Hi there…
Does anyone know any really good book about the subject of
trading (forex) psychology?
I’d like to educate myself in this area first of all. So any advice or
recommendation will be welcome.
I really appreciate it. 
Mark Douglas “Trading in the zone”
Enjoy!
Search up Vic Noble’s “TOP 20 KILLER TRADER MISTAKES COURSE” you can download it for free somewhere. Trading in the zone can be summed up in two chapters and the rest will bore you to death.
[I]The Psychology of Trading[/I] by Brett Steenbarger is a good one.
everyone says this is a good book, or is it just hype?
It’s a must read if you are serious about trading. No hype just boring.
Ok thanks. Does it give any good strategies?
It does not give any strategies per say but it suggests that any strategy can be a good strategy, and far as an actual trading plan if that is what your referring too. What he repeats over and over again is basically “plan your trade, trade your plan”. Trading is 80% + mental game and 20% everything else, in my opinion. Buy a used one and if you don’t like just sell it again and its basically free. 
I’m agree with your opinion. They key to success not only in trading and but also in hole life is in our mind! Complicated part is to find it!
no, if ur strategy is statistically a bad one, then money management and mental strength doesn’t even come into play.
Yes. But many profitable strategies are consider to be bad because of bad mental management.
But the point is you shouldnt even waste your time thinking about psychology until you at least have a properly back and forward tested method. Ironically those traders who do develop their own methodology, and understand the results of their testing generally tend to have relatively few psychological issues anyway.
Advice such as "develop a winning attitude’ as suggested by Mark Douglas is simply ignorant nonsense.
Well, I would have to disagree… since we know our psychology is the most difficult challenge to conquer, we should always be working on that front (simultaneous with the strategy development part).
I read somewhere that trading is 80% psychological and 20% methodical. That sounds about right in my experience. You can have the best strategy in the world but fail miserably if you don’t have control of your psychology.
Likewise, my guess it that you can have a horrible method but still succeed if you are on-track in the other critical areas (namely money mgmt and psychology). Van Tharpe mentions that it’s possible to succeed with even a 30% success rate, assuming proper money mgmt (if I’m recalling correctly).
If you focus only on the method, you will be itching to jump into the market before you are ready, and that will surely cause pain.
When I first went to workout at the gym (years ago), I asked a trainer how I could reshape my body. I thought first I should get rid of this college beer belly, and then figure out how to lift weights. But he said: No, what you want to do is begin training with both weights and cardio. The cardio will attack the fat but at the same time your strength training will build lean muscle. As your body transforms, the lean muscle will accelerate the fat loss as well, until one day they are working in harmony.
Thinking about important aspects of trading is never a waste of time.
Testing and developing is an ongoing state of affairs, psychology in trading is also an ongoing state of affairs. You don’t suddenly wake up one day with everything solved just because you have a positive back test result.
I would like to know what is so nonsensical and ignorant about developing a winning attitude. Would you apply your wisdom to sports people for example?
I suggest you dismiss it in such terms because you have little idea of what one is.
You know, I think it is more about self-control and mental-control rather than “psychology”. It is even more about setting up a reasonable money management and following it. Ultimately, it has nothing to do with psychological things to learn. But yeah, if you don’t manage your money, you will go insane when losing money! Just my opinion.
No amount of money management or psychological strength will make a system with a negative expectancy a winner. Full stop. By way of example, roulette is a negative expectancy game. Over the long run there is no way you can come out ahead. No system you develop to manage your bets (money management) will change that. No matter how much discipline you have in sticking with your system, you won’t come out ahead. You may get lucky for a while, but if you keep playing you’ll end up with nothing.
This is why Brett Steenbarger, the guy who literally wrote the book [I]The Psychology of Trading[/I], doesn’t rate trader psychology any higher than having a positive expectancy system or employing good money management. All three are equally important.
Van Tharpe mentions that it’s possible to succeed with even a 30% success rate, assuming proper money mgmt (if I’m recalling correctly).
You’re missapplying Tharp here. His point about low success rate systems is that they can still have positive expectancy. He never suggests a negative expectancy system can be a winner.
When I first went to workout at the gym (years ago), I asked a trainer how I could reshape my body. I thought first I should get rid of this college beer belly, and then figure out how to lift weights. But he said: No, what you want to do is begin training with both weights and cardio. The cardio will attack the fat but at the same time your strength training will build lean muscle. As your body transforms, the lean muscle will accelerate the fat loss as well, until one day they are working in harmony.
This is hitting the nail on the head. You need to be working on all elements of your trading in unison because they all feed off each other.
The “psychology” part is in understanding the sources of your difficulties and recognizing the patterns you have in your behavior.
Right…
But I still think a good system and good money management would cure the mental torture. Without them, yeah, one has to be extremely strong minded to trade!
And I would argue that you should be factoring your psychology in to the process of working out a good system and money management plan as it’s often conflict between them that creates the breakdowns.
I dismiss it because its nonsense :rolleyes:
I think psychology is extrememly important in sports. In two athletes of equal ability, the one with the “wining attitude” will most likely do better. I’d even go as far as to say that people with less natural ability may surpass those with greater ability simply down to attitide. The same can be seen in many walks of life. In a previous career I’ve used NLP consultants to work with sales staff, and obtained fantastic results by doing so. I’ve advocated the use of coaches and mentors in many areas of business. I’d even go as far as to say a lot of the personal development technologies available have real merit in helping people achieve their goals and improve their lives.
The problem is, this isnt applicable to trading. Its about positive expectancy, you either have an edge, or you dont, and no amount of psychology or money management is ever going to change that.
I honestly dont care about the results of a trade, or if Im profitable or not over a period of a day or a week, a month or a quater. All that matters is that my returns are within pre defined parameters. I dont start the day believing I’m a winner, or trying to developing a positive mental attitude, in fact I realistically expect to lose money most days. The truth is that most equity curves that i’ve ever analsyed tend to make new highs less than 20% of the time and I’m no exception.
I’d probably go so far a to argue that a healthy dose of cynisism is probably a far better attribute to possess for a trader than a faith in ones own ability