Is It Possible To Learn About Trading Psychology?

In my trading career, I have come to learn that there are things that are easy to learn from the various trading resources and courses, but I have also come to terms with the fact that not everything can be learned outright. Somethings are better cultivated via experience.

I tend to think that there is no one out there really that can teach anyone about trading psychology and result in success. If there is, then I think it is most likely a handful. Over the last few weeks I have been contemplating about the chance of learning about trading psychology but it seems I am about to make the same conclusion I made about a year ago “I have to learn the hard way”.

Look @ what Chris Capre is doing…he’s legit.

Hi middaytrader

I am not sure whether this will help you and sorry in advance if it doesn’t…

When trading I advise all traders to write notes about exactly how they are feeling throughout the trading day. You would start by noting down how you feel pre trading, then when you open the charts, when you are in a trade, after the trade is closed and then finally after the trading day finishes.

Most people think this is long winded and that they do not have time to write all that whilst trading.

For me Psychology is the most important aspect of trading so this is worth the time invested.

If you have a good strategy it should bring about good performance. Most cannot follow the plan because of their emotions but are unaware of this. They think it is their trade plan at fault and search for the next holy grail.

By writing out the emotions you experience you can start to really learn more about yourself and at what point you were not in control of them.

I do not profess to able to teach you on Psychology and the books I can recommend you have probably already read but I do know that the more information you have about yourself the better.

From your findings you might be able to figure things out yourself or if you do see a coach then I can assure you they will appreciate the notes you have made.

Good Luck!!

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Thank you VeerTrade for your insights on Trading Psychology.
I think those are good points right there (Understanding Oneself). I have to admit that forums such as these (BabyPips) do help a lot in dealing with trading psychology, i.e you come to meet people who have been through worse and have been able to pick themselves up, and most of all some important insights as the one you just provided. Thank you for replying to this thread. I think it is an ongoing process (learning trading psychology).

It is very possible to learn about psychology in trading but many people could learn theoritically only and it is not easy to implement it well in reality. Mostly traders knew that it is important to stick on the rule (discipline with trading plan), patient in waiting the right time, don’t follow emotion in trading, control greediness, and many other psychology in trading but the reality is not as easy as its theory to control psychology especially when condition of market didn’t move like expectation.

Yeah, the theory is one thing, but I just can’t stay calm when I lose money. I think it will be going better during the time anyway.

The hard way is the way to go I believe. You can learn on in theory and its perfectly clear. but when it comes to REAL emotions its a completely different game. You will have to practise with real money in order to train your psychological skills, and I don’t see a way around it.

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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.