Thanks. Glad you like it. I believe in the law that “it is more blessed to give than to receive.” Whatever i give out, i know it will return back to me 10 fold and more.
Follow my other thread on live trading calls.
http://forums.babypips.com/free-forex-trading-systems/45262-live-trading-forex-mind-games.html
I am spending fair amounts of time on this trading desk setup series. A conducive trading environment does help towards better trading. It causes our mind not to be distracted, and enables us to focus on the task at hand. That task is to look for opportunities to enter a trade when the trade comes. Trading is hard enough. Therefore i am making as many positive traits into my trading environment as possible.
For part 3, lets look at the setup of a good trading room. Here are some checklist recommendations to enhance your trading room.
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Room with windows and curtains. We need sunlight. The sun actually helps to regulate our bio rhythm. we humans follow the path of the sun. When the sun rises, we rises with it. When the sun sets, our body slows it. If your trading room has no windows, such as basement rooms, i would recommend you to shift to a proper room.
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Proper room temperature. Regulate your room temperature with either air-conditioning or heater. I stay in a tropical country. Air-conditioning is a must-must for me. Else i will melt in the sweltering heat. However, if you are living in a cold country, the reverse is for you. Get your room properly heated up to a comfortable temperature.
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Neatness and tidiness. As your mum used to say when you are a kid, “CLEAN UP YOUR ROOM!!” With a clutter-free and neatly organized room, you will be amazed at the ability of your mind to think clearly.
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Ambience. I prefer trading in a quiet environment, so there are no televisions or radios in my room. And i closed my door and turn on the air-conditioning. Some of you have different tastes. If you like some ambient noise, play some soft music. Some others like to have their television tuned in to CNBC in the
background. Do whatever you wish. Make sure it is nice and cosy, just the way you like it to your style.
Happy trading. If you have new suggestions to improving your trading room, email to me. I would love to hear from you. 8=)
good setup, one additional thing you might consider to add are white boards. either the wall mount type or standing type if you have space. very good to have for you to write important figures and notes. for me, i will write down my daily target entry price, profit target etc on the various products i’m trading. also quotes for self improvement or things you learnt thru your trading experience, reminders for yourself mistakes made or rules for yourself to follow during trading…
really good to have, much easier to turn your head and look rather then writing down on notepads or electronic notes.
cheers!
thanks bro. Really good suggestion. I have one, but did not thought of using it in this way. Now i will. 8=)
Great stuff guys!
I couldn’t agree more.
I’d like to add something - as the old Greeks said - a sound mind in a sound body.
Take care of your health and your brain will perform better.
thanks. keep on reading!
Yup. Good health is essential to good trading. For that, i go jogging once or twice a week.
Five orders of thinking
Trading is a mind game. In order to win consistently in this game, we have to know what the big players (ie the operators such as hedge funds, international banks, central banks) are thinking. And we need to discern whether the small players (ie the retail traders) are trading with the big operators or not.
Ever since trading has shifted away from the floor pits onto the electronic screen, trading has become a mind-reading game. On the floor, we can hear, feel and breathe the excitement, boredom and sheer panic by the floor traders. We cannot literally replicate any of these on the computer screens any more. We can only gauge the mood of the traders via price action on our charting platforms. So in essence we are playing electronic versions of mind games with the market, with other traders, and with the price action.
When the market moves, we must inject our own emotions into that move. For example, while ECB Draghi is making a speech and EURUSD is dropping like a rock at the same time, what should we think? We say to ourselves, “Aha! I know what the market is thinking. The large players are selling and dumping their positions. I will join in the shorting.”
Treating trading as a mind game forces us to think in a higher order of thinking. Here are the 5 orders of thinking.
1st order of thinking - we have to think for and of ourselves. I am feeling bullish today. I am not feeling well yesterday.
2nd order - we think of the meaning of the past and current price action. Is this price action a real breakout? Is this trend line going to hold?
3rd order - we think of what the retail traders are thinking. Do i trade with or fade the retail traders?
4th order - we think of what big operators are thinking. Do i know where the big operators are pushing the price to? If i know, i can follow them.
5th order - we think of the market as one single entity. The market is a living and breathing creature. It is alive! Think of the market as your girlfriend or wife. Or if you are a woman, think of it as your boyfriend or husband. Get to know your market as your girlfriend / wife. Talk with her. Understand her moods and emotions. Is it that time of the month already? Spend quality time with her. Buy her gifts. Bring her to her favorite restaurant. After spending years with her, you will gradually be able to predict her next move.
Likewise, after you spend years observing the market movements, you develop an intuition for where it is going. This is the highest order of trading. Trading is truly truly a mind game.
Market is manipulated
“Market is manipulated!!” Chant it and repeat after me. “Market is manipulated!!” The sooner we get this truth into our trading psyche, the faster we progress toward our trading success.
Whether we like or not, whether we acknowledge it or not, it is what it is. Market manipulations happen all the time. It happened 100 years ago with the bucket shops. Read “Reminiscences of a Stock Operator.” It is happening now with fixing of the LIBOR rate. See article below. And it will happen again 100 years from now.
You see. The market is basically a buying and selling of information. He who has the late-est and best-est news, earli-est and fast-est usually wins the trading game. You know from a reliable grapevine that Company ABC is rumoured to be a takeover target. The share price is currently trading at $10. What do you do? You buy all the shares you can afford to buy! When the takeover news becomes public information, the news drives the herd to get excited and starts buying. The share price goes up. You then sell your shares at $20 to the herd who are buying it at $20 from you. Those who get caught by the authorities for insider trading are few and far between. The majority of insider trading simply slips under the radar unnoticed.
Trading is a rigged game. So wake up traders. If you decide to continue to play this game, be wary and be aware.
True!
While there are some big sharks who continually try to manipulate the markets this is not always the case. And you can still learn to trade the markets successfully in spite of that fact.
In the forex market particularly it is very hard to manipulate prices for any considerable length of time. That’s why I prefer it to stocks. 
Mindset between a losing trader and a winning trader
Mindset of a losing trader
When i win:
•[self praise] Wow! I am good.
•[over confidence] Look at me. Trading is easy.
•[ego and boastful] I am going to tell my friends, my family, my dog and pet hamster how much $$$ i made yesterday.
When i lose:
•[blames the market] &%#^$* What is wrong with them markets?!?! You are going in the wrong direction!!
•[blames the tipster] Why did i listen to that lousy guy? He made me lose money.
•[pride] I am never ever going to cut my losses. It may turn around. I am buying more since it is cheaper now.
Mindset of a winning trader
When i win:
•[appreciative] Thank you Mr Market for the profits. You made my day!
•[My analysis was correct] I plan my trade and trade my plan. And it turn out be a winner!
•[Let my profits run] Hopefully it turn out be a great trending trade.
When i lose:
•[self evaluation] Hmmm. My analysis is wrong. Let me find out why.
•[humble and willing to learn] Ok, here is the reason. Try not to repeat the same mistake again.
•[What’s next?] Lets move on. Lets find the next great trade.
Stocks is way easier to manipulate. The big sharks almost always have the most advanced information. And they buy or sell ahead of the public. days and weeks before the official announcement of the news.
that’s great mindset! keep going, mate!
We have eyes yet we do not see. When our eyes are opened, we saw what was always right there in front of us. It is “hidden in plain sight.” I have talking about 88.6% for the whole of this week. Once i know the “what”, it becomes that much easier to find the “where.”
88.6% as a trading strategy, when utilised with other trading tools, should yield profitable results over time. Below is a screenshot of another 88.6% on the AUDUSD 1hr chart.
Do not ignore this simple trading system. Plot the FIBO retracement levels IN ADVANCE. When the markets makes a high and a low, preferably on a larger timeframe such as the 1hr or more, put in the FIBO levels immediately. Then watch what prices do when it retraces to the FIBO levels. If the FIBO levels coincide with previous major support and resistance levels, this gives double confirmation. This should give the trader extra confidence that the trade will be profitable.
good post, fear is the biggest problem by far. Even if the new trader is fearless to begin with, fear will develop after a few losing trades, as the losses get bigger so does the fear. I don’t know the answer.