And yet another in my ‘little series’:
IGNORING the ‘advertising’: it’s a pretty good article and it is written (once again) by Van Tharp so I figured it’s well worth a ‘mention’ here.
Regards,
Dale.
Hi Dale. 
Unusually, I had some free time tonight to read not only this article but all of them.
There’s alot of good stuff there. BUT… lol… I cannot agree with his stance on position sizing and NLP.
He cites the ‘Marble’ game as an example of position sizing. The traders who were over cautious made 5-10%, the traders who were all in ‘Sh*t or bust’ either blew up their accounts or won the game and possibly millionairs. What a crock!!! I would submit this is the difference between paper traders and real traders and I’m pretty sure he’s a theorist rather than a realist.
I’ve said this before on BP… so no harm saying it again. Slow and steady wins the race. I can’t stress this enough, its not the trade size that builds an account, its COMPOUNDING! Even at 0.1% bal trades you can average 2.5% a week growth. Run the compounding numbers… the lot size of 0.1% stays the same but my how the balance can grow!
NLP. Ok let me see if I have this down. Study a successful trader. Take note of what he/ she is feeling, visualising, etc before, during and after the event. Then model yourself on this and hey presto… your a successful trader! Most successful traders I know are emotionless whilst trading and visualising nothing other than perhaps a sharpish exit should the trade not pan out! 
Their entry is based on their strat, nothing else. What makes them successful over and above that is nothing more than an a detachment from the trade and knowing when to take a profit or bail out. I really don’t see how NLP is going to model that… but it might sell a few books or seminars!
Oh, my bots are very successful with their nlp stuff. Them are pure psycho freaks, lol.
My interpretation of NLP is simply negating emotions using this technique :- NLP introduction
Careful with those bots though, the can get really P’d off if they don’t get enough rest 
LOL!
Cubanpip, please try that:
Take a rather big rock, let it sit anywhere around your office and tell em every day in the morning that it must walk to the door and then if he will become the master of walking rocks, he will get a prize. You don’t need then any profits from trading anymore but can go with your rock to a circus and earn serious money with your walking rock. I am sure, even rocks are open to nlp, lol.
Frankly, I guess what they call nlp today they called it brainwashing a while ago, lol. If you would have no system with an edge, then sure there could be [U]consistent[/U] money made. Not just by you, but by the brainwasher of your favor.
Watch out!
Neuro-linguistic programming - Wikipedia, the free encyclopedia
Okay, so we agree on that, Cubanpip.
The only thing is that you can’t overthink. Most ppl underthink and look for magic crystal balls or psycho stuff or gurus or signals or star patterns or whatever. The more they lose, the more do they underthink, looking for the magic holy grail, lol.
Happy trading to you!
Of course you can overthink, believe me, I’ve been there.
So, how does that work: Overthinking? I mean, how can I imagine what overthinking is?
Are you sure you don’t mean anything else? Like “brick thinking”? Repeating patterns of the same but old thoughts? That is not thinking. That is your brain feeding with cycles of waste.
Thinking what I mean is to have a fresh mind, get some information, analyze it, make decisions on it and then use the outcome of that to cycle through the same process as long as you get what you want. You can go through that from time to time if you have a new idea. For example: I always try to optimize my bots. If I get a new idea, I check that out. Sometimes it shows this is big cr*p, sometimes the outcome is great. You can’t that know before you think about it and check it out.
If you don’t get what you want there is obviously then something wrong with this “thinking”. Either the goal is set too high or the plan to get it is wrong. But if you have realistic goals and think through it logically without emotions (that is what I understand as thinking) I can hardly imagine overthinking would be harmful.
I think you’re thinking about it too much :rolleyes:
Are you sure that is not overthinking, that you think what I think is overthinking?
I’ll get back to you when I’ve thought about it.
Hello,
Well I’m ‘thinking’ that all of this stuff is ‘over my head’ to be honest. However: I DO know to what purplepatchforex is referring to i.e. ‘overthinking’ because I do it EVERY HOUR OF EVERY DAY and I know it hampers my ‘thought’ process (how ironic).
An example:
Let’s say that you have trading systems or methodologies that you have PAPER TRADED and have PROVED to yourself are profitable over time. And yet: I STILL find it very difficult to ‘practice what I preach’ (because as everyone knows I’m the ‘numero uno proponent’ of technical or mechanical trading systems). So: you get a signal, take it, and it’s a bad trade but you’re required to stop and reverse. But NOW: instead of doing this you look at the chart and then at the other timeframes and then you remember hearing and reading that the general consensus is that Gold (just as an example) will go to $1 500 an ounce and …, and …, and … Instead of JUST DOING what you’re supposed to do you ‘overthink’. OR (another personal favorite): remembering that you’ve GOT good trading systems or methodologies (for the reasons noted above) but then you will sit and ‘think’ ‘what if I do it this way’ or ‘what if I do it that way’ or ‘what if I just change that parameter’. Again: this is ‘overthinking’. Or at least that’s what I take it to mean anyway. NLP the solution???
On a side note (and if anyone knows who I am talking about then please let me know because I don’t remember who it was but I do remember it was somebody very successful like a ‘Buffet’, a ‘Soros’, or a ‘Branson’ but I don’t think it was any of them):
Whoever this person was (I remember it from an interview that I saw but as I said I just cannot picture who this person was) said that the reason that they are so successful was because once they’ve made a decision to do something or to try something (and I’m talking about life in general here i.e. not trading specific) they action it regardless of the consequences. If things turn out well: obviously that’s great. But if not: they have the ability to simply ‘move on’ and not ‘dwell’ on the ‘why’ whatever it was did not work out and above all they are able to not feel any guilt or remorse and are simply able to ‘move on’ to the next idea. The obvious benefit of being able to ‘conduct yourself’ in this manner is that you don’t let previous failures stand in the way of future successes. I’ve noticed this myself: as one gets older it becomes increasingly hard to examine an issue, make a decision, and ‘stick to it’ no matter what the consequences. I believe that through conditioning this can be changed. It’s just a question of ‘how’ I guess.
(Geez: this is pretty ‘deep’ for my first post of the day)!!! LOL!!!
Regards,
Dale.
Yes, pretty deep, I’m knackered after reading that, might have to go back to bed!
But I read a great post a few weeks ago, and it basically said - some of the most profitable trades DON’T THINK, they put their experience to work, they recognize a few scenarios/patterns, they don’t think, they know from experience that they work out time and time again, not always obviously, but on the whole make great profits.
What’s more you can always overthink, since you have a time element, you can run out of time while you are thinking - hence you can obviously overthink.
Forex trading is not complex, it is random.
Thought this was quite relevant Email has turned us into ‘lab rats’ - Telegraph
So - be careful out there!
How do you think I MYSELF feel after having written all of that!!! LOL!!!
But yes: the problem with all of this ‘stuff’ is that it’s written about and discussed ‘ad infinitum’ (most of the books on the subject of this business have at LEAST one or two chapters dedicated to the ‘psychology’ of trading and I think there are ENTIRE books on the subject) but yet to get it ‘in’ i.e. ‘into your head’ is another thing altogether.
(By the way: I’m trying to find that thread where we were discussing position sizing i.e. I’ve found a ‘use’ for that formula).
Regards,
Dale.
Nah, I do not declare this as thinking. This is panicking.
If you have a reliable system, there is no guessing, no gut, no emotion, no nothing involved. You do have entry, exit and whatever rules down to time and all BEFORE you pull the trigger and if your trigger comes around you do not think but act. If you then start second guessing what to do, that is panicking. Panicking is anything but thinking or overthinking.
Hello,
Well then ‘panicking’ causes me to ‘overthink’ (or does ‘overthinking’ cause me to ‘panic’)??? LOL!!!
And that article: FABULOUS (ESPECIALLY the comments by other people which, in some cases, are more than just a LITTLE amusing)!!! LOL!!! And checking e-mail that often: that’s almost as bad as checking positions every five minutes and not being able to actually DO anything else!!! LOL!!!
Regards,
Dale.
Right then you two, can you answer me this on this trade I did here Stop Too Early
Did I panic?
Did I not think enough?
Did I think too much?
Did I underthink too little?
Or was it the kettle boiling?
Please help :rolleyes:
Hi Dale,
you would be the only man in the world who could panic and think the same time, lol.
There is panicking OR thinking but never panicking AND thinking, because panicking blocks the brain almost 100%.
Frankly I check my emails often and I am addicted to my open trades, if my bot opens some, lol.
But I don’t interfere with the decisions of my bots. Well, at the beginning I one time did, but it was a (not very dangerous) mistake. I closed the trades before the target with smaller profit. Then thereafter price went straight to the target. So, I let them trade now. They do better than I humble human. The thinking lies in the strat and the rules, not in the triggers or actions or trades.
Usually it goes this way with projects: Strategic thinking, then tactical decisions, then acting on it.
The point with nlp is that this is like brainwashing. May be you can trade then like a traders god but it might become difficult to do anything else where emotions are involved and part of the game. I am sure you can imagine what I mean, lol.
I’d say you concentrated too much with the phone and too less on the trade?
Concentration IS like thinking and if you can’t focus on trading, this is not overthinking.