Hey everyone! Quick question… what are the best resources for understanding “trading psychology”?
Any of Brett Steenbarger’s books will do you well.
look for a paper called “emotion free trading” or something similar SweetPip posted a link to it. I cant find it right now?
I am reading The Psychology of Trading by Steenbarger. It is a very good place to start.
Trading in the Zone by Mark Douglas made great improvements to my trading
The biggest resource you have is how you feel about trading. Fear and greed, I reckon, are the two biggest enemies to trading successfully.
These feelings, coupled with doubt can mess up any system or strategy.
Very true Mike.
But the trick is to recognise how greed and fear makes you deviate from your specific, written strategy.
That’s why these trading psychology books are great. Talking about greed and fear is great but unless you have the tools to see them manifest themselves in your trading, and then learn and develop the tools to overcome them, then it’s all a bit vague.
The book I have recommended does just that-it was a real eye opener and i wish I’d read it years ago.
No amount of “trading psychology” will prevent you from experiencing the feelings that are likely to come up when you actually trade.
Those feelings and how you act upon them is a large part of your trading system.
For example, feelings of greed can lead you to overlook obvious mistakes when you evaluate a system; this unfounded optimism can lead to some large losses.
Conversely, feelings of fear can lead you to abandon a very profitable system during a draw-down. This can lead you to pull out at exactly the wrong time; had you stuck with your system for another month, it would’ve been profitable again.
After reading the fine books suggested by everyone here, don’t forget to take a look at yourself and YOUR trading psychology.
Thanks for the suggestions everyone and I’m sure these books will help me examine my own limiting beliefs that keep me from banking some pips!