amazing significant other, maybe a new house, etc. Nothing is REALLY wrong, but they have unfulfilled (and perhaps unsaid) expectations, so they are unhappy.

Expectations and effort must be in balance.

What are your expectations with regards to racing? Are they realistic? Do you expect to always win? Or perhaps to always lose? Do you expect to be winning nationals championships immediately? Do you expect you will never be fast? If your expectations are beyond what you can currently achieve, unless you have a well defined improvement plan, your pain response will kick in and make you feel miserable. On the flip side, not everyone is playing to win! There are plenty of drivers who set lower targets, that they can consistently achieve, and they are happy staying at that level. Whether you are trying to extract every last thousandth in the pursuit of national championships, or are just having fun playing around in a smaller pond, you have to know and manage your expectations.

Winning is not in your control
If there’s one thing to take away from this post, this is it: Not even the greatest driver in the world can control whether he or she wins. Performing our best is the only thing that is in our control. Therefore, if we do not win, either we did not perform to our potential, or we need to increase our potential. Whether we are chasing a target we defined for ourselves or chasing a true victory, failing to achieve our goal is the most direct feedback we can possibly receive. Don’t treat losing as reason to doubt yourself; rather, treat it is nothing more than a very clear indicator that you have things to work on.

Be fastidious in determining what needs improvement; break down the problem, identify the root cause, come up with a plan to address the problem, and execute on that plan. We have previously talked about how to identify and fix execution errors, game plan errors, as well as how to use video analysis to really dissect our driving. Use those techniques (or come up with your own) to get to the bottom of whatever of holding back your performance and learn from your losses.

Losing isn’t a final judgment unless you make it one.
You can choose to let it break you, or use it to level up."

 
Rookie

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3055419/

This is a pretty heavy article about an anxiety disorder of failure.
My opinion as expressed to a friend is that we all do what we do because of fear. It is prime and innate in our nature to survive and to survive, we must be sinners.
Mom said you can do/be anything you want to be, naturally I believed her and I still do. But mom didn't say what the cost was..:))
If or when we understand that the cost is in our minds we can accomplish whatever we can imagine.

It is my contention that from fear of failure comes anxiety disorders that plague many of today's social issues. Including our opportunities to trade consistently profitable.

Ok, I'll get off my soapbox for today. Happy and successful trading to all.

 
Rookie

Ok I lied, I have punctuation.
https://perceptiveinsights.com/wp/forgiveness-is-key-to-opening-the-door...
While revenge feels good: to endorphins:)
Forgiveness Is Key To Opening the Door To Success
How do I reach a state of forgiveness?

 
gusborstad

Thank you for sharing a thoughtful post.

 
Rookie

your welcome!

 
Rookie

I ran across the series of short interviews today on TVC.

https://www.tradingview.com/shows/real-vision-the-edge/investing-master-...

This series is by Peter Brandt.
Investing principles of trading.

Gregg in part 2 of this series Peter makes a statement which I think you will very much emphasize with.
As soon as he said I chuckled and thought of you.
------------------------------

Losing Money Without Losing Your Edge (w/ Peter Brandt) | Mental Game of Trading | Real Vision™
https://www.youtube.com/watch?v=ZMQX3l7OYYo
-------------------------------
Chat with traders, Peter Brandt
https://www.youtube.com/watch?v=4nKbbPttCa4

 
debug

thanks!

 
Rookie

Hard Lesson,
why did I post this in the psych forum?
in the attached, you can note many winners of 5-10 pips each.
you can also note 7 losers with 50 pip stop losses.
So I knew that PA was going to retrace mostly because the momentum was gone and consolidation started.
My arrogance sets in having just made 150 pip, with three shorts on I load up, Mr. Invicable...
Somehow the little man inside the provers server knows when you're overextended, every single time and you will get stung or worse yet Stopped by the 5% god.
The cruel irony,
In this case, observe the wick on the down candle and that's all she wrote.
Then in the next breath, PA did exactly what I was thinking and a 1/2 dozen trades later my last set of trades would have been closed and another 1/2 dozen the 1st set would have been closed.

So why in psych because I know to close the losers and let the winners run, did I do this? not.

Had I closed them what would have been the worst case? Instead of earning 150 pips it would have less maybe 50 pips. Instead, because my head said I know better than the PA you have produced a substantial loss.

Hard Lesson.PNG
 
IvarC

Thank you for sharing this material!

 
Rookie

Listened to this person today Denise Shull, from trend traders;
this lady has her head screwed on straight.
http://hwcdn.libsyn.com/p/2/9/e/29e8b42937c2006f/555.mp3?c_id=15278612&c...
----------
here is her website, https://therethinkgroup.net/about-us/our-people/denise-shull/

advertisement intro. good podcast.
http://podcast.scienceofsuccess.co/e/the-mental-tools-olympians-traders-...
another audio at the bottom of the first page.
Denise Shull is a decision coach, performance architect, and founder of the Re-Think Group. She utilizes psychological science to solve the issues of mental mistakes, confidence crises, and slumps in Olympic Athletes and Wall Street Traders. Her Book Market Mind Games has been described as “The Best of Its Genre” and “The Rosetta Stone of Trading Psychology”. She has been featured in The Wall Street Journal, CNBC, The New York Times, and consulted on the SHOWTIME Drama series Billions as one of the inspirations for Maggie Siff’s character - Wendy Rhodes.
--------------------------------------

So because of "Repetition Compulsion" which I am plagued with and I think many of us traders that survive the first years are afflicted with to one degree or another is the WHY of what we are doing and to change that view to change. And become consistently p[rofitable traders and should I say wildly profitable.

 
fxnews4tim

awesome videos!

 
trad9350

Thank You everybody this is a very good forum !!

 
Larna

This thread had a lot of great information. I appreciate all who have contributed.

 
Jean-Francois

I'm glad you have found value in this thread, I too appreciate all those who contributed to its content. Psychology is where the answers lay i'm 100% sure.

 
Rookie

n1jrm posted a series of videos in the easy scalping thread,
This cast is a very good psych trading vids I have seen.
The Biggest Reason Most Forex Strategies Fail (And What To Do About It)

https://www.youtube.com/watch?v=qYDTh--GOyI

You need to watch this, especially if your a newbee or rookie!

Pain causes.PNG
 
Jason Mertz

I agree JF.

Rookie...I can't remember where you posted the link, but that video you posted of Shawn talking about really wanting to make money trading in front of that group of people in Utah, but losing....that was a great video. thank you for that!

 
Rookie

Jason Hope this helps and the one you're referring to.

https://www.youtube.com/channel/UC5fT_naBgiD9MQE7C--wL3g/videos

the BAd Day
https://www.youtube.com/watch?v=jdw8M6iiAO8

The fix!

When You Have a Bad Day" with Shawn Lucas
https://www.youtube.com/watch?v=5U8VuB01z_k

 
FrankS

Process focused trading explains why I often trade better from a bad position as opposed when the market appears to be logical. and even somewhat predictable. I have traded emotionally in the past and still tempted every day. However, I now understand the difference and why the process enables me to control those emotions. And I can honestly state the stats have been better ever since.

Moreover, I agree with Shawn for the necessity to put yourself on a time-out for the purpose of reassessing.

 
caflischmartin

How Do You Deal With Trading Losses? (Coaching Session Highlights)
2ndskiesforex.com

https://youtu.be/4zGjNhU_4LQChris Capre talks about trading mindset as a whole process,not only about loosing(the question was related to loosing,the answer was quit a larger approach to the whole process).

If we trade to get exited,we should play in a casino game not using real money.
Trading consistenly and profitable is as exiting as crossing the road at a red light.
You wait when its red because its red,no matter if there are any cars on the road or whatever.
You go when its green,maybe still being cautious,depending of the country you are in.

Exitement is trying to cross the road when its red !The risk is high you get hurt.
You will loose your money when you try to trade a profit when the requirements to get a profit is not there.

 
Thomas

Thank you for this thread.
Lots of great stuff.

 
asenatihosea7880

thank you for sharing all this!

 
Rookie

In reading Bill Williams, Chaos Theory, in one of the last sections, it is focused on "In The Zone" with several athletic examples.
The following one is meant to point out our duality of thought.

A CLOSER LOOK AT GETTING INTO PROCESS:
WHY WORDS ARE IMPORTANT
Being in the process means paying attention to what is happening now, not what happened a
minute ago or what might happen in the next five minutes. As Ram Dass puts it so well,
"BEHERENOW." Often, when doing workshops for traders around the world, we start off by
displaying the following on a slide or writing on a board:
Opportunity isnowhere
Then we ask the traders to write down that phrase correctly. Over 95 percent write:
OPPORTUNITY IS NO WHERE
Only 5 percent (and often less) write:
OPPORTUNITY IS NOW HERE
The indication is clear. With 95 percent of us, Joe Gremlin is in charge. No matter which way
you read the sign, you have ~Iready made a judgment about the future. The first way
(OPPORTUNITY IS NO WHERE) is exclusive. The second way (OPPORTUNITY IS NOW
HERE) is inclusive. If we read the sign the first way, we have already made a judgment about
the future. It comes straight from Joe Gremlin, our Critical Adviser. It also puts us
automatically into the future and prejudges the future as being a rotten, no-reward land. We
have just doubled the odds against our ever winning.

yep, I got it wrong! how did you do?

 
Rookie

I was fortunate to have this privilege, it was a different time!
https://www.youtube.com/watch?v=o2-RXqU4Lg8
Coney Island Cyclone Roller Coaster POV Front Seat New York City

I never really wondered a great deal what makes me tic until I became a trader and asked my self why do I keep making the same mistake over and over again. JF bless his heart started this thread about psychology and it has blessed me immensely. Why because I think I have finally learned to say no. That's it just no.

I am an adrenaline junky, I love serotonin, then a wonderful trader introduced me to the hypothalamus and the research started in earnest. Today I had my biggest equity gain ever, it happened in just a few minutes, and I got out. Just stopped. Why?
Well, I have a history of over trading but more than that my brain likes the rush! However, my brain doesn't like the pain associated with my losses. My friendly good friend trader said when you get tired of the pain you will change. Ha, that was six months ago, but tight on.
I stopped today for a few reasons,
1. Not wanting to over trade
2 Fear of losing my windfall
next came to the problem WoW no whipsaw, price action has stabilized. Look PA is still moving in my direction.
3. Problem is I want to get back in, FOMO fear of missing out.... you know like when you were small and didn't want to go to bad when mom and dad said go...
So with some regret, I stayed out and watched about another 100 pips go by.

So what has it helped the most to enable me to make this change to my trading psyche? I'm certain many folks contributed to this new maturity and not just getting older and wiser because the wiring is not such an easy thing to rewire.
Was it my great trader fried that thinks a large stop loss is one or two pips... was it out great and very knowledgable instructors and a few super traders that all say the same thing, cut your losses early. Was it two years of pain from losses? I'm sure it all has had its effect on my brain.

Shawn's podcast of what to do when you have had a bad day and its predecessor of having that bad day https://www.youtube.com/watch?v=5U8VuB01z_k&t=1008s, as the saying goes When you fall off the horse what do you do?
Also recently I watched this guy Oliver Velex, whee his instruction for a stop was one candle below the candle you entered into the trade from. Then in a Mr, Curtis class, we pinioned my problem precisely to my large stop loss. Trading the next day and down 100 pips I have finally had enough. changed my stop but started closing losers at 5 pips. In an hour now I have reversed my losses and. Positive reinforcement!

I have 2-3 very positive days per week but my 1-2 loser days can be way out of alignment. IE make 400 pips and lose 800 or more. Nope can not get ahead that way and the pain is excruciating. So I finally changed. Am I out of the woods yet, not by a long shot but I can see the light.

Attached. my pips this week from Alveo, while I am not happy for the negative monthly it is better than last month, but it is the curved upswing that I am blessed with.

I should probably have written this in the Toss in the Towel thread but chose trading psychology because of thats the bottom line.

https://www.youtube.com/watch?v=mgCorbJC1Wc

12-6 Pips this week.PNG
 
Jean-Francois

Rookie, you rock !

I too at times experience the same roller coaster weekly performance, but I typically know why that is and can then adjust my size accordingly. Sizing (= GREED) has proven to be both my worst enemy and my savior when i use it properly. I guess you can equate that to leverage.
To keep coming back is another big key to our success, that also requires us to be separate and remove ourselves from the value of money. Therefore we trade for a standard unit of measure, in our case it's points or pips. Making trading more of a probability or mathematical type problem, hence taking the high probability trades only ensures we can keep coming back while increasing our overall equity value.
I noticed that the higher probability trades where accompanied by a stop usually found just outside of the Historical Volatility (HV) for example on the eur i use a stop of 13-14 pips for most trades. or 32 like Shawn if I wobble (even wobbling in my way). I also noticed that his 32 pip stop tends to capture most swings on the eur as well.
I too have wanted to throw in the towel a few times BUT having committed so much time already i find myself compelled to get to the bottom of this rabbit hole, I (we) have tasted blood already, we know what we are after even if we can't quite verbalise it yet.
Consistency is the last key we need to focus on. Stop changing how we do things, follow our rules and do the same things over and over. that's what Shawn does and that's what we must do ourselves. We know how to trade... the problem is we simply let our emotions do the trading.
Lets Keep up the hard work, size down and let our trade plans manage the trades while we stay out of it.
See you all in the hive.

 
Norma Jenner

Rookie you wrote, in part..."the wiring is not such an easy thing to rewire."

It struck me because our 2001 SUV has the expected problems of age, but the problems that seem to have the biggest cost for tiny little deficiencies are electrical problems, because it is so time-consuming, costly, to expose the errant wiring. Fixable vs dead. Rex's class on Trade Plan Development last week had a wonderful checklist for diagnosing bad wiring:

https://apiaryfund.com/calendar/2019-12?event=56731&d=4#calendar-event

Rewiring a car is easier than re-wiring a trader, but I can't expect myself, the trader, to be any fun to drive with if I don't rip out the old wiring and put in new wiring

 
Rookie

Schwager sums up key lessons of Market Wizards series,
https://www.youtube.com/watch?v=q29bNiYTFwA

Anyone can join this free series https://www.youtube.com/OpalesqueTV

Thanks, JF, and thanks for the advice.
Sometimes I feel like Tommy in the rock opera.
https://www.youtube.com/watch?v=MKdusyjiuvY&list=PLBDDC70B0CEC14AF1
but for sure we keep on learning cash AKA risk management.

Thanks again for the kind words and great post.
--------------------------------------

Norma, thank you, I will certainly watch it again, I must have fallen off someplace.
Perhaps age has a little to do with it but I think it's more engraved in the engrams thus it requires a new synopsis path to do the rewiring. A checklist for a trade would go a long way to aiding that process

 
Rookie

Thanks again Norma for that poke.\
Discussion Topic:
Trade Plan Development
Date: Monday, December 2, 2019, 7:00 pm America/Chicago change timezone
Instructor: Rex Johnson
https://apiaryfund.com/training/discussion/trade-plan-development-41, (and click on the little paperclip.

this is a superclass and this session is one of the best if you are just getting a clue or having serious issues about how to understand and fix the problems. Oh it does come with some homework...:))

 
Rookie

Hello, Traders, you are the resident psychotherapist.

Several of my Ted Talks links have disappeared, so this may require some reading between the lines.

On the weekends and most often Sunday morning, I watch a different food for thought from Ted Talks. Today it was on emotional agility. Why not my life is not the best example of psychological well being; my trading certainly is not the best example of trading. My equity curve looks like a buzz saw, which shrinks in circumference with every rotation.

It will be three years on Jan 1st that I am here with Apiary Fund. A good friend of mine says, “you do not understand how far you are far ahead of the curve,” maybe so, but I am an aggressive achiever accustomed to failure at the end of the day and up to now have not let my expectations down.

As we learn from so many books, talks, and classes, trading is all about emotions, but as this instructor points out, it's really about emotions IE: (my link disappeared for this next thought) irrational behaving. Are the two synonymous? I think on the lower end of the educated emotional scale, they are not, but as the emotional intelligence is raised, the two issues grow closer.

The next question for the educator, are we teaching the right stuff to resolve this irrational behavior? If the proof is in the pudding, what do the statistics say after more than five years of Apiary Fund inspection? Not in dollars and cents of capitalism, but in the percentage of traders that become consistently successful and continually increasing in the funded levels?

If that answer is not a resounding yes, then what're the alternatives?
Again looking at Ted Talks, What was and is the most successful class at Harvard?
(no it wasn’t law or economics)
And in a 75 year long Harvard study of graduates verse Boston’s unfortunate what made people the happiest?
(no it wasn’t money, fame or power)

While Apiary is finally moving to an educational structure that several us have advocated long ago, the cost may keep many away from the real benefits of the more focused and specialized training.

Notwithstanding, none of that rhetoric answers the question, are we teaching the right stuff to an irrational group of want to be world-class traders? And that’s what we are asking for “consistency” of our emotional being.

Why do we make poor decision explains why our behavior is often irrational -- in highly predictable ways
https://www.ted.com/talks/david_asch_why_it_s_so_hard_to_make_healthy_de...

So what we are really talking about changing behavior. Well, the next argument might be, is that a corporate responsibility?
Frankly, I don’t think I need to answer that because modern business concepts already have. Like the old adage, a happy wife is a happy marriage.

Next, How do we change behavior for the better. The reply here is to reduce the friction and change the motivation.
https://www.ted.com/talks/dan_ariely_how_to_change_your_behavior_for_the...
BTW the coin is an awesome lesson.

So why are traders making the wrong decision? I think the answer can be found in the probability or our heuristics.
https://www.ted.com/talks/sara_garofalo_the_psychology_behind_irrational...

So what’s the answer to where I am going with this subject. While I may be a subject for a behavioral psychologist, I am certainly and by no means a behavioral psychologist. It is quite evident to me that the lessons from the above Ted Talks led to a reward that gets the proper response of behavior. And as the coin shows, it must be in sight and tangible.

Apiary Fund certainly supplies this carrot! We can get an increase every three months, more or less, depending on our consistency. I mean, where else can you get a raise every three months just for doing what’s expected of you? Well, that apparently is not enough for us to change the human behavior of making what we think is a rational decision. If a $250,000 pot of gold doesn’t help, what does?

Taking a lesson from modern game theory and the production of electronic games, its no surprise that rewards are a key to keeping the gamester playing and participating over the long haul. So what to do about changing the heuristic behavior. Provide yourself with a physical and tangible reward when you make the correct decision. Let's bring that down to the reality of trading and some of the issues we have previously discussed. Some examples might be Stop Loss and Fear of missing out or excessive trading or revenge trading or over leveraging and so on. Even in the face of knowing and understanding the probabilities of the next coin toss, why would we risk all to be “RIGHT” and effectually be “WRONG” and consistently be inconsistent.

So if you can’t do the math or the record-keeping or for whatever lazy reason (remember lazy is a now thing) procrastinate then go to the bank and get a stack of silver dollars and reward your self with a coin every time you don’t fall victim to whatever your bad unconquerable habit (vice) maybe. At the end of the week, get a bigger reward, perhaps a night out or a pizza and again something monthly. Well, I’m sure you get the picture.

Reward yourself first with a tangible positive reinforcement.
If you read through this and maybe even watched the Ted Talks, you should get a reward just for the time spent.

Enjoy and onward to consistently profitable trading!!

Apiary Fund is a great place to be and learn to trade and maybe the most intimate training of all, our irrational emotions.

 
oel.locke

Rookie, You blow me away. Positive emotions in our lives.
This entry goes in the curated collection of Great Forum Posts.

Thanks

 
Rookie

Thanks, Oel,

It's not just about positive emotion, it is about our decisions. Where they come from, why we make them and how to restructure them. We like to think we have emotional intelligence but in reality, most of us store a great deal of irrational emotional intelligence.
Thus how to fix us becomes the question of the day and most certainly for traders.
---------------------------------------------------
The short version is how we perceive the probability?
or put another way
Why we make bad decisions?
https://www.ted.com/talks/dan_gilbert_why_we_make_bad_decisions

enjoy!

 
Disciplined Profit

Rookie,

You have shared some invaluable information. This information will help anyone in their entire lives, not just the trading journey. Thank you, thank you. I have found so much useful and helpful information on these threads. I have never before encountered such a wonderful community at anytime in my life. I recently turned 57. I certainly did not think the internet would host such a community. Thanks again Rookie. This particular thread is right in my wheelhouse as far as needs go.

Good trading everyone.

This should be required watching for beeline.

 
Rookie

Disciplined Profit thank you for the awsome sentiment, you have the correct moniker for this thread and trading!

Happy Trading.

 
josefpfister

Rookie,

Excellent thoughtful posting on psychology of winning and losing in whatever activity one is pursuing. I particularly like the honesty with which you approach the subject and the clarity of thought surrounding it. Many thanks.

 
Rookie

Thanks, Josef, perhaps a most lucid moment.

 
estherkarina13

Wow wow thank you very much everyone, I feel fortunate to be part of this great community. Your contributions are invaluable.

 
Rookie

oh contrary, Katrina, we are fortunate to have you! as part of the community and contributing.

Enjoy!

 
Rookie

I simply love this thread that Jean started so much room for the intrapersonal thought process.
We as traders measure what we do in terms os PIPs equating in real life to dollars.
In our dogmatic society, it is certainly our rule of choice to judge. And therein lies a bigger problem, when not achieved in our own standards we are failures with its related consequences. One of these consequences we are all familiar with is the term "beating ourselves up" and thus its related consequences which in most cases cause and even greater displeasure.

In trading, Shawn has taught us a great truth with "The Process", if it's not working go back to the process. Then maybe our process is good but the execution is not so good or maybe the process is not so good any longer (if it ever was) and adjusts the process. We can only do this adjusting if we maintain adequate record-keeping to make a fix-it determination. But that's not what this post is about, it's about not beating our selves up so that we can move forward without any guilt. Just a very matter of factly, without much ado or emotion, develope the process.

A kinder, gentler philosophy of success
https://www.ted.com/talks/alain_de_botton_a_kinder_gentler_philosophy_of...

 
Rookie

This is a really great forum if I don't say so my self... as one of the contributors.
We have showcased many psychological issues that are reflected in our trading and our personal lives.
However, we have failed to provide a simple methodical method of improvement.
This doesn't mean complicated spreadsheets and tones of mathematics as forex masters suggest.
Just a simple set of identity, make a sunshine rule, measure, and review, rinse and repeat.
Consider this, making small changes consistently leads to compounded results.

Our resident hedger, Mr burton has said of me that I am an excellant book learner implying I am not so much on the action portion.
In a way, he is correct while I have read very little by my standards from my twenties to my seventies. What have I done with the learning? I'll take the fifth on that issue. I have read most of The burton's suggestion of "Thing Fast and Thinking Slow" a number one bestseller in its category but it did absolutely nothing for me. Why because it did not answer the basic question of how to fix it.

I am sure there are many very good books available on the self fix-it subject, and I have read a few however there is one that I think really hits the nail on the head. Atomic Habits: An Easy and Proven Way to Build Good Habits and Break Bad Ones by James Clear
aka Tina Change, Remarkable results.

This book is available in many formats from print to audio and free PDF downloads.

For those of us that may be having now or from time to time what is our identity? what is the habit that needs fixing? if you can identify it, can we suggest a solution, can we break the solution down into actionable and measurable sections? Then we can improve them.

 
Rookie

Fooled by Randomness by Nassim Nicholas Taleb
https://jamesclear.com/book-summaries/fooled-by-randomness

The Book in Three Sentences
Randomness, chance, and luck influence our lives and our work more than we realize. Because of hindsight bias and survivorship bias, in particular, we tend to forget the many who fail, remember the few who succeed, and then create reasons and patterns for their success even though it was largely random. Mild success can be explainable by skills and hard work, but wild success is usually attributable to variance and luck.

Fooled by Randomness summary
This is my book summary of Fooled by Randomness by Nassim Nicholas Taleb. My notes are informal and often contain quotes from the book as well as my own thoughts. This summary also includes key lessons and important passages from the book.

According to Taleb, the book's most popular chapter was Chapter 11, the one in which he compressed all the literature on the topic of miscalculating probability.
Important point: “it's more random than we think, not it is all random.” Chance favors preparedness, but it is not caused by preparedness (same for hard work, skills, etc.)
“This business of journalism is just about entertainment, particularly when it comes to radio and television.”
As much as we want to “keep it simple, stupid” … It is precisely the simplification of issues that are actually very complex, which can be dangerous.
“Things that happen with little help from luck are more resistant to randomness.”
“Mild success can be explainable by skills and labor. Wild success is attributable to variance.”
One common theory for why people pursue leadership is because of “social emotions” which cause others to be influenced by a person due to small, almost imperceptible physical signals like charisma, gestures, and gait.
This has also been shown via evolutionary psychology: when you perform well in life, you get all “puffed up” in the way you carry yourself, the bounce in your step, etc. From an evolution standpoint this is great because it becomes easier to spot the most successful / desirable mate.
The concept of alternative histories is particularly interesting. If you were to relive a set of events 1000 times, what would the range of outcomes be? If there is very little variance in your alternative histories (i.e. You chose to become a dentist and you will probably make more or less the same amount of money and live a similar lifestyle all 1000 times), then you are in a relatively non- random situation. Meanwhile, if there is a very wide range of normal results when considering 1,000 variations (entrepreneurs, traders, etc.), then it is a very random situation.
The quality of a choice cannot be judged just by the result. (I first learned this in baseball. Just because a pitch you call or play you call doesn't work out doesn't make it a poor choice. It could have been the right call, but bad luck. Or vice versa.)
“Certainty is something that is likely to take place across the highest number of different alternative histories. Uncertainty concerns events that should take place in the lowest number of them.”
You should think carefully about getting more insurance / shielding yourself from events that — although unlikely — could be catastrophic. You essentially want to insulate yourself from terrible random accidents.
We have a tendency to see risks against specific things as more likely than general risks (dying in a terrorist attack while traveling vs. dying on your next trip, even though the second includes the first). We seem to overvalue the things that trigger an emotional response and undervalue the things that aren't as emotional.
We are so mentally wired to overvalue the sensational stories that you can “realize informational gains by dispensing with the news.”
Fascinating famous Swiss study of the amnesia patient who couldn't remember doctor's name but did remember him pricking her hand with a pin.
“Every man believes that he is quite different.”
It's better to value old, distilled thoughts than “new thinking” because for an idea to last so long it must be good. That is, old ideas have had to stand the test of time. New ideas have not. Some new ideas will end up lasting, but most will not.
The ratio of undistilled information to distilled is rising. Let's call information that has never had to prove its truth more than once or twice, undistilled. And information that has been filtered through many years, counter arguments, and situations is distilled. You want more distilled information (concepts that stand the test of time and rigorous analysis) and less undistilled information (the news, reactionary opinions, and “cutting edge” research).
There is nothing wrong with losing. The problem is losing more than you plan to lose. You need clear rules that limit your downside. (“If any investment loses one million dollars then our firm sells immediately.”)
Much of what is randomness is timing. The best strategy for a given time period is often not the best strategy overall. In any given cycle, certain places will be dangerous, certain trading strategies will be fruitful, etc.
If you find yourself doing something extraordinarily well in a random situation, then keep doing what's working but limit your downside. There is nothing wrong with benefitting from randomness so long as you protect yourself from negative random events.
Randomness means there are some strategies that work well for any given cycle (an extreme fad diet), but these cycles are often short to medium term successes. More importantly, the strategies that work for a given cycle in the short term may not be the best for long run. They are sub optimal strategies winning over a randomly beneficial short term cycle. The same can said for setting huge goals, following a fad diet, chasing an extreme training protocol, and so on. Unsustainable and suboptimal for the long term. In this way, evolutionary traits that are undesirable can survive for a period of time in any given population. That is, suboptimal strategies and traits can seem desirable in the short run even though they will be resoundingly defeated in the long run.
Important point: you can never affirm a statement, merely confirm its rejection. There is a big difference between “this has never happened” and “this will ever happen.” You can say the first, but never truly confirm the second. It just takes one counter example to prove all previous observations wrong. We never know things for sure, only with varying degrees of certainty.
There are only two types of ideas. Those that have been proven wrong and those which have yet to be proved wrong. (Feynman said something similar.)
Strive to become a man of leisure who can afford to sit with ideas, think properly about them, and gradually provide something of value.
Science is speculation. This is important to remember. Scientists are simply creating well-formed and well-educated conjectures about the world. But they are still conjectures that can be proved incorrect by one random event.
It's a difficult standard to demand that you can actually implement ideas and not merely share them (there have been many brilliant philosophers and scientists who have had great ideas they didn't personally use), but is an idea really that great if you can stick to it? Obviously, everyone has different skills and circumstances, so maybe someone can use your idea even if you can't. But generally speaking, I think you should be able to live out the ideas you share.
Pascal: “the optimal strategy for humans is to believe in the existence of God. For, if God exists, then the believer will be rewarded. If God does not exist, the believer will have nothing to lose.”
My first thought: “yes, but what if you believe in the ‘wrong' God?” Should you play a numbers game and believe in the God most people believe in? Or, can we safely assume that of the infinite number of possible Gods humans could have designed it is unlikely that any of the ones we worship are actually the God? So, just believe that a higher power exists? Whew. Tough call here.
Social treadmill effect: you get rich, move to a better neighborhood, surround yourself with more successful people, and feel poor again.
“Remember that nobody accepts randomness in his own success, only his failure.”
Skewness and expectations: you can't just look at the odds of something happening, but also the payoff you receive if it works (and the cost of it failing). A bet on something very unlikely can be smart if the payoff is large and you have rules to limit the many small losses that are likely.
Minor stalemates in life can often be solved by choosing randomly. In many cases it doesn't really matter so long as you choose something and move forward.
We follow rules not because they are the best options, but because they make things fast and easy.
Humans are inherently flawed. The cognitive biases that we have are simply a result of how our brains work. Sometimes these biases help us rather than hurt us. But they are always a result of how we are built. That makes them particularly difficult to avoid.
We seem to focus too much on “local” changes, not global ones. That is, we care too much about the latest change rather than the overall trend.
“Wealth does not make people happy, but positive increases in wealth may.”
We do not think, but use heuristics to make decisions.
Emotions are “lubricants of reason.” We actually need to feel things to make decisions.
Emotions give us energy and they are actually critical to life in the day-to-day world. In other words, the goal here is not to become a robot who can analyze everything with perfect logic.
Even if you know about randomness and cognitive biases, you are still just as likely to fall victim to them.
How to overcome these biases? We need tricks. We are just animals and we need to re-structure our environment to control our emotions in a smart way.
“Most of us know pretty much how we should behave. It is the execution that is the problem, not the absence of knowledge.”
“I try to remind my group each week that we are all idiots and know nothing, but we have the good fortune of knowing it.”
Do not blame others for your failures. Even if they are at fault.
The only aspect of your life that fortune does not have control over is your behavior.
Repetitiveness is key for determining if you are seeing skill or randomness at play. Can't repeat it? Not skillful.
“We favor the visible, the embedded, the personal, the narrated, and the tangible. We scorn the abstract. Everything good — aesthetics, ethics — and wrong — fooled by randomness — with us seems to flow from it.”
Reading Suggestions
This is a list of authors, books, and concepts mentioned in Fooled by Randomness, which might be useful for future reading.

Montaigne's writing and critical approach to introspective thought.
Robert Schiller's 1991 paper on the probability and information (first mathematical proof of the low value of information).
Gary Stix science writing
The Selfish Gene by Richard Dawkins
Karl Popper's work
Read about the Jacovian Dilemma
Mean Genes book
Randomness by Deborah Bennett
C.P. Cavafy’s poetry

 
Rookie

What The Bleep Do We Know FULL MOVIE EXTENDED
https://www.youtube.com/watch?v=R6G3-Zc9mtM
What the Bleep Do We Know is a Groundbreaking drama-documentary that explores the modern science of quantum physics and the fundamental role it plays in our every day lives. In simple terms the movie shows how the science behaves connected to conscious and unconscious thought and how we can directly influence it to create the life we that we choose. Ironically, it is in essence, a movie about our lives lived as a movie for those who are prepared to believe and practice its fundamental principles.

 
Disciplined Profit

Rookie,
Just finished watching this video. At the end of it I realized how long it was. Seemed like 20 minutes. Right in my wheelhouse. Soooo glad you posted this. Thank you. I have tried to learn about string theory for a long time. Reading that material from an engineer's point of view was extremely overwhelming. Like reading a text book. Thanks again.

Good pips.

 
Rookie

DP your welcome, that's one of the mind-expanding reasons I attend Jeffs Class and group. I can never attain his level of technical competence but I can understand the inter-relationships of what he shares. So Thanks to Jeff that's where I got the referral.

 
Disciplined Profit

http://docshare02.docshare.tips/files/22887/228874368.pdf

Thanks again Rookie. After watching that video I looked up Joe Dispenza and after some digging I found his book from 2012 in pdf format for free. If you have not read this check it out. Goes along with the subject matter of the video.
Breaking the Habit of Being Yourself.
Good pips. Thought I should share this with the thread. I had an Aha moment today during my trading session. I feel like I might have turned a corner in this exciting journey. Thanks again.

I was reading Burton's hedging thread shortly after trading today and alot of what he has shared really resonated with me. Thanks to him also.

 
Rookie

DP thanks for the post and URL,

So I replied (expounded a bit)t on The way of the Burton, just a bit ago. It seems we must go down the rabbit hole only to come out the other end or get popped back out...