Is Trading Psychology a Hoax? - Psychology and Money Management | futures io social day trading
futures io futures trading


Is Trading Psychology a Hoax?
Updated: Views / Replies:14,532 / 140
Created: by aligator Attachments:8

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 8  
 
Thread Tools Search this Thread
 

Is Trading Psychology a Hoax?

  #121 (permalink)
Market Wizard
Las Vegas, NV
 
Futures Experience: Advanced
Platform: Abacus, Slide Rule, HP-65, Metastock, TOS, NT
Favorite Futures: Futures
 
aligator's Avatar
 
Posts: 3,424 since Aug 2010
Thanks: 1,053 given, 5,822 received
Forum Reputation: Legendary


Big Mike View Post
Bottom line, discounting psychology is the same as discounting your mental health. Psychology doesn't mean seeing a shrink. It means being aware of your mind and its behaviors. Surely you aren't going to try and make an argument that mental health is unimportant.

I for one try not to be so close minded to think that I can just use willpower alone to be good at something.

Skill is composed of more things than just physical prowess. There is also mental aptitude. And in order to exercise your mind, you must at least accept that psychology is not a "hoax".

Mike

Agree with all, except one thing. The argument is not based on being close minded. The title of this thread and the jest of the discussion is: Is "Trading Psychology" is a Hoax, not Human Psychology. I am not about to challenge Sigmund Freud.

No one denies there is a human psychology component in every job, and trading is no different. If you talk to real psychology experts with credentials they will tell you that majority of the the real issues affecting job performance are not related to job itself. So, why is it that a trader under pressure deserves a unique brand of psychology and is different from a sales professional under pressure to meet his monthly quotas.

Tiger (a bad example here, because he is one of the best) is just recovering after two years of therapy for issues that had nothing to do with course management or his swing mechanics, but were affecting his performance. That is "Human" psychology not "Golfers" psychology. This is true for any job, but to make a unique distinction of "Traders Psychology" is a hoax.

Like any other job, a trader needs to gain and master the knowledge, skills, mechanics, poses experience, perform the job and deal with the human psychological aspect of trading like any other job.

Do some 4 billion workers in the world need to see a psychiatrist to perform their jobs? Not a chance, unless they have gone crazy insisting on doing a job they can't be fit for.

What is unreal here is that some claim 50 percent of trading is psychology. While that maybe the case for gambling, it is far from truth in intelligent trading. Trading is just another job, no more no less.

A quote from Wychoff:

"Anyone who buys or sells a stock, a bond or a commodity for profit is speculating if he employs intelligent foresight. If he does not, he is gambling."

Richard D. Wyckoff, American pioneer in technical stock analysis"


Last edited by aligator; February 19th, 2013 at 02:36 PM.
Reply With Quote
The following user says Thank You to aligator for this post:
 
  #122 (permalink)
Market Wizard
Bangkok
 
Futures Experience: Intermediate
Platform: MultiCharts.NET, S5, Ninj
Broker/Data: AMP, S5, IB
Favorite Futures: ES
 
DionysusToast's Avatar
 
Posts: 2,673 since Nov 2010
Thanks: 777 given, 8,742 received
Forum Reputation: Legendary

Have any of you men suffered from performance anxiety in the bedroom and seen the rather deflating results?

Happens to all of us at some point, usually through wanting to impress a new partner.

Same sort of thing in my opinion. Sometimes you can do something over & over & over again but then you start making it a conscious thing and boom - the wind goes right out of your sails.

It's not unusual at all.

Reply With Quote
 
  #123 (permalink)
Elite Member
Budapest, Hungary
 
Futures Experience: Advanced
Platform: Windows 95
Favorite Futures: GC, CL, 6E
 
Yuri57's Avatar
 
Posts: 278 since Feb 2013
Thanks: 71 given, 103 received



liquidcci View Post
Psychology will not fix a bad strategy but psychological issues can destroy a good strategy.

Well said. A trader should be clear-headed. If he is not he is either trading too big or inexperienced.

I have experienced my limits and I pay attention not to push myself over the edge EVER.

When I had discomfort while trading I always f#cked it up. So first I stopped trading when I had this bad feeling later I learned that I shouldn't stress myself and make trading decisions I will be satisfied with. For this you need to know your limits.

---

Talking about psychology I think it is good guess what are the bears and what the bulls are anticipating.

Reply With Quote
 
  #124 (permalink)
Elite Member
Hervey Bay Qld Australia
 
Futures Experience: Intermediate
Platform: NinjaTrader
Favorite Futures: Futures
 
Posts: 210 since Sep 2011
Thanks: 152 given, 349 received

Interesting topstep interview


Yuri57 View Post
Talking about psychology I think it is good guess what are the bears and what the bulls are anticipating.

I have heard this referred to as "Theory of mind" - and some believes its an edge in the markets. I am having a look at this at present - volume profile and trying to understand what others may be thinking at specific levels.

An interesting interview at topstep trader - one of the newly funded traders said that trading psychology (or awareness of self and limits and personality) was the key to become profitable (he pulled some big numbers). He also said that trading psychology is the difference between the 95% and the 5%. Everyone wants an indicator and method but few look at their routines, processes etc when it comes to decision making. Those that do he believes excel. In his journal he writes down the mistakes he makes or things that go wrong - and then looks for patterns - usually one common error can come out in a few ways in trading. So he works on that and its helped him.

Reply With Quote
The following user says Thank You to Disciple for this post:
 
  #125 (permalink)
CL Assassin
Near Dallas, Texas, US
 
Futures Experience: Advanced
Platform: NinjaTrader
Broker/Data: ZenFire
Favorite Futures: CL
 
Gary's Avatar
 
Posts: 1,070 since Jun 2009
Thanks: 504 given, 2,230 received

Fun thread...

I really enjoy threads like this one.

I know what I would call 'the psychological factors' were what personally held me back from consistency.

One example: take an average trader; you know the one, the one which is losing money, or is not consistently making profits, and let's say this trader has a problem with over-trading. Maybe this is you now?

Let's assume he has already identified that he over-trades often, which of course results in less than desirable results. Less than desirable because 1) he loses money in the long term because of this 'issue', and more importantly 2) because he realizes he is not able to follow a plan which dictates that he only take X trades per day/week, etc. A plan which states he should only focus on one, maybe two A+ type setups. He is not able to control himself. He cannot help but over-trade, and as soon as he does, he realizes the mistake he has made, but will continue to repeat this mistake for some time. Many times until the pain has reached some individual threshold, or the money is gone.

Now, ask this trader to only focus on taking no more than one trade per day for a few weeks. Ask him to not focus on making money, not even to focus on not losing money, simply focus on only taking at most, one trade per day.

How many of the average trader can even do this?

In my experience, very very few.

So, then, the question is why?

Not an easy question to answer, as each of us have a history, experience, and mental 'makeup' unlike any other person.

So, then why do so many people regardless of their history/experience/makeup suffer from similar symptoms?

I believe because we have more in common than we think when it comes to reactions to things such as fear, greed, pain, etc.

And, if this is true, then in my humble opinion, the good news is this means many of these issues or obstacles can be over-come in similar ways. Spend enough time working with people, studying people, working through your own demons, etc., and often this experience can be translated into practical exercises which can help others to overcome these same obstacles. This is where forums like BigMikeTrading can become an invaluable tool.


Spend enough time, and you will find that many of the traders who are consistently profitable talk about the importance of the mental game, their "pre-game" preparation, their ability to be self-aware, to know when they are "in the zone", and when they are not, and other similar topics. Coincidence?

If this is not psychology (trading or otherwise), then what is it?

Gary

Reply With Quote
The following 2 users say Thank You to Gary for this post:
 
  #126 (permalink)
Elite Member
Tulsa, OK
 
Futures Experience: Beginner
Platform: Jigsaw, Ninja Trader, Sierra Chart
Broker/Data: Ninjatrader/Rithmic
Favorite Futures: G&L Tribute Series Rampage
 
omni72's Avatar
 
Posts: 348 since Jan 2012
Thanks: 582 given, 619 received

A recent dialog with Dr. Brett

I recently had the pleasure of enjoying a tiny bit of dialog with Dr. Brett regarding some psychology and trading type stuff, and included it in my latest journal entry. Our esteemed futures.io (formerly BMT) friend @josh thought it would fit in well with this thread, so I was more than happy to share it here:


Quoting 

Quoting 
Hi Dr Brett -

I have a question I thought you may be able to help me with. Thanks to my wife's keen eye, we came across an article (Why We Think Thin | Psychology Today) related to eating. Rather than try to paraphrase the content for you, if you have about three minutes to read it you'll probably get a better idea of what the author was conveying.

My question is: how likely is it that traders develop and perpetuate processes similar to those described in the article? It seems like a very easy task to replace 'eating' with 'trading'. Of course, I have a biased perspective because I already don't believe the frequently shared suggestion to control/eliminate/remove emotions from trading. Acknowledge, recognize, study, learn, manage - all those seem like worthy pursuits.

On the surface it may seem like a simple matter of semantics, but I think it is more than that. Traders, especially developing or struggling traders, really latch on to things like 'remove your emotions'. And when they can't do the impossible, it just reinforces their already fragile and unrealistic expectations of themselves.

Hi Derek,

Yes, I think there is a connection between the eating issue and the emotions issue in trading. Conscious strategies to (over)control behavior can unwittingly amplify that behavior. It's like telling yourself to not think about pink elephants. A different approach would be mindfulness, which would encourage people to observe their emotions, but not become absorbed/identified with them.

That being said, I continue to believe that the majority of emotional overreactions among traders are attributable to poor trading practices. Traders use the same setups and methods across different kinds of markets and inevitably run into periods where those methods stop working. The inability to adapt to shifting market conditions creates frustrations which then fuel (further) poor trading practices. A good example would be traders relying on momentum or trend trading methods in low volatility regimes. The usual advice in such a situation, "Trade your plan", "control emotions", etc is off the mark, IMO.

Brett


Luck is what happens when preparation meets opportunity. ~ Seneca
Reply With Quote
The following user says Thank You to omni72 for this post:
 
  #127 (permalink)
Site Administrator
Manta, Ecuador
 
Futures Experience: Advanced
Platform: My own custom solution
Favorite Futures: E-mini ES S&P 500
 
Big Mike's Avatar
 
Posts: 46,240 since Jun 2009
Thanks: 29,354 given, 83,237 received

There are a lot of axioms in trading.

"Trade your plan" for example, well does anyone expect that not following your plan would somehow lead to better results?

"Control emotions", again -- does anyone think having out of control emotions would be a plus in trading?

If you go back thru futures.io (formerly BMT) journals and read posts you'll find some where the trader has had a really bad day. More times than not, when a trader has a really bad day, it isn't because they were in control of their emotions and followed their plan.

So those axioms are only useful in as much as they are simply requirements, prerequisites, for being a good trader.

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

Reply With Quote
The following 2 users say Thank You to Big Mike for this post:
 
  #128 (permalink)
Site Administrator
Manta, Ecuador
 
Futures Experience: Advanced
Platform: My own custom solution
Favorite Futures: E-mini ES S&P 500
 
Big Mike's Avatar
 
Posts: 46,240 since Jun 2009
Thanks: 29,354 given, 83,237 received

BTW you can't will yourself into following your plan or trading without emotion. Those things require practice and an environment where you can measure your actions.

Sent from my Nexus 4

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

Reply With Quote
 
  #129 (permalink)
Elite Member
Tulsa, OK
 
Futures Experience: Beginner
Platform: Jigsaw, Ninja Trader, Sierra Chart
Broker/Data: Ninjatrader/Rithmic
Favorite Futures: G&L Tribute Series Rampage
 
omni72's Avatar
 
Posts: 348 since Jan 2012
Thanks: 582 given, 619 received


Big Mike View Post
There are a lot of axioms in trading.

"Trade your plan" for example, well does anyone expect that not following your plan would somehow lead to better results?

"Control emotions", again -- does anyone think having out of control emotions would be a plus in trading?

If you go back thru futures.io (formerly BMT) journals and read posts you'll find some where the trader has had a really bad day. More times than not, when a trader has a really bad day, it isn't because they were in control of their emotions and followed their plan.

So those axioms are only useful in as much as they are simply requirements, prerequisites, for being a good trader.

Mike

I think in concept, we are probably on a similar page in regard to these topics.

However, anyone trying to control or eliminate their emotions is destined to fail. Actively aware of them? Sure. But there is a potentially wide band of variance covering the space between out of control and emotionally stable. And if some one has out of control emotions, trading will just be another way to express that.

As for trading plans, I no longer buy into 'any plan is better than no plan'. I used to, but it no longer makes sense to me. A crappy plan will lead to crappy results which will PROBABLY amplify any emotional or mental issues the trader is dealing with. Does he deviate from his plan because he's an emotional wreck or is he an emotional wreck because his plan was crap to begin with?

I think most struggling traders create plans for their ideal, future self instead of their realistic, current self. It's like deciding to start working out tomorrow by following a plan that has you benching 300-lb on day one. You're not ready for 300-lb today, so if that is your 'any plan', you're gonna fail. Start with a plan that has you starting with just the weight of the bar. That's where your current self is. That doesn't mean a 300-lb press plan isn't in your future - it's just not your in your today.

Also, I'm not immune to any of this crap either. I still often try to enlist the skills and talents of my future self

Edit: @Big Mike, After re-reading your post, I'm not sure I took away what you intended. I started to edit my response, but opted to leave it as is so that you can correct any misunderstandings I may have come away with. Thanks, in advance.

Luck is what happens when preparation meets opportunity. ~ Seneca
Reply With Quote
The following user says Thank You to omni72 for this post:
 
  #130 (permalink)
Site Administrator
Manta, Ecuador
 
Futures Experience: Advanced
Platform: My own custom solution
Favorite Futures: E-mini ES S&P 500
 
Big Mike's Avatar
 
Posts: 46,240 since Jun 2009
Thanks: 29,354 given, 83,237 received


In my experience emotions really only come into play when you start trying to force things. Simple as that.

Sent from my Nexus 4

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

Reply With Quote
The following 2 users say Thank You to Big Mike for this post:

Reply



futures io > > > Is Trading Psychology a Hoax?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Trading Psychology and How The Mind Works (I) George Psychology and Money Management 18 Yesterday 10:12 AM
Inspiration or hoax?! Trade it don't Date it (www.tradeitdontdateit.com) Cloudy Trading Reviews and Vendors 86 July 13th, 2017 01:14 PM
Trading Psychology Self Assessment dee50 Psychology and Money Management 7 May 21st, 2012 04:50 AM
Avoiding Secondhand Trading Psychology Anagami Psychology and Money Management 3 March 28th, 2011 12:28 PM
The Psychology Of Trading? NYSE Psychology and Money Management 7 November 21st, 2010 10:30 PM


All times are GMT -4. The time now is 10:32 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-16 in 0.17 seconds with 20 queries on phoenix via your IP 54.227.51.103