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Ok, but one's plan and one's methodology must "work" first. If my plan says buy at A if X happens, and yours says sell at A if X happens, and our plans are consistently opposite one another, then even given a large sample, either one methodology will be consistently profitable, or neither will, but both cannot. It's a bit of an extreme example, but is sufficient to prove that a plan and a methodology applied in an unwavering manner does not necessarily yield any kind of edge at all.
First of all, let me make it clear, that I do not define trading success as breakeven trading, or simply being profitable, but as the ability to support yourself and your family, solely from your trading, over an extended period of time, without reverting back to the mean. If you believe the statistics that are routinely disseminated, the percentage of traders that can lay claim to the title of "successful trader" is 5%, which in reality, is probably overestimated. So indeed, it must require a substantial amount of skills to generate an edge that would consistently produce the necessary profits.
There are a myriad of reasons (both internal and external) why most traders fail to become successful traders. I have often touched upon the most salient, in previous posts. But, not unlike the roulette player who has has stumbled upon a biased wheel, only to have the pit boss or casino manager pull the wheel as soon the word had gotten back to the house, any exploitable consistency or pattern in the market, will quickly be gamed out, and rendered less than useful. Markets are always changing, as the players change, and the algorithms change, hence the term "ever-changing- cycles." Most traders remain static and trade in a way that is most comfortable emotionally, and not necessarily most profitable.
I think my edge comes from "accepting" the market for what it really is - ever changing, and highly variant. It's not about being right or wrong the market, or predicting where the market is headed in the next moment, hour, day or week. Trading is nothing more than a probabilistic exercise, and a trade nothing more than a statistical data point - the next event in a series of events governed by the statistical random distribution of results. Nothing "has" to happen, and certainly not because it has happened in the past. But, I am prepared for it when it does happen, and fear does not guide my trade, so if I feel that I have the edge in the trade, I not only will not be shaken out, I will be adding to the trade.
I think key is 'extended period of time'. Most people think if they have a good month or even a good year they can trade but really I believe it takes longer periods of time to truly prove an edge vs just random luck.
Of course time is interchangeable with trade frequency, 10 trades a year is worth far less than 1,000 in my view when quantifying an edge.
Asking if psychology plays a role in trading, is like asking whether psychology plays a role in success.
Of curse it does, because without determination, sweat and sacrifice you get nowhere.
But, in the trading world "psychology" has become the blame game, the bastard child, the whipping lash and the S&M session that we all have go through while reclining our heads with shame when someone says you says "hey, you trading sucks, you need to work on your psychology".
I went through buying highs, selling lows, panicking, getting excited and so did YOU.
But, I assure you that we all don't have the same psychological issue.
What helped me over time is understanding market structure, how buyers and sellers interact, why new highs brings more highs, and above all when not to trade.
I have learned from selected few who were great in teaching me market structure, volume and pattern recognition while the psychology books came after.
The industry of educators, mentors, and all the vendors, etc caught wind of the fact that everyone makes the same errors and isn't it just "genius" to point out the obvious? Trading is a business where if you know 2% more than your friend, you are considered a wunder kid. I have made here a webinar a while back about "psychology" but I had no intention of sounding like a clinical psychologist or pick on anyone, it was merely my experience with customers with the best attempt to help. A series of psychology topics came after in webinars which for the most part were good, except for one where he ripped everyone for pieces and called everyone undisciplined and greedy. Thank you, Thank you very much (read as Elvis would) and now what?
The bottom line is that you can turn psychology into a hoax, or make it part of your trading experience in the right place in the right time.
Like @tigertrader said it's 5% successful if that...which means that most of the one who you consider successful are not...they are just good in lecturing you.
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