Is It Possible To Learn About Trading Psychology?

It is right that you could learn your psychology with real trading because there is no trader who can learn without real money in forex. So, demo account is used for preparation in strategy of trading, MM in trading, but there is no psychology pressure in there. So, the only one way to learn about psychology in trading is using real account and you can use cent account for starting point in learning about it.

In forex it is important to control emotion but in reality it is always difficult . Knowing and understanding oneself is a good start and with time and experience emotional control can be accomplished.

Yes, it is not easy thing to control emotion in trading and it will need time and process to make it happen. There is no one who can control emotion directly in the first time of experience in trading. I think emotion control is psychological skill so it must be trained from doing a lot of practices but you can train it with trading in real account. So, you can use cent account to control emotion when equity is still low so it will be lower in pressure.

Emotions and trading fear are best treated with lot sizes so small that you don’t care if you loose.

When the amount on the table isn’t an object, you will pay more attention to your trading skills and get better by time.
The better and more confident in your trading, the easier it is to put bigger lot’s on the table because you better know what to expect :slight_smile:

If it is about possibility to learn about psychology in trading, it’s possible to learn about it but how to control psychology in real trading will need real implementation with real account. So, traders can learn and understand about how to control psychology in trading but it doesn’t guarantee traders capable to realize it. Traders should understand the risk in every decision they made, it can help traders to be responsible with their decision.

Totally agree with that. Size matters and you have to find a position size where you feel comfortable. Most of the time that’s a certain % of your trading capital so that you now that a loss doesn’t affect your trading career.

I’ve been trading for a decent time, after a career in the mutual fund industry. Switch to trading was huge mainly due to psychological adjustments. Another big factor is that you have to embrace uncertainty. Nobody knows what happens next, so adjust your mindset to that.

for me losing money is the strongest motivation and it make me think straight i dunno about you

More than learning i would like to say that certainly one can experience a lot with their trading experience which can help them mend their trading psychology such that making good gains becomes possible for the traders. Hence, we need to make sure that we are very much sure of our trading skills and mend the trading psychology accordingly for better trading results.

Very important thing - is to control your emotion, even when you lost your money. Theory is one thing and practice is another.

Yes, it’s not enough for traders to have knowledge only from learning but traders must have enough experience to be able make right decision in the right time so you can get good result in each transaction. More experience can give you better psychology control because with more experience, then you had more knowledge about market’s condition and how to handle it well. Learning about psychology in trading is important thing because the final decision is not depending on technical skill only but also psychology thing too.

I will agree and also say that we do not have to rush things up which actually means that there will be a time when things will become better for us :slight_smile:

You’re right. Traders shouldn’t be too hurry in making decision because if you’re patient then you could find out the right time for entry and exit point so your possibility of profit will be higher and the amount of profit can be maximized. Psychology control is important part in trading too because your psychology control will determine lot size to use in every transaction so it will determine amount of profit or loss which could be gained.

I think there are two parts to this pstchology stuff - the psychology of being in the market, which I think it is possible to experience without having a huge stake in the market. I sometimes just pull up asmall timescale chart and have a “pretend bet” - write it down, with the stops and everything noted and trade it - for me anyway, I can experience those emeotions as long as I don’t look away from the charts - keep watching the little dot move up and down for the whole period of the bet.

Success is to make a profit allowing say 2 pips for spread when you come out.

Failure is to make a loss. Try it :slight_smile:

This is pretty much the same for all of us and you can see it on the charts in those long rejection tails on the bars on high volume, just at the turning point.

The other aspect of trading psychology is our own individual psycholgy. I think it was Alexander Elder, but it could have been Van Tharp - or Even “buddy Swartz” (Pit Bull) who referred to “Sunspot moments” where you trade fine for a long time and then for some strange reason one of these moments comes along and you just take an irrational risk and get blown out. I read that and thought “I do that” - in all aspects of real life as well as in trading. Just that recognition has made my life much better because now I say to myself “Is this a sunspot moment” ?

Just like in real life, we get a load of sunspots (or is it the other way round) and then we get an “El Nino” in real life - or “Global warming” even )

I play online poker, which I understand is illegal for those of you in the US, but I find it a huge resource for understanding my own psychology.

The page is telling me that this is an old topic and do I really want to revive it ?

My answer is Yes I do, this aspect is a large part of the success or otherwise of our enterprise and is so often a neglected part of our education.

How about this.
To the degree that we get to the bottom of ourselves, is to the degree that we have mastered our own trading psychology.
I believe it all comes down to this question.
What makes us do what we do?
I think that’s a loaded question. It has to do with decision making. So therefore, what made us make this certain decision?
We can do things that are instinctual, without thinking. Or we can do things that are habit. Or because we have done this very thing before, so we just do it again. There are many thoughts that precede our decisions, and those that carry much more weight are usually what propels us to the decision. There are those things in our minds that we know we should do, but our emotions take over and therefore we act out because of them. So, I think that to the degree that we are aware of what’s really the trigger, to our decisions, the closer we will become to changing our decisions to what we know we should do. Look, I only say that last part because all you have to do is read everything here in B.P’s and after so long, you’ll definitely know what to do. It gets so repetitive. We just don’t do those things that we know we should do.
Well, then why? Let’s get to the bottom of it.
What was it that made me do what I did? And I mean, really. I think that most of the reasons will probably stem from root causes of an emotion. That’s why we spend so much time coming up with a good strategy, which was properly thought out and takes the emotions out of play. Then, I think we should even go as far as to figure out exactly what made us decide on the strategy itself.
Well, these are just some of my thoughts, on how I should be trading.
As for me, I hope that I can always point to a principle that ended up making me decide on something. I want to be guided by principles. Not anything else.
Then…live and learn.

Mike

I think getting to the bottom of ourselves is as much as anything the key - it is also incredibly difficult to do !
If you want try it - This book will show you things and take you to places you have no idea about ! (it may ruin your life though as the blinkers fall off your vision of those around you )
https://www.amazon.co.uk/GAMES-PEOPLE-PLAY-Eric-Berne/dp/B00B69147C/ref=sr_1_7?s=books&ie=UTF8&qid=1507816778&sr=1-7&keywords=games+people+play+eric+berne

There is also “Black Swans” by Nicholas nahim Taleb (sp) which tells us the very depressing news that our lives are planned out for us before we leave school and there is very little we can do to change it.

“Free Will”, decisions, All cast into our individual personality. How we react to loss / gain - Behavioural Economics tells us that people will take far more risk to avoid a loss than to achieve a gain - hence the risk of our winners being smaller than our losers - One of the very hardest things for us to avoid.

To change our psychologies, we have to know what they are in the first place - something very few of us do and even then something we simply don’t accept and find other excuse for. When a trade is going against us we stay in until ist “Reverses” (or not !) when we are winning, we are in a hurry to get out in case it “Reverses”, especially when it Does start to retrace !

Gwtting in to a trade - we are despeate to make all this money, but fearful that we will bet the wrong way - so we wait for confirmation -

The "Cat and the Rat"
A rat lived in a kitchen where the cat slept and was fed

One morning the Rat was looking out of his hole and saw the cat leave the Kitchen. He waited to see if the cat would come back, which it didn’t for sebveral hours. Now convinced he was safe, he left his hole and went to the pantry, ate his fill and was just about to return too his hole - when the cat, who had been outside doing “Cat things” came back through the door to have a sleep !

Thus is the nature of “Confirmation” :slight_smile:

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[quote=“MikeWolski, post:22, topic:71534”]
because all you have to do is read everything here in B.P’s and after so long, you’ll definitely know what to do. It gets so repetitive…{/quote]

Trading psychology is much important so try to build a strong mentality to trade more on demo account than on real account.

For a new trader, trading psychology is important since your mind controls how you respond to trade results, handle market fluctuations, and gauge how determined you are to use your trading technique. Best way to learn trading psychology is to adhere to patience and consistency.

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Actually, it takes time to absorb the facts of the psychology! And of course, there is no way to copying others here!

yes! but before actually reading about it observing one behaviour and thought process is what gives more clarity about trading psychology.

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