Trading psychology digging deeper
|June 22nd, 2016, 12:44 AM||#11 (permalink)|
Futures Experience: Advanced
Platform: ninja CQG OEC currenex
Favorite Futures: ES CL
Posts: 45 since May 2012
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l totally agree with Dr Brett's article. There is no separation of psychology, only a difference of environment in which & with which we interact. And in the case of trading, that's one of uncertainty & risk & its impacted upon by our psychological makeup built up through years of interacting in a range of other environments.
I add a link to another article from Dr Brett that I think strikes at the heart of the issue in many (perhaps the majority?) of the cases where traders seek help with or blame their trading psychology.
Quote from the article:
"True, psychological variables become relevant once skills are honed.* Then mindset can help deploy them consistently.* But no amount of focus on the mental game can substitute for skill and preparation and the need for strategies that possess an objective edge in the marketplace.* Trading randomness with a positive attitude will make one a good loser, not a high performing winner"
The literature over decades of research into performance-based expertise shows that the best way to hone the skills & abilities necessary to perform at a high level on a consistent basis is through deliberative practice. Highly concentrated, slow, focussed, goal-based practice, with analysis & immediate feedback, leading to adjustments & new goals.
The books by Daniel Coyle & Geoff Colvin are good introductions to the literature.
In addition I would say that the single most beneficial tool or psychological aide beyond reaching a sufficient skill level & showing a demonstrable edge through a significant period of deliberative practice, is to employ and practice a form of mindfulness or meditation when trading (& in life in general). Our minds feed us all sorts of crap, all the time. Dr Gary Dayton's book covers this very well.
Unfortunately almost all traders start out by reading a bit about trading methodologies & then plunging straight into the live market without ever formulating an edge nor thoroughly developing & honing the skills necessary to consistently execute & capture that edge. ln a performance-based environment of uncertainty & risk, this has inevitable negative consequences for both their psychology & their account.
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