Just a quick one following a challenge I did this week with very small positions, which posed the question do most traders fail because they have no respect for the position ie very small have a could not careless attitude and just trade anything or to big and get frightened not allowing the trade to grow.
Just a thought
maybe I respect the money and the process.
I try to at least.
do you think the fed will print more?
I think a lot of traders, especially new believe the hype, don’t get a good grounding in FX, rush in and believe it is the holy grail for making money.
Then have beginners luck which results in greed, or don’t manage their accounts well trading ,not understanding leverage etc and this results in fear.
The old adage fight or flight, it’s okay being physically fit, but in trading you need to be mentally fit as well.
I feel you have to respect both of them. You can’t take them seriously if you don’t.
Im going to guess that its simply the learning curve and self teaching can be hard and slow at times.
Maybe its not particularly related, but ive been listening to “The Trading Nut Podcast” on the drive to work recently and worked my way through all the episodes, each episode is an interview with a profitable/professional trader, funny thing is that just about every single trader said that in the beginning they blew accounts, sometimes many and crazy amounts of money, all through lack of proper education, crazy position sizes, greed etc, etc.
To me personally this shows that its normal to blow accounts, want to give up, give into greed etc, etc because the fact is were all human, and these are normal human traits.
The way I see it, is that trading itself is borderline greedy anyway, which I am ok with because its normal, I mean the passion comes purely from the desire to make money from an easy job by sitting at a computer screen and clicking a mouse. Is trading tough and stressfull? Probably, but its less stress than my current job and can potentially make more money, so Im sold on that.
Another funny thing is that every trader ive listened to on the podcast has had proper teaching/mentoring to get to where there at now. Probably one of the reasons why a certain percentage fail/give up
The Main advantage of that process is that at least you KNOW - The teacher is on YOUR side !
I started being interested in this stuff 50 years ago - and in ALL that time - I have come across a huge number of Books, “Mentors” and lately “u-tub vids” - Never once have I found ONE who was worth paying a lot of money for ! - Yes You get “snippets” because the more you look at a problem from different perspectives the better your understanding gets !
So back t the original question - "Do you respect money " = Absolutely NOT ! - Money is a piece of paper with a picture printed on it ! what’s to “RESPECT” ?
Read this !
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"Do you respect the “process” ?
WHat “Process” ? - the markets are Schitzophrenic and Psychopathic in varying amounts - MAnic, Depressive, Manipulated AND Manipulative ! And switches without warning - No Single “Process” can possibly cope with such a person / Game ! (And make no mistake this is simply a GAME! ) - the “Money” is just a way of keeping score !
Superb Observation ; - I’l put the "Book " in an edit - great insight !
Alexander Elder (Can’t remember which book - I have most of them) wrote "Learning to trade will cost you as much as a GOOD University Degree - Put an amount of money (He siad around $5,000 ) into an account and trade it until it os all gone - then stop - learn some more and repeat - As many times as necessary"
In Honesty Our Psyches are lagging by 30,000 years - we still have the psychology of stone age hunter gatherers - There is nothing in your emotional store which will in any way prepare you for trading ! - In fact almost All of your “Common sense” is entirely counter productive.
First steps are to KNow yourself.
Find and Pay for an “Excellent Psychologist” and get tested on the 5 major Personality Traits - so you know your basic personality and what you are likely to be good at doing - THen take a rigorous (Non-verbal) IQ test - so you know just how intelligent you are. (Bear in mind You ARE trading against the finest brains in the World and many Excellent Computer Programmes - Whatever "Patterns you see - will already have been seen and acted upon by “the opposition” ! (Usually to your detriment)
You are here to WIN - Not to “Respect” Anything or anybody - and if you want to Play - Your task is indeed an onerous one !
Oh and here’s something else you absolutely HAVE to read - or you WILL get stuffed !
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https://www.amazon.co.uk/How-Know-What-Isnt-Fallibility/dp/0029117062/ref=sr_1_1?crid=2FPVP51KYPJZL&dchild=1&keywords=how+we+know+what+isnt+so&qid=1594512596&sprefix=how+know+isnt%2Caps%2C234&sr=8-1
[Edit - World’s Champion Trader - Marty - “Buzzy Schwartz”
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https://www.amazon.co.uk/Pit-Bull-Lessons-Streets-Champion/dp/0887309569/ref=sr_1_1?crid=K41WQ44X9376&dchild=1&keywords=pit+bull+lessons+from+wall+street’s+champion+day+trader&qid=1594514034&sprefix=pit+bull%2Caps%2C196&sr=8-1
quote of the year!!!