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.
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 !
[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]
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.
Trading psychology is all about one’s mindset and how one utilises it in trading to get the maximum out of it. With practice and learning, anyone can improve trading psychology. With time, it improves as a trader understands the market. Without understanding the market, however, it is not easy to improve one’s trading psychology. Therefore, it is the height of folly to assume that trading psychology will improve on its own without one’s efforts.
It is possible to learn about trading psychology. It takes time to grasp the matter, but with time, everything will be fine. Just be open to learning, and you will learn everything. The internet and books will help you learn it easily.
