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Finally Turning the Corner, tha "its 80% Psychology" thing...


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Finally Turning the Corner, tha "its 80% Psychology" thing...

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  #101 (permalink)
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Sandpaddict View Post
Hi TropicalTrader. Great thread!

There is a seminal book called Flow: The Psychology of Optimal Experience by Mihaly Csikszentmihalyi.

This book belongs besides Thinking: Fast and Slow by Daniel Kahneman.

Flow is about those times when you are just in tune with whatever you are doing. Your tasks are challenging but not impossible. Your skills are being stretched but not beyond reach. Concentratation is high but not overly causing frustration or lacking causing boredom. You can almost watch yourself as your movement just flows from from a place of deep understanding. Time seems to not exist or to freeze or slow. You feel this is where you belong in this moment... forever...

This book takes a scientific route to explain the root of HAPPINESS.

And happiness, contentment and confidence are all traits as far as I can tell are prerequisites for long term successful trading.

We have all been IN THE FLOW when trading. This book explains that experience.

Good trading to all!

Thanks for the book recommendation! That will be my next audiobook.. I've heard some other books I've read quote that author. Cultivating flow is where its at. I think its really important for discretionary traders that we make the effort to program our minds with the right info and understand 'the trading game' plus our strategy/s on a deep level. I think it would be hard to experience flow without that..

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  #102 (permalink)
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TropicalTrader View Post
Thanks for the book recommendation! That will be my next audiobook.. I've heard some other books I've read quote that author. Cultivating flow is where its at. I think its really important for discretionary traders that we make the effort to program our minds with the right info and understand 'the trading game' plus our strategy/s on a deep level. I think it would be hard to experience flow without that..

Ya totally TropicalTrader. Part of "being in the flow" is when your skills are matched with the task. In a game where one opponent just dominates the game over and over because of knowledge or skill it becomes no fun for either side. But when the better player can play against an opponent with equal skill he will need to focus more. Concentrate and play with more finesse or whatever the game requires to beat the better player. And, gain FAR more satisfaction from playing well. Playing in the zone. In the FLOW. And the satisfaction that comes from the experience itself.

The markets vs ourselves leaves a lifetime of skills to master and move to the next level. To the next. To the next.

He also explains that flow is everywhere in life. He talks about I believe it was a Taiwanese man working in a factory putting together plasma TVs. He finds immense pleasure day in and day out trying to beat his best time. He has it down to a science and tries to improve it anyway he can. Funny part of this story is the man couldn't even afford one of these TVs!

I love the monkey brain/monkey man references. Its just so true.

Daniel kahneman who should know more than almost any man on the planet about our cognitive biases says even though he's been studying behavior and psychology his whole career/life he isn't immune and just as fallible as anyone else!

If that doesn't tell ya that it will take a certain SPECIAL type of person to have a risk centric yet risk adverse enough of a personality and be able to trade like a robot day in and day out for years without any emotion then I don't know but doesnt seems plausible to me.

We are only human after all.

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  #103 (permalink)
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TropicalTrader View Post
So my friend who manages risk has told me that sometimes some of their profitable traders do stupid things like adding to losers and refusing to exit with losses as trades move against them.

Not surprising; as you say, the monkey mind will sometimes take over. (Note that enforcing quotas will not prevent either of those behaviors - although it will limit the maximum loss.)


Quoting 
This is quite common in the trading world from what I've heard. There are stories about this in the book One Good Trade and other books on trading. I acknowledge these may not be the "seasoned" veterans who have been trading many years and are consistently profitable.

I hear your original point that fixing the issue is the solution. That's obvious.

The non-obvious part - and therefore the interesting one, at least to me as someone who has studied human behavior for many years - is that most people reject that solution forcefully, almost instinctively, the moment it's proposed. I suspect that it sounds like "BAD puppy! HEEL!" or something of the sort to them. And yet, given the depth of our reactions to financial losses, it's clear that the only truly effective solutions lie deep in our psyches as well.


Quoting 
The idea of the 'forced daily limit' is not a replacement for improving their discipline. The fact that a trader could respect their rules and limits for weeks or months shows that they are using their focus and intention. (as opposed to someone gambling having wild p-n-l swings everyday) However, this is quite common for "risk seeking personality" people to struggle with managing their limits at some point in their career.

Some rare individuals can stay completely rational everyday, week after week, month after month while risking hundreds or thousands of dollars a day, but that is extremely uncommon for most people There is a very good reason why traders at prop firms usually have access to trading psychologists and some of the best work with them regularly. In these moments of irrationality if the monkey mind takes over then limits and rules can be thrown out the window.

We are in complete agreement on all of the above; during those times, having an externally-imposed hard limit is absolutely a benefit. The individual retail trader does not really have that option, although it can be simulated with a daily limit; I simply wanted to point out the flaws in the simulation (I can think of several ways that a frustrated/temporarily irrational trader can get around that limit.)

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  #104 (permalink)
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----------------
"We are in complete agreement on all of the above; during those times, having an externally-imposed hard limit is absolutely a benefit. The individual retail trader does not really have that option, although it can be simulated with a daily limit; I simply wanted to point out the flaws in the simulation (I can think of several ways that a frustrated/temporarily irrational trader can get around that limit.)"
-------‐----------

Such as?...

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  #105 (permalink)
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I have a $1000.00 loss limit with my broker, I day trade the ES, and I have never let that limit get hit.

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Sandpaddict View Post
----------------
"We are in complete agreement on all of the above; during those times, having an externally-imposed hard limit is absolutely a benefit. The individual retail trader does not really have that option, although it can be simulated with a daily limit; I simply wanted to point out the flaws in the simulation (I can think of several ways that a frustrated/temporarily irrational trader can get around that limit.)"
-------‐----------

Such as?...

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Anyone with sufficient imagination can visualize a frustrated trader who decides that he will not accept any restrictions - even ones that he himself had set up earlier. From there, it's just a matter of choice. Just off the top:

* Reset/cancel the limit
* Use another broker
* Open a RobinHood/WeBull account
* Trade crypto
* Playing around with margin and leverage (eventual losses >> fixed loss limit)
* Online poker/other gambling

If you want a parallel, imagine an alcoholic who really, truly, absolutely seriously commits to having no more than two drinks a day - and has no mental reservations when he makes that promise.

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  #107 (permalink)
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oceansailor View Post
Anyone with sufficient imagination can visualize a frustrated trader who decides that he will not accept any restrictions - even ones that he himself had set up earlier. From there, it's just a matter of choice. Just off the top:

* Reset/cancel the limit
* Use another broker
* Open a RobinHood/WeBull account
* Trade crypto
* Playing around with margin and leverage (eventual losses >> fixed loss limit)
* Online poker/other gambling

If you want a parallel, imagine an alcoholic who really, truly, absolutely seriously commits to having no more than two drinks a day - and has no mental reservations when he makes that promise.

My apologies oceansailor.

I thought you ment people can easily figure out how to get THEMSELVES out of those situations. Such as just using will power to cut loses that are out if control or something along thise lines.

But I'm on the side of "will power won't work".

But we do have to find a way to do the right thing because we know it's the right thing to do. Willing ourselves to do something we don't want to do won't work longer term.

Studies have even showed that using will power depletes energy and there is ONLY so much will power you have before it starts to deteriorate rapidly. Causing a chain reaction. No matter who you are. Granted different people have different tolerances but the idea remains the same.

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  #108 (permalink)
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Sandpaddict View Post

But I'm on the side of "will power won't work".

But we do have to find a way to do the right thing because we know it's the right thing to do. Willing ourselves to do something we don't want to do won't work longer term.

Studies have even showed that using will power depletes energy and there is ONLY so much will power you have before it starts to deteriorate rapidly. Causing a chain reaction. No matter who you are. Granted different people have different tolerances but the idea remains the same.

If you are not 100% confident in your edge then after a few losses in a row its going to be very hard to will yourself forward. You will be fighting your subconscious mind and its the 800 pound gorilla in the room..

I want to share that in reading your journal you remind me of a former version of myself. I was hell bent on doing it "my way" using just my renko patterns because I had spent a ton of time identifying and tracking them. I was fighting the market very often, fading strength, etc. I was very stubborn and needed to experience getting my ass handed to me over and over before I decided to get really humble and start a new round of the education process. I put my existing knowledge on a shelf and started fresh, taking a few very in depth courses and filling up 4 large notebooks with notes. Plus eveyday I committed to listen to at least 1 hour of psychology materials.

I was a member of Convergent Trading for about 6 months last year and watched all of FT's videos. Today I don't trade like he does (except for utilizing some of his stat plays and ideas around impulse continuations) but getting inside his head was extremely valuable to me. I saw the immense amount of work he has put in to his trading. I saw how confident he is in his edge and I believe thats what we need if we want to be a 50 lot trader one day.

My trading has been a mega rollercoaster and now its smoothed out considerably. I've developed way more patience and don't get as emotional or rattled as I used to. This year I've been doing a ton of work on reprogramming my subconscious mind and expanding my edge/profitability with order flow.

I think that before I had this egoistic idea to figure out the market but I guess I'm no Al Brooks lol. By learning from some really talented traders I've accelerated and thrilled to be where I am in my trading today.. For me after a long time in hell, the gates of heaven have opened..

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  #109 (permalink)
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Sandpaddict View Post
My apologies oceansailor.

I thought you ment people can easily figure out how to get THEMSELVES out of those situations. Such as just using will power to cut loses that are out if control or something along thise lines.

But I'm on the side of "will power won't work".

But we do have to find a way to do the right thing because we know it's the right thing to do. Willing ourselves to do something we don't want to do won't work longer term.

I'm with you WRT willpower; in fact, my take on the whole concept is that it's nothing more than self-abuse, in most cases. We do need to visualize a better version of ourselves in order to have a goal - but beating up on ourselves because we're not instantly perfect, or because we're not getting there at some ideal rate of improvement is never beneficial.

Meaningful self-improvement takes focus, skill, and mindful practice (all of which, unlike "willpower", are learnable skills). You never get to "perfection" - that's not a realistic goal, anyway - but it improves your life for every gain you do manage to make, and that's something that can be enjoyed and used as fuel for further improvement.

One of the things I love about trading is that it brings me face to face with things to improve - things that I would have had a hard time reaching otherwise, or didn't even realize I needed to change. It also keeps my head from getting too big... I'm quite successful in a number of other areas of life, but this one is going to keep me humble for a good long while yet.

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  #110 (permalink)
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oceansailor View Post
I'm with you WRT willpower; in fact, my take on the whole concept is that it's nothing more than self-abuse, in most cases. We do need to visualize a better version of ourselves in order to have a goal - but beating up on ourselves because we're not instantly perfect, or because we're not getting there at some ideal rate of improvement is never beneficial.

Meaningful self-improvement takes focus, skill, and mindful practice (all of which, unlike "willpower", are learnable skills). You never get to "perfection" - that's not a realistic goal, anyway - but it improves your life for every gain you do manage to make, and that's something that can be enjoyed and used as fuel for further improvement.

One of the things I love about trading is that it brings me face to face with things to improve - things that I would have had a hard time reaching otherwise, or didn't even realize I needed to change. It also keeps my head from getting too big... I'm quite successful in a number of other areas of life, but this one is going to keep me humble for a good long while yet.

Agreed!

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  #111 (permalink)
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TropicalTrader View Post
If you are not 100% confident in your edge then after a few losses in a row its going to be very hard to will yourself forward. You will be fighting your subconscious mind and its the 800 pound gorilla in the room..

I want to share that in reading your journal you remind me of a former version of myself. I was hell bent on doing it "my way" using just my renko patterns because I had spent a ton of time identifying and tracking them. I was fighting the market very often, fading strength, etc. I was very stubborn and needed to experience getting my ass handed to me over and over before I decided to get really humble and start a new round of the education process. I put my existing knowledge on a shelf and started fresh, taking a few very in depth courses and filling up 4 large notebooks with notes. Plus eveyday I committed to listen to at least 1 hour of psychology materials.

I was a member of Convergent Trading for about 6 months last year and watched all of FT's videos. Today I don't trade like he does (except for utilizing some of his stat plays and ideas around impulse continuations) but getting inside his head was extremely valuable to me. I saw the immense amount of work he has put in to his trading. I saw how confident he is in his edge and I believe thats what we need if we want to be a 50 lot trader one day.

My trading has been a mega rollercoaster and now its smoothed out considerably. I've developed way more patience and don't get as emotional or rattled as I used to. This year I've been doing a ton of work on reprogramming my subconscious mind and expanding my edge/profitability with order flow.

I think that before I had this egoistic idea to figure out the market but I guess I'm no Al Brooks lol. By learning from some really talented traders I've accelerated and thrilled to be where I am in my trading today.. For me after a long time in hell, the gates of heaven have opened..

Thanks again TropicalTrader. I think this was a nice foray onto this forum but Im really starting to think this forum is not for me. At least not as a participant.

I think people want to help in general here and this is the most caring forum I've been on with the absolute BEST people but the more I look for answers outside myself the more I just get the same answers. You need to look inside.

I need to learn to work my edge. I know what expectancy is. I know what risk and reward and probably are. I know WHAT I need to do. I need to learn to DO it and do it consistently.

I don't know any great skill that comes from ease. Knowing is the easy part. I have to go through the losses. And I'm learning to live with alot of smaller losses vs trying to avoid them. That's just where I'm at.

Im trying to stay in the futures game in live mode full time. Thats it. Thats my goal.

Im not committing huge amounts of capital at any one time. I need to find out what is wrong and fix it. That's painful and I'm learning but it's neccessary.

Im transitioning from SIM to live trading for the first time since first trying to trade futures live a year ago. I got REALLY slaughtered back then. So I'm not like that anymore but I have along way to go.

But like I said I think it's just time for me to move on. In the words of the littlest hobo...

Every stop I make, I make a new friend,
Can't stay for long, just turn around I'm gone again...

https://m.youtube.com/watch?v=JFGtRKx4ypY

Will repost in my journal.

Thankx for everything!


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  #112 (permalink)
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The addict has left the building, apparently.

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  #113 (permalink)
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This week I listened to Thinking in Bets by pro poker player Annie Duke. It was a great read and I highly recommend. She tells some entertaining stories and goes deep into Cognitive Biases. One of the terms I really like that I hadn't heard before is the word "Resulting" which is when we interpret things with a bias based on the result. Example, we veer off our plan and the trade works so we're happy and consider it a good trade vs veering off our plan and the trade doesn't work, now we're upset with ourselves. She goes pretty deep into a lot of psychology that's useful for traders.

Annie was a psychology major who's older brother became a pro poker player and then she got into it and was fortunate to be in a mastermind group with some of the world's best poker players who worked very hard on their craft...

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  #114 (permalink)
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--------------------------------
QUOTE from: Sandpaddict (I'm not making this a mention because he asked to be left alone)

Thanks again TropicalTrader. I think this was a nice foray onto this forum but Im really starting to think this forum is not for me. At least not as a participant.

I think people want to help in general here and this is the most caring forum I've been on with the absolute BEST people but the more I look for answers outside myself the more I just get the same answers. You need to look inside.

I need to learn to work my edge. I know what expectancy is. I know what risk and reward and probably are. I know WHAT I need to do. I need to learn to DO it and do it consistently.

I don't know any great skill that comes from ease. Knowing is the easy part. I have to go through the losses. And I'm learning to live with alot of smaller losses vs trying to avoid them. That's just where I'm at.

----------------------------------------

I think this is an excellent example of why most traders fail.

In modern society we are taught to try harder, work harder, "attack until we succeed" and this can produce results in many business endeavors - but its not likely to work in trading. Maybe after many, many, many years of getting the crap knocked outed of you, but most likely not.

To quote Mark Douglas "The best traders think differently." "They're not afraid".

When we are making effort and pushing hard to get to our goals, we see the obstacles as our enemies. The obstacles are blocking are path to the promised land. They are attacking our dreams of success. On those days when we've taken a few losses in a row its easy to go into pain and feel victimized by the market. "The market" is stopping us from succeeding. So the natural thing humans do is either try to fight the market (just keep buying that falling knife) or get scared out of the game.

If you don't start thinking differently, then you're not likely to step out of this destructive pattern. That's why I put "the it's 80% psychology thing" in the title of this thread.

We need to really understand our biases, like recency bias, "resulting" bias, black and white thinking (its either this or that, one extreme or the other), the illusion of certainty, etc.

Then, we need to train ourselves to think differently. So we never see the market as an enemy, to quote Andrew Menaker "it's an opportunity generating machine". WE are the obstacle. WE are the way. If you've ever had to train a dog, you'll know it takes a lot of effort, consistent focus over time. Same with us evolved monkeys - and knowing how to act when everything is going our way is one thing, knowing how to act when our emotions are going wild is another. As we retrain our brain and reprogram our subconscious mind to think differently about our experience with the market, there will be less emotions, we will have more ability to stay rational.

Always remember that its a marathon and if you're frustrated with all the disappointments after those brief moments of success, get real about this journey. I very much doubt that all your will power and force will do anything except dig you into a big hole - and we're here to live out our dreams! I know I AM..

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  #115 (permalink)
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Thanks for your comment on the 3 trading groups. Very intuitive and pretty much on the money.

Since you asked, I think I am in the group 2 camp, risk averse. I am very cautious, do only trades my broker recommends in her daily newsletters and my trades are mostly option spreads - maxed out for minimum risk and maintenance. I have only been doing this since April so I literally have a dearth of experience. So far I'm positive $198 dollars before fees and commissions and this doesn't trouble me at all - my account is less than five grand. Beats a savings account. I enjoy watching the option spreads - it takes them a while to come to profit/expiry, and in the meantime I can follow the profit and loss meandering about - its plenty of excitement for me. Mostly I am just trying to learn by watching, and see where it all takes me.

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  #116 (permalink)
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TropicalTrader View Post
So my friend who manages risk has told me that sometimes some of their profitable traders do stupid things like adding to losers and refusing to exit with losses as trades move against them. This is quite common in the trading world from what I've heard. There are stories about this in the book One Good Trade and other books on trading. I acknowledge these may not be the "seasoned" veterans who have been trading many years and are consistently profitable.



I hear your original point that fixing the issue is the solution. That's obvious. The idea of the 'forced daily limit' is not a replacement for improving their discipline. The fact that a trader could respect their rules and limits for weeks or months shows that they are using their focus and intention. (as opposed to someone gambling having wild p-n-l swings everyday) However, this is quite common for "risk seeking personality" people to struggle with managing their limits at some point in their career.



Some rare individuals can stay completely rational everyday, week after week, month after month while risking hundreds or thousands of dollars a day, but that is extremely uncommon for most people There is a very good reason why traders at prop firms usually have access to trading psychologists and some of the best work with them regularly. In these moments of irrationality if the monkey mind takes over then limits and rules can be thrown out the window.


Shark, the top SMB trader, said he lost 300K in a trade. He said it took him months to get back in the green. I wonder how thatís possible with their risk managers around. Swang, another too SMB trader, said his account size is $10 million. Iíd assume Shark also has around the same account size. If the recommended stop loss is no more than 1-2%, I wonder how Shark lost $300K or how he got to stay at SMB.



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Nolaughingmatter View Post
If the recommended stop loss is no more than 1-2%, I wonder how Shark lost $300K or how he got to stay at SMB.


Guys who make several million dollars a year are not subject to the same risk parameters as a new trader trying to break even. "How he got to stay at SMB"? Businesses work by retaining good people. You don't "let someone go" because they have a rough patch or make a mistake. Likely a loss like this was being actively managed (it was probably a multi-day trade) and the risks were understood. He was probably not using a hard stop anyway, and was probably trying to hedge off risk instead, but that's just a guess and I don't know anything about the circumstances.

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  #118 (permalink)
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Very interesting... SMB liked to say that their traders always have a stop or itís a fireable offense to go over the stop.


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Very interesting... SMB liked to say that their traders always have a stop or itís a fireable offense to go over the stop.


In stocks, gap risk is real and I'd not be surprised to find that a large loss like that was due to a big gap up/down. It's unlikely that a senior trader who mentors others would demonstrate a pattern of poor risk management, like adding beyond a predetermined risk amount. Either way, I have no doubt that the risk was discussed with everyone involved, and that it was not a "rogue trader loses his mind" situation.


I'll reiterate that a "stop" is not necessarily a "stop market" order. And especially not a single one. Particularly for larger positions, instead of just blowing out of it, often a hedge is put on and both are wound down. "Stop" in this context means "risk limit".

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Thank you for sharing this. It was extremely helpful to me. I finally started to realize that I need to work on my process and psychology. I will be using that list.


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After investigating many dozens of teachers and strategies over the years, I feel so much gratitude for discovering those listed on this page. Many others have helped in small ways but each of these people have helped me hugely.


My favorite trading psychogist is Dr. Andrew Menaker. (I love Dr. Brett Steenbarger too, but I relate more with Andrew because he's a full-time trader) His webinars have helped me tons. I've listened to each one of these on youtube at least 5-6 times and will continue to listen often - plus I will take his paid course after I've earned the funds from trading and personal coaching one day when I'm hitting big goals.
[yt]https://www.youtube.com/results?search_query=andrew+menaker[/yt]

My 4 Favorite Trading Mentors (alphabetical order)

Al Brooks (Price Action Trading)
Merritt Black (SMB Futures)
Morad Askar (aka FuturesTrader71)
Steve W (Paracurve)

Immense thankyou mentors. And huge thanks to Big Mike for this epic community and all of the effort to make this a ridiculously amazing forum.

Books that helped me bigtime:

*The Chimp Paradox (we also conveniently forget that we evolved from monkeys. when you get mad and revenge trade and blow up your account, its your monkey at work.. understanding this deeply really helps)

*Mindset by Carol Dweck (you can look on youtube for Mindset book summary to get the main points)

*Trading in the Zone by Mark Douglas (This is a very comprehensive book that I have listened to a few times and will continue to listen to every few months.)

*The Power of Habits and Atomic Habits (learning how to build consistency starts here imo)

*The Talent Code (get into the heads of peak performers, what really makes people great)


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Book Recommendation



I listened to this last week and highly recommend. Stoicism is a funny sounding word, apparently back "in the day" some of these philosophers would hang out near a "stoa" (porch). There's some great lessons in here and unique perspectives.



When we trade we endure hardship, now imagine if you could endure the hardship without any negative feelings. Think about what a huge asset that would be to your trading. When we start to think negatively, we filter information through a bias. (we fail to see things as they are).

The other point I want to make is that for me, trying to trade mechanically didn't work effectively. There was too much variance for my comfort levels. Have you ever played roulette? Do you know that sometimes there can be 14, or 17 reds or blacks in a row?! Think about trading 5 setups mechanically that each show a 60% win rate in your backtests (and you either make 1x or lose 1x). There's going to be times where you take a lot of losses in a row. That's going to feel very uncomfortable for most of us, we generally don't like feeling out of control.

Understanding context (auction market theory + price action) gives me a huge edge and feeling of control in my trading. I rarely experience the types of "emotional rollercoastering" I was going through before on a regular basis.

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Any recommendations for auction market theory and price action?

TropicalTrader View Post
Book Recommendation



I listened to this last week and highly recommend. Stoicism is a funny sounding word, apparently back "in the day" some of these philosophers would hang out near a "stoa" (porch). There's some great lessons in here and unique perspectives.



When we trade we endure hardship, now imagine if you could endure the hardship without any negative feelings. Think about what a huge asset that would be to your trading. When we start to think negatively, we filter information through a bias. (we fail to see things as they are).

The other point I want to make is that for me, trying to trade mechanically didn't work effectively. There was too much variance for my comfort levels. Have you ever played roulette? Do you know that sometimes there can be 14, or 17 reds or blacks in a row?! Think about trading 5 setups mechanically that each show a 60% win rate in your backtests (and you either make 1x or lose 1x). There's going to be times where you take a lot of losses in a row. That's going to feel very uncomfortable for most of us, we generally don't like feeling out of control.

Understanding context (auction market theory + price action) gives me a huge edge and feeling of control in my trading. I rarely experience the types of "emotional rollercoastering" I was going through before on a regular basis.

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Book Recommendation


Another one, if you're looking into stoicism ... one of the most well known stoics, Marcus Aurelius, his thoughts captured in Meditations (Gregory Hays translation is most popular and good).

And on an slightly unrelated note, the ever-popular "Atomic Habits" is practical, actionable, and quite an easy and good read.

I am also listening to Holiday's two well known books (audible) .. I'm not crazy about them but I am trying to give them a chance.

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josh View Post
Another one, if you're looking into stoicism ... one of the most well known stoics, Marcus Aurelius, his thoughts captured in Meditations (Gregory Hays translation is most popular and good).

And on an slightly unrelated note, the ever-popular "Atomic Habits" is practical, actionable, and quite an easy and good read.

I am also listening to Holiday's two well known books (audible) .. I'm not crazy about them but I am trying to give them a chance.

Nice! Ya, Meditations is next on my audible list, I've heard a few people talking about that one. Atomic Habits is one of the most practical books imo, I read it last summer and started implementing the tools.. I'm going to listen to Holiday's Stillness book soon too. I love working out my brain!

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planetkill View Post
Any recommendations for auction market theory and price action?

For AMT, I think the best place to start is with Kam's materials:
https://www.thetradingframework.com/videos

tip: if you join his mailing list you'll get some epic sale offers for his courses.

After you absorb and implement that you could join Convergent Trading and build on your knowledge with the members vids from FuturesTrader71.

re: price action, my stuff is largely from my years trading renko. You may want to ask others on that. You want to really understand "higher highs, higher lows, lower highs, lower lows", horizontal support/resistance, stop hunt identification and locations, impulse moves and continuations, price rejections..

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josh View Post
And on an slightly unrelated note, the ever-popular "Atomic Habits" is practical, actionable, and quite an easy and good read.

I agree.

From Atomic Habits (fair use):

Quoting 
All big things come from small beginnings [both good and bad]. The seed of every habit is a single tiny decision. But as that decision is repeated, a habit sprouts and grows stronger. Roots entrench themselves and branches grow. The task of breaking a bad habit is like uprooting a powerful oak within us, and the task of building a good habit is like cultivating a delicate flower one day at a time. But what determines whether we stick with a habit long enough to survive the plateau of latent potential and break through to the other side?

Little steps, every single day, over time, compound.

And I'm going to check out Holiday, but yes there is benefit to reading and periodically re-reading Atomic Habits. Life is hard for us all; it's harder for some than for others, but it is hard for all us. Such is what it is.

Cheers mate.

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planetkill View Post
Any recommendations for auction market theory and price action?

A few suggestions that I can recall, right off.
I'm actually a big fan of the Shull and Couling book. Some folks might find that crazy, but I think they are slightly more approachable than the rest.

Check the reviews, make your own decisions. If you don't want to spend a lot, buy the kindle versions for cheap. Or don't buy at all. Just my rough suggestions.

Edit....some folks treat the Shull book as a psych book, but imo it's really not a psych book in the same way Trading in the Zone is. I find that it incorporates auction market theory heavily, with some psych stuff added in.

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fivewhy View Post
A few suggestions that I can recall, right off.

There are so many books out there, you can drown in information. I have had Al Brook's books since around 2012 but they didn't help me become profitable because the info was way too complicated, poorly structured imo and for me personally, I don't learn visual things well by reading. Videos are way better for my learning process. I've watched Al Brooks' videos and I listed him as a mentor in this thread, however I wouldn't recommend that to people when there are other much simpler, more effective ways to learn. I think Dalton's book is in the same type of category, its just not highly relevant enough compared to Kam's materials. Kam is a master educator imo.

I've studied volume price analysis and for me it did not lead anywhere toward profitability and I barely look at volume on a horizontal basis anymore, its mostly all vertical (reading the footprint & profiles) except for noticing if r-vol is high or low compared to the average (relative volume on my 15 min zoomed out levels chart). So, for readers, I recommend you investigate others' suggestions but be choosey about picking info that really resonates for you and has high reviews.

ie: When I buy an important product I don't mind spending many hours researching it, reading reviews from others etc, that way I get the products most likely to be a great match. The other night I spent like 2 hours picking out an external keypad lol, but that's my new order entry baby and its an important element to my speed as a scalper.

Trading is a tricky business. Make sure the person you learn from is actually trading this year and at an expert level. Much of what worked 10 years ago doesn't work well today imo. I'm also biased as a short-term trader, and as a renko/price structure trader, I don't make any decisions based on candlesticks.

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TropicalTrader View Post
Videos are way better for my learning process.

. . .

Make sure the person you learn from is actually trading this year and at an expert level.

I generally agree with everything you've said. But I would draw a distinction between learning from those who trade presently and learning underlying concepts/theories about markets. The books I listed above are, I think, better for learning underlying concepts and not specific trading mechanics.

I like learning from videos, but I learn concepts/theories better when I read words on a page or screen. I recognize there is a difference between learning (e.g., to fight or to trade) by reading a book versus learning by actually doing/practicing the act (fighting or trading). Which goes to my point about learning underlying concepts/theories from reading while learning practical skills by doing.

Learning the practicals versus learning the theories.

I find that, if I am going to learn from someone else, I benefit from learning the underlying theory the person has to offer (whether the person presently trades or is retired). However, for me, the best way to learn the practical up-close-and-personal aspects of doing the deed (fighting or trading), it best for me to learn by doing it on my own. To me, there is a benefit from learning the underlying theory from others while learning the practical side from direct firsthand experience. Every week teaches me something.

To each his own.

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fivewhy View Post
However, for me, the best way to learn the practical up-close-and-personal aspects of doing the deed (fighting or trading), it best for me to learn by doing it on my own. To me, there is a benefit from learning the underlying theory from others while learning the practical side from direct firsthand experience. Every week teaches me something.

To each his own.

Yes, lots of firsthand experience is what's needed after one chooses the structures/principles he/she prefers. The trading simulator is super valuable as you can evaluate your ideas reasonably fast and train yourself (conscious + unconscious) to trade certain setups effectively. That's great you focus on learning new stuff each week..


(I use Sierra Charts which has a pretty good simulator although not so good for multi-timeframe approach. )

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TropicalTrader View Post
Yes, lots of firsthand experience is what's needed after one chooses the structures/principles he/she prefers. The trading simulator is super valuable as you can evaluate your ideas reasonably fast and train yourself (conscious + unconscious) to trade certain setups effectively. That's great you focus on learning new stuff each week..

Totally agreed. I think the only thing sim/paper trading is bad for is using it to try to work on psych issues; for me, if I do too much sim, it tends to induce bad habits bc I have no skin in the game. However, I do switch to sim whenever I am not feeling "up to par". It is very difficult, tho, to know when I'm not up to par, worn out, unhealthy.

Also want to say thanks for introducing me to the Obstacle is the Way book (one of your above posts). I've been listening to audiobooks of The Obstacle and Ego is the Enemy (by Holiday). Really solid stuff there. Thank you! These and Chimp Paradox should really be required reading.

Sidenote, I kinda wish there was a recommended reading list on this site (but not a thread or a poll) where users could up-vote their favorite books for each of an array of different categories.

@bobwest I'm tagging you to ask about setting up something like this. Apologies if that's not kosher. It'd have to be coded into the forum platform, which is asking a LOT. Basically, I'm asking for something like a wiki of "Recommended Books, Podcast Episodes, YouTube Videos, Forum Threads" broken down into categories (just one single page containing everything), where users could up vote the ones they think are worth checking out. For example, the books listed above would go into the Trader Psychology category. Other categories might include: Order Flow, Price Action, Coding, Automated Systems Development, Fundamentals, etc. Call it something like the "Recommended Resources" or "Curated Resources" section. Since it's the users up voting, it would not be an endorsement from FIO but from the users who voted for it. Add a giant disclaimer saying this is not an endorsement of any product. The value of this is seeing what people vote for, on the whole, bc as @TropicalTrader pointed out, there is a ton of info and anyone can get overwhelmed. Every six months or year, send an email asking for users to up vote what they like. Having an organized and curated list of resources might be nice. Maybe this isn't really doable but I think it could be nice for newer folks. I can't keep up with all the threads here and inevitably miss a lot. Again, apologies if this isn't kosher. And if this has already been thought about and decided against, just ignore me. Cheers!

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100% agree there would be great value in better organizing the gems in the forum. There's so much value in these forums, but it's unorganized and scattered through a decades long posting history. Everything you need is in here, just have to discover it. Discovery is the toughest part.

I'd go so far as to say that i am happy to pay a reasonable monthly fee for a curated, more easily organized version of this site. Like an elite+ membership
fivewhy View Post
Totally agreed. I think the only thing sim/paper trading is bad for is using it to try to work on psych issues; for me, if I do too much sim, it tends to induce bad habits bc I have no skin in the game. However, I do switch to sim whenever I am not feeling "up to par". It is very difficult, tho, to know when I'm not up to par, worn out, unhealthy.

Also want to say thanks for introducing me to the Obstacle is the Way book (one of your above posts). I've been listening to audiobooks of The Obstacle and Ego is the Enemy (by Holiday). Really solid stuff there. Thank you! These and Chimp Paradox should really be required reading.

Sidenote, I kinda wish there was a recommended reading list on this site (but not a thread or a poll) where users could up-vote their favorite books for each of an array of different categories.

@bobwest I'm tagging you to ask about setting up something like this. Apologies if that's not kosher. It'd have to be coded into the forum platform, which is asking a LOT. Basically, I'm asking for something like a wiki of "Recommended Books, Podcast Episodes, YouTube Videos, Forum Threads" broken down into categories (just one single page containing everything), where users could up vote the ones they think are worth checking out. For example, the books listed above would go into the Trader Psychology category. Other categories might include: Order Flow, Price Action, Coding, Automated Systems Development, Fundamentals, etc. Call it something like the "Recommended Resources" or "Curated Resources" section. Since it's the users up voting, it would not be an endorsement from FIO but from the users who voted for it. Add a giant disclaimer saying this is not an endorsement of any product. The value of this is seeing what people vote for, on the whole, bc as @TropicalTrader pointed out, there is a ton of info and anyone can get overwhelmed. Every six months or year, send an email asking for users to up vote what they like. Having an organized and curated list of resources might be nice. Maybe this isn't really doable but I think it could be nice for newer folks. I can't keep up with all the threads here and inevitably miss a lot. Again, apologies if this isn't kosher. And if this has already been thought about and decided against, just ignore me. Cheers!


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fivewhy View Post
Sidenote, I kinda wish there was a recommended reading list on this site (but not a thread or a poll) where users could up-vote their favorite books for each of an array of different categories.

@bobwest I'm tagging you to ask about setting up something like this. Apologies if that's not kosher. It'd have to be coded into the forum platform, which is asking a LOT. Basically, I'm asking for something like a wiki of "Recommended Books, Podcast Episodes, YouTube Videos, Forum Threads" broken down into categories (just one single page containing everything), where users could up vote the ones they think are worth checking out. For example, the books listed above would go into the Trader Psychology category. Other categories might include: Order Flow, Price Action, Coding, Automated Systems Development, Fundamentals, etc. Call it something like the "Recommended Resources" or "Curated Resources" section. Since it's the users up voting, it would not be an endorsement from FIO but from the users who voted for it. Add a giant disclaimer saying this is not an endorsement of any product. The value of this is seeing what people vote for, on the whole, bc as @TropicalTrader pointed out, there is a ton of info and anyone can get overwhelmed. Every six months or year, send an email asking for users to up vote what they like. Having an organized and curated list of resources might be nice. Maybe this isn't really doable but I think it could be nice for newer folks. I can't keep up with all the threads here and inevitably miss a lot. Again, apologies if this isn't kosher. And if this has already been thought about and decided against, just ignore me. Cheers!

My first thought is that this would probably be a large effort that likely most members would not put to use. But I'm not the one to say.

You could make a post in the changelog thread asking @Big Mike what he thought of it, because he would be the one to implement it. Please realize that the list of recognized important changes is long already and that embarking on any big project is a big lift.

Sorry, I'm not trying to rain on your parade, but if you want to propose it, the changelog thread is generally used for reporting issues and proposed changes, here:



Bob.

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bobwest View Post
My first thought is that this would probably be a large effort that likely most members would not put to use. But I'm not the one to say.

You could make a post in the changelog thread asking @Big Mike what he thought of it, because he would be the one to implement it. Please realize that the list of recognized important changes is long already and that embarking on any big project is a big lift.

Sorry, I'm not trying to rain on your parade, but if you want to propose it, the changelog thread is generally used for reporting issues and proposed changes, here:



Bob.

Thanks for responding! What you said was exactly what I was thinking would likely be the case. Totally understood.

And thanks for cluing me in on the changelog, didn't know about that.

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TropicalTrader Post #3 in this thread - thank you for posting your favourite trading mentors.

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Upgraded Order Entry - Fast & intuitive~





https://www.amazon.ca/gp/product/B07FFLNF5C/ref=ppx_yo_dt_b_asin_title_o06_s00?ie=UTF8&psc=1

I set it up like this:

0 = Flatten and Cancel
1-5 = Lot Size
. = brackets on/off
+ = buy
- = sell
= = move to breakeven


How To:

Global Settings > Customize Keyboard Shortcuts
(use the specific numpad keys)


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In 4 words, here's what separates those who will never make it from those who have a real shot:

RESPECT THE DEVELOPMENT PROCESS

If you're struggling, really think about that.. A lot of us get started in trading with the idea that we will be part of the minority of successful traders, we're going to make a lot of money and that it won't be too much of a grind. We may hear in forums from more experienced traders that its difficult but fail to appreciate the development process. (I love that term from Dr. Steenbarger)

I thought for sure within 2 years of working on this everyday, I would "get there". Perhaps if I would have started at an excellent prop firm where there was an excellent education program, that would have happened. I could not comprehend that it would be a really long slow grind. We live in a fast paced world and we want fast results, this is not a compatible mentality for mastering a craft..

If I would have come in with a mindset that I'd be working on my development process for at least a few years and not expecting to make consistent money until later - it would have been very helpful and changed my approach.

If you're reading this thread in psychology (not chasing indicators and new "systems") its likely you've had your a$$ handed to you at least a few times and some/all of your pride beaten out of you by the market.. My advice is to double-down on your development process and be prepared to go a long period of efforting. That realism and humility will serve you well and give you the shot you want.

In my experience there is one process for understanding markets (comprehensive narrative) and finding the edge that works for you - and there is another process for understanding yourself and how to get/stay in alignment. You need both to succeed at this game. Get serious that this is a marathon, if you can't stand a long grind to make your way to consistency, you're better off not wasting your precious time and resources. This is a dangerous game on many levels and not for the faint of heart. What you don't know (which is probably a lot more then you think) will hurt you..
(ps, I'm addressing the traders here who want to rise to the top, not those who are happy with 5-10% a year, trading to supplement their full-time job, etc)


I've been listening to this audiobook all day, loving it! Cheers to Robert Greene, so much wisdom in his books..


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I searched for this but no results.

There is a daytrading psychologist who's also a trader. His name is Dr. Kenneth Reid. He designed some quizzes. I took one for fun. According to him there are 5 trader types: warrior, agrarian, realist, artist, engineer. Some people favor one type or over another or have combos of types. I was a Super-Hybrid, supposedly very adaptable and favorable for trading. I am a struggling beginner, so I cannot confirm whether it's accurate or not

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Nolaughingmatter View Post
I searched for this but no results.

There is a daytrading psychologist who's also a trader. His name is Dr. Kenneth Reid. He designed some quizzes. I took one for fun. According to him there are 5 trader types: warrior, agrarian, realist, artist, engineer. Some people favor one type or over another or have combos of types. I was a Super-Hybrid, supposedly very adaptable and favorable for trading. I am a struggling beginner, so I cannot confirm whether it's accurate or not

Interesting, his website looks "extemely salesy", high price tags on the products and not offering much free materials. Where did you see the quiz?

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I have the audiobook and agree, it's a good one. I can't recall the names, but I have others of his as well that I found to satisfy my audio listening needs (a voice I like)

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Interesting, his website looks "extemely salesy", high price tags on the products and not offering much free materials. Where did you see the quiz?

https://aware-profile.daytradingpsychology.com/

You have to sign up for an account, but it's free to get the profile.

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Nolaughingmatter View Post
https://aware-profile.daytradingpsychology.com/

You have to sign up for an account, but it's free to get the profile.

Thankyou! I enjoyed this. Some of the questions were hard to answer so I just asked myself the question "which answer is more true or less true". I think looking at these archetypes is helpful and since its free, if you haven't taken it, take it!



I see Dr. Reid also offers a discounted monthly subscription for his Mastermind Pro video series after you complete the profile. I'm not interested in technical/strategy anymore but I'm open to advancing any and all new ideas on psychology as my mission is to keep getting better everyday. I'll post a review after I watch them..

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  #143 (permalink)
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Book Review:



This is now one of my favorite trading books of all time! This book was the result of a Sport Psychologist with 20 years of experience who worked with olympic athletes teaming up with an experienced trader. I heard in some interview that there was a prop firm in the UK who made it mandatory for each of their traders to own this book. Now I see why. Super practical, applicable and powerful. Highly Recommend.


PS, my upcoming webinar has been pushed forward a week until next thursday..

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Hi guys,

It is my pleasure to welcome @TropicalTrader for our 399th webinar event, on Thursday, August 27th @ 4:30 PM Eastern US.

The title for the event is "An Afternoon With futures io member TropicalTrader", and bullet points include:

- Our "Afternoon With" series asks real traders on futures io to share their experiences and the evolution of their trading, their mistakes, and what theyíve learned to become a better trader
- A look at the evolution of TropicalTrader's trading
- Current methodologies in-depth
- What has been learned?
- Q&A with members



Register for this event:
https://on.futures.io/1en1m

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Big Mike View Post
Hi guys,

It is my pleasure to welcome TropicalTrader for our 399th webinar event, on Thursday, August 27th @ 4:30 PM Eastern US.

Mike

Thanks Mike!

Here's what I have prepared. I won't be going too in depth into my methodology, it will be more of an overview on how I trade.


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Excellent webinar!

It sounds like you have really put in the work and are starting to reap the benefits. Congratulations, and best of luck moving forward!

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Excellent webinar!

It sounds like you have really put in the work and are starting to reap the benefits. Congratulations, and best of luck moving forward!

Thank you! I really appreciate your comment.

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Hello, I am curious to know when this will be made available in the trading webinars section?

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When will this be archived?

Persistence! Nothing in the world can take the place of persistence.
Talent will not ... nothing is more common than unsuccessful men with talent.
Genius will not ... Unrewarded genius is almost a proverb.
Education will not ... The world is full of educated derelicts.
Persistence and determination alone are omnipotent!
Calvin Coolidge
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Hello, I am curious to know when this will be made available in the trading webinars section?


Joseph Connors View Post
When will this be archived?

@tturner86

Hi Terry,

Do you know when the webinar section will be updated?

Thanks!

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Its taking a long time

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Its taking a long time

I wouldn't be surprised if someone was on vacation right now..

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holiday week end

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@tturner86

Hi Terry,

Do you know when the webinar section will be updated?

Thanks!

@Big Mike will post as soon as he can. I apologize for the delay.

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It would be awesome to watch it!!

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This is a great thread - thank you for your contributions!

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I wouldn't be surprised if someone was on vacation right now..

Sorry @Big Mike will be posting this shortly.

He will post soon explaining his situation in his thread and I have posted in mine about the wildfires. 2020 is wild. Hope you have been doing well.

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Hi guys,

Delay explained here:



I'll do my best to get it done soon.

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Sorry @Big Mike will be posting this shortly.

He will post soon explaining his situation in his thread and I have posted in mine about the wildfires. 2020 is wild. Hope you have been doing well.


Big Mike View Post
Hi guys,

Delay explained here:



I'll do my best to get it done soon.

Hi @Big Mike , sorry to hear that you've been in pain and not getting good sleep. I hope that your new protocol works well and you can get back to enjoying life soon.

Hi Terry ( @tturner86), good to hear you're staying safe with all the intensity in your area, those were really devastating fires plus all the crazy rioting, etc.

Many thanks to both of you for all your huge time contributions in making this the best trading forum!

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Hey guys, lately I've been playing some online poker in the evenings and listening to some books on poker mindset/psychology. I think there's a lot of valuable materials that can be helpful for trading. I find the crossover info very helpful. I've noticed that my mindset in poker has improved a ton since the last time I was playing about a year ago due to all the work I've been doing on trading psychology.

One excellent book that I recommend is The Poker Mindset: Essential Attitudes for Success



I'm going to share some parts that I think are really valuable for traders..

4 Stages of Poker Mindset:

1. Anger
2. Frustration
3. Acceptance
4. Indifference

Stage 1. Anger - losses are thought about in terms of losing "things", ex: losing $50, that's a nice meal for 2 at a restaurant. Losing $300, that's a car payment. Losing $2500, thats a vacation. Players who tend to tilt (lose their cool) with anger can experience "full-on crazy monkey tilt". These are the stories about people chucking their monitors across the room, beating the crap out of their keyboards, etc. A complete loss of control and sanity. Have you been there? I have, I didnt break anything but definitely wanted to..

Stage 2. Frustration - at this level players know that this is a long-term game but haven't fully accepted it yet. They may not experience full on rage (maybe occasionally after an unexpected large loss or series of losses), but they tilt (play suboptimally) because of frustration. For one person this might look like taking "C trades" or trading for a much longer time then usual to try and get the money back. For another person this might be doubling down. For another person this might be getting scared and not taking the next "A trade", watching it hit its target and then feeling even more frustrated, beating themselves up etc.

Stage 3. Acceptance - This player accepts the realities of good luck/bad luck and *variance (*unexpected events occurring, ex: 7 losses in a row, multiple losing days). This player has the longer term perspective and rarely tilts anymore. They have a proper bankroll and utilize solid money management. The person still feels pleased after wins and unhappy after losses, however they don't alter their play/strategy based on plus points and minus points. This player is committed to getting better and learning from their mistakes.

Stage 4. Indifference - This player experiences no anguish from losses. They are extremely confident in their abilities in relation to the game. They focus entirely on learning from every experience and extracting all the knowledge-value possible. To a Stage 4 player, the long term is all that matters. To them, making the right decisions = winning and making mistakes = losing, outcomes do not matter. (For Stage 4 poker players, I think of: Phil Ivey, Eric Seidel & Daniel Negreanu)
--------------------------------------------------------------------------------------------------------------

For my journey, I'd say that right now I'm in Stage 3 and sometimes drop down to Stage 2, but not for long..

Some questions that Stage 3/4 players ask are:

Did I play correctly?
Is there something I could have done better?
Were any decision made from ego/emotions?
Is there something new I can learn from that play/trade ?

2 Ways To Lose:

1st - bad play, made a mistake, didnt follow plan/rules, missed something
2nd - variance, played properly, wouldnt change a thing, next!

2 Ego Traps:
Entitlement - thinking that you deserved to win, "that should have been mine"
Directed Anger - "F this broker, those algos, these high commissions, etc"

Another key term in the book is "desensitizing yourself to money". I've noticed that this has happened for me over the years. There have been many heartbreaks and large losses. I see this as part of "paying my dues" and understand that all the trials & tribulations are but stepping stones on my journey which make me stronger and more confident in my abilities.

Sending good vibes out to everyone, I know these are very challenging times. Remember to take time & care to stay healthy mentally and physically.

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Webinar recording (sincere apologies on the delay, you can read my journal thread for reasons why):



Please give us feedback and comments:

If you liked it, click here and share your feedback:
https://futures.io/email-feedback.php?title=270&liked=1

If you didn't like it, click here and share your feedback:
https://futures.io/email-feedback.php?title=270&liked=-1

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Big Mike View Post
Please give us feedback and comments:

I thought the webinar was excellent. Thank you TropicalTrader/Big Mike/Terry. There is a lot that can be expanded on but I want to mention something from your previous post where you talked about transitioning from frustration to acceptance. This can be a challenging and confusing process because exactly how does one attain acceptance?

Dr Steenbarger describes exactly how to accomplish this in his book the daily trading coach, lesson 27 : Build emotional resilience.

My paraphrased version:
I never understood this concept but bear with me. Going into drawdown is one of the greatest opportunities you can experience. When you have the ability to bounce back from a trading slump and back into profit, it is accompanied by the most amazing sense of accomplishment and achievement. When you can repeat this process on a smaller scale you will naturally build the confidence in yourself that any particular drawdown does not matter because you have the belief that you can pull yourself out of it.

The trick when you are tilting is to not over indulge your negative spiral. You have to have the discipline to take it on the chin and walk away....contain the damage. You will make it a lot easier for your future self to pull the situation out of the hole when the damage is kept to a minimum.

Its all part of the cycle of heroes journey (google Joesph Campbell). Its a core narrative of the human condition which plays out in movies, culture, everything including trading.
-The call to adventure
-crossing from the known into the unknown
-Your challenge
-Death and rebirth
-Transformation (like the phoenix or something)
-Atonement
-Your return as a new stronger person

Trading gives you the opportunity to transform. See the drawdown as your test and part of your journey. That, I believe, is how you go from frustration to acceptance.

Good luck

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Grantx View Post

The trick when you are tilting is to not over indulge your negative spiral. You have to have the discipline to take it on the chin and walk away....contain the damage. You will make it a lot easier for your future self to pull the situation out of the hole when the damage is kept to a minimum.

Its all part of the cycle of heroes journey (google Joseph Campbell). Its a core narrative of the human condition which plays out in movies, culture, everything including trading.
-The call to adventure
-crossing from the known into the unknown
-Your challenge
-Death and rebirth
-Transformation (like the phoenix or something)
-Atonement
-Your return as a new stronger person

Trading gives you the opportunity to transform. See the drawdown as your test and part of your journey. That, I believe, is how you go from frustration to acceptance.

Good luck

Thanks @Grantx ! I really like what you shared.

This week I'm listening to The Mental Game of Poker by Jared Tendler. It's an epic book. One of his unique concepts is the idea of Inchworm - I think this ties in beautifully. The gist is that for an inchworm to move, it has to plant its rear and then push forward, then pull up its rear a bit closer to the front, plant it and move forward.




The left side is our worst game, the right side is our best game. If we dont' make our worst game better then we don't get the forward momentum. This was my mistake for the longest time. My best game kept getting better, but my worst didn't. It was like an anchor drowning me..

As our worst gets better we are able to contain the damage like you mentioned.. As we manage to inch forward, with higher highs and higher lows, we move into a new territory!

Something else I've been thinking of lately is this idea that "how you do one thing is how you do everything". I don't think that applies "across the board to every little thing" but its definitely worth thinking about. Many of the mistakes I was making in poker were also showing up in my trading. Ex: entering a trade/bet without great cards/setup due to boredom or wanting to make things happen. Or getting frustrated after a few losses and making suboptimal decisions..

Cultivating patience in trading and poker also makes me less prone to getting frustrated while driving or dealing with challenging people..

I remember Dr. Steenbarger saying "find out what sets you off". In The Mental Game of Poker, Jared goes into great detail on the different types of tilt and why they happen, I highly recommend..

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I remember Dr. Steenbarger saying "find out what sets you off". In The Mental Game of Poker, Jared goes into great detail on the different types of tilt and why they happen, I highly recommend..


I came from a poker background before trading myself, always a fan of Jared. His interview on Chat With Traders is great also. Im sure you've listened to it, I heard you reference Chat with Traders in the webinar, but for anyone else who hasn't, def. worth checking out.

I also use a lot of poker analogies mentally to help keep me on track with trading. Bank roll management, waiting for premium hands (ie great set ups), getting out of hands where the odds aren't on my side after the flop/turn/river (ie cutting loses quick), etc.

Enjoyed the webinar, thanks for doing that!

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@TropicalTrader Ive read the mental game of Poker thanks to you. One of the best books I have ever read.
Her is my personal profile which I look at every single day:



Something I am working on improving is my development of expectations and goals. I think it is very important to distinguish between the two (Chapter 6: Goals). For the logest time I refused to set financial goals because of the belief that the market is totally random and therefore I have no control of the outcome of my performance. But he explains the fallacy of this approach and goes on to say that when you think its bad to set results oriented goals you are really attempting to avoid failure whether you are conscious of that decision or not.

But really great stuff man. I like the way you think. I hope you continue to post more of your thoughts and ideas. Would you mind sharing the PDF or powerpoint that you used in the webinar?

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Grantx View Post

...But really great stuff man. I like the way you think. I hope you continue to post more of your thoughts and ideas. Would you mind sharing the PDF or powerpoint that you used in the webinar?

@Grantx Nice work on your profile and learning model! This week I've started listening to The Mental Game of Poker 2, have you read that one yet? He says that the first book was mostly relevant to the rear side of the inchworm and the second book is geared toward the front side..

Here is the pdf of my presentation https://cdn.shopify.com/s/files/1/0598/6757/files/TropicalTrader-presentation2020.pdf

Something else I thought of after listening to some of book 2 - making a profile more like a volume profile. In that middle 68%, what is the bulk of the "b-game/mid-range actions" I'm performing, ex: watching the action, breathing deep, making trades, reminding myself things, etc - on the left side is when I make suboptimal decisions due to anger related tilt - on the right side is when I get very quick flashes of intuition that help me make the best decisions (ex: not trading one of my favourite setups which normally I would take). Nerding out on the things I do when I'm at the very top of my game, those days when I'm "crushing it".. Video recording your sessions plus making text notes on your charts is powerful, you can review what your thoughts were and how they impacted your decisions.. I journal my trading thoughts right on my main chart, constantly updating them as I go..

The financial goals part is interesting, I'm not focused on that at this point in my journey. My goals have to do with managing my state effectively and making excellent decisions, plus not making bad decisions & losing my trader state. At some point down the road Ill be more open to setting the financial goals.

I like how you listed simple approach. I feel this is really important especially with the higher volatility. Having a lot of things to process and very little time to do it can often lead to mistakes or tilting. This month I've tweaked a few things including getting rid of bookmap and merging my footprint charts with my renko charts. I've had to make some adjustments for the higher volatility.

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This is one of my new best practices, expressing trade ideas on the screen. Complete with opposite scenario. I find this is helpful for me to let go easier and stay focused when I don't get the win..


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FT71 POSTED SOME EXCELLENT ADVICE TODAY



This one... wow. Very relevant.

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So that completes the example of how I jot my trade ideas, doing my best to not get a "bad bias" aka locked in scenario and to prepare for adversity so its not a suprise/shock when the trade *loses.


If you videorecord your sessions with these types of notes and then watch it later (3x speed or skim) its an effective way to improve your skills.

*I usually only say profit or expense but I've been playing a lot of poker lately. Right now in my journey I'm using it as a healthy tactic for gaining deeper acceptance of the plus and minus part of "the game".

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Thanks for all your insight

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Hey @TropicalTrader
Since you have recommended books that have become some of my all-time favourites, here is one I think you might enjoy. I purchased it today and so far cannot put it down. David Eagleman is a neuroscientist and has created some really interesting videos which you can find on youtube if you are at all interested.


Enjoy.


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Grantx View Post
Hey @TropicalTrader
Since you have recommended books that have become some of my all-time favourites, here is one I think you might enjoy. I purchased it today and so far cannot put it down. David Eagleman is a neuroscientist and has created some really interesting videos which you can find on youtube if you are at all interested.


Enjoy.


Thanks @Grantx ! I'll be listening to it soon!

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  #174 (permalink)
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Today I was listening to The Miracle of Self Discipline by Brian Tracy. One great concept is his "law of 3". Here's how it works. Ask yourself: What is the #1 most beneficial task you could do that would benefit your trading? write it down. Now ask, What would be the second most beneficial thing I could do to improve my trading? write it down. And one last time, what is the third most beneficial thing I could to improve as a trader?

Now, focus on those 3, put those hours in. Right now it's just after midnight pst, on a saturday night, what am I doing? Trading on the simulator.. Usually I would be hanging out with friends, but tonight I'm getting in some quality me time.

Here's my current 3:

1. At least an hour in the eves trading on the simulator at 2x or 3x speed.
2. Watching my charts on the simulator at 10x for 30 minutes, not trading, just watch.
3. Create a video playbook with my best trades on different types of days to watch regularly.



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  #175 (permalink)
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I will take a look at that book thanks

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  #176 (permalink)
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Many people overestimate psychology in trading.
This is because a signal to buy or sell is always noise and subjective.
You think you have a lack of discipline because you again not take you profit and leave money on a table?
Or because you again take a huge stop loss? Or maybe you again hesistate and don't take your perfect A+ setup?
Or maybe you overtrade again?
This is not due a lack of discipline or psychology, this is because your trading system is not formalized precisely.
And you can't find a reliable signal.

I can give you an example.

I have seen a group of traders how detected a huge market participant. They detected them using order flow and footprint.
This market participant, probably, worked at a bank. He buy a EUR on his own money, then, he uses a huge funds from bank(client's money) and push the price for a few ticks. So he was in profit for his own money. He do it on the same time during trading session. And the group of traders participate with him on this move. Then he realised this and changed slightly his tactics. But the group again deciphered it.))))

I have seen a trader, who gaze at order book, record videos, then review and find algos and market participants. This is a very objective and formalized signal
But algos usually short-lived.

Man, when you see such precisely setups, will you hesistate? Will you have a psychology issues?


P.S.
The group of traders was in Russian Market. And it was a currency section of Moscow Exchange.
The trader with algos - look at them in cryptocurrency. They use a special scalp tool to trade crypto - similar to QScalp or Jigsaw.

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  #177 (permalink)
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Thanks for your post, see my comments in blue


peroksid View Post

Many people overestimate psychology in trading. My experience is the opposite


This is because a signal to buy or sell is always noise and subjective.

There is always some noise and subjectivity but there can be clear repeating tendencies.

You think you have a lack of discipline because you again not take you profit and leave money on a table?
Or because you again take a huge stop loss? Or maybe you again hesistate and don't take your perfect A+ setup?
Or maybe you overtrade again?

YES

This is not due a lack of discipline or psychology, this is because your trading system is not formalized precisely.
And you can't find a reliable signal.

I think this is a psychological issue, trading with real money but without being confident in your edge.

I can give you an example.

I have seen a group of traders how detected a huge market participant. They detected them using order flow and footprint.
This market participant, probably, worked at a bank. He buy a EUR on his own money, then, he uses a huge funds from bank(client's money) and push the price for a few ticks. So he was in profit for his own money. He do it on the same time during trading session. And the group of traders participate with him on this move. Then he realised this and changed slightly his tactics. But the group again deciphered it.))))

?? this is a murky example imo

I have seen a trader, who gaze at order book, record videos, then review and find algos and market participants. This is a very objective and formalized signal
But algos usually short-lived.

not very objective imo, its a very short-term move, now you're competing with thousands of algos who process info 1000x faster then you

Man, when you see such precisely setups, will you hesistate? Will you have a psychology issues?

I don't think those are precise setups personally

P.S.
The group of traders was in Russian Market. And it was a currency section of Moscow Exchange.
The trader with algos - look at them in cryptocurrency. They use a special scalp tool to trade crypto - similar to QScalp or Jigsaw.

I use bookmap but I don't base my entries on it. Sometimes I use it for getting out of a trade as its running in the desired direction. I also watch to see where the strongest liquidity levels are that have been there for a long time and how price reacts to it when it hits the levels. Personally I would only use it with high liquidity markets like ES or Eurostoxx,, I'm definitely not an expert with it though, that's just from my personal experience.

Imo, if you want to understand the market on a deeper level and get beyond the noise, learn Auction Market Theory..

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  #178 (permalink)
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TropicalTrader View Post
Thanks for your post, see my comments in blue

I have seen a trader, who gaze at order book, record videos, then review and find algos and market participants. This is a very objective and formalized signal
But algos usually short-lived.

not very objective imo, its a very short-term move, now you're competing with thousands of algos who process info 1000x faster then you

Here is a link with example of such kind of algo.
There was a 2 big sell orders - 80K and 40k on the offer. They moved every 5 minutes and 12 seconds below, if nobody hit them. Finally they got filled.
This was repeated several times for a week.
I mean each time the same 2 big orders 80K and 40K appears again and again and do the same.

If you have managed to detect this. You can open a short position with it.
1. you know exactly how it works(moved every 5m12s)
2. you know that it is a real size, so you can close your short position when buyers hit 75 % of that 80k big order. So you have a solid stop loss.
3. you know that if buyers hit it all or it is suddenly dissapear - you must close your position.
There is no any psychology issues with it.
You have a solid reason to open position(algo appears and start to work) and you have a solid reason to close your position(algos end or removed or filled)
There is no any hope about - maybe it can go or no go. Maybe I should stay in a trade little more. Maybe I should give it a room , etc.



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peroksid View Post
Here is a link with example of such kind of algo.
There was a 2 big sell orders - 80K and 40k on the offer. They moved every 5 minutes and 12 seconds below, if nobody hit them. Finally they got filled.
This was repeated several times for a week.
I mean each time the same 2 big orders 80K and 40K appears again and again and do the same.

If you have managed to detect this. You can open a short position with it.
1. you know exactly how it works(moved every 5m12s)
2. you know that it is a real size, so you can close your short position when buyers hit 75 % of that 80k big order. So you have a solid stop loss.
3. you know that if buyers hit it all or it is suddenly dissapear - you must close your position.
There is no any psychology issues with it.
You have a solid reason to open position(algo appears and start to work) and you have a solid reason to close your position(algos end or removed or filled)
There is no any hope about - maybe it can go or no go. Maybe I should stay in a trade little more. Maybe I should give it a room , etc.



Interesting... on my laptop right now away from my trading terminal so can't see it properly. If you have a great edge, enjoy it while it lasts (which probably wont be very long).

I'm not so interested in short term edges because I see trading as a life-long marathon. The work I've done on my psychology has changed everything for me including how I view trading in general, how I approach markets, how I view my role as a trader, etc. I've found (thanks FuturesTrader71) and created (my renko/indicator setups) a repeatable structure that I can use each day and over each longer period, ex: 50-100 days, see the positive results of my edge, without getting too caught up emotionally in the day to day ups and downs - or blowing up my account or a large portion of it along the way. That's the holy grail for me..

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  #180 (permalink)
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TropicalTrader View Post
Interesting... on my laptop right now away from my trading terminal so can't see it properly. If you have a great edge, enjoy it while it lasts (which probably wont be very long).

I'm not so interested in short term edges because I see trading as a life-long marathon. The work I've done on my psychology has changed everything for me including how I view trading in general, how I approach markets, how I view my role as a trader, etc. I've found (thanks FuturesTrader71) and created (my renko/indicator setups) a repeatable structure that I can use each day and over each longer period, ex: 50-100 days, see the positive results of my edge, without getting too caught up emotionally in the day to day ups and downs - or blowing up my account or a large portion of it along the way. That's the holy grail for me..

Well said, find what works for you. For me it is algo trading. I could never stare at a screen and trade actively. Not for me.

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jburke75 View Post
Well said, find what works for you. For me it is algo trading. I could never stare at a screen and trade actively. Not for me.

Well, if you spend a couple years on that, and don't find an edge, just know that the style I trade (FT71 inspired) could be implemented in the first 2 hours of the NY session (when avg 60% of the RTH session volume takes place) and then you'd have the rest of the day free to do what you like.

Just saying because I spent a couple years creating automated systems and testing them. Each time I put them on a live demo for a few months the backtested results did not hold true.. Not that its impossible, its just a very challenging field, you're literally up against the brightest minds. This year, some of the most remarkable quant firms like Renaissance did very crappy. Meanwhile FT has been trading his same method for 15 years.. Food for thought..

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TropicalTrader View Post
Well, if you spend a couple years on that, and don't find an edge, just know that the style I trade (FT71 inspired) could be implemented in the first 2 hours of the NY session (when avg 60% of the RTH session volume takes place) and then you'd have the rest of the day free to do what you like.

Just saying because I spent a couple years creating automated systems and testing them. Each time I put them on a live demo for a few months the backtested results did not hold true.. Not that its impossible, its just a very challenging field, you're literally up against the brightest minds. This year, some of the most remarkable quant firms like Renaissance did very crappy. Meanwhile FT has been trading his same method for 15 years.. Food for thought..

is this strategy automated or are you watching the screen for those two hours placing trades?

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jburke75 View Post
Well said, find what works for you. For me it is algo trading. I could never stare at a screen and trade actively. Not for me.

And I couldn't trade any other way.

Just running a program that traded for me would drive me bonkers. I would be wanting to grab the controls and do it myself.

Just shows that everyone is different, and there's something for everyone.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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bobwest View Post
And I couldn't trade any other way.

Just running a program that traded for me would drive me bonkers. I would be wanting to grab the controls and do it myself.

Just shows that everyone is different, and there's something for everyone.

Bob.

And..... that IS the reason we have doctors, lawyers, engineers, plumbers, fashion designers, computer technicians, bank managers, pilots, actors, contractors and so on with different mindset and mentality with different interests in life.

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  #185 (permalink)
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I wish I could have the computer trade for me but I would never be able to trust it

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I find it much easier to trust a proven strategy that has worked in the past than my own intuition that changes from day to day. Especially once in a trade when the emotions run high. That being said I see how some might do very well following a trading plan each and every day. I just know I can easily throw out my plan and start over trading. A systems approach helps my psychology of trading immensely.


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  #187 (permalink)
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jburke75 View Post
is this strategy automated or are you watching the screen for those two hours placing trades?

I don't use automated strategies. I usually trade in the first 3-4 hours of the RTH session (starts at 6:30 PST, 9:30 EST) and then take a break and come back for the last 90 minutes or so.


jburke75 View Post
I find it much easier to trust a proven strategy that has worked in the past than my own intuition that changes from day to day. Especially once in a trade when the emotions run high. That being said I see how some might do very well following a trading plan each and every day. I just know I can easily throw out my plan and start over trading. A systems approach helps my psychology of trading immensely.

It's quite difficult imo to find what you are looking for because the market is constantly changing, so many different types of days, high volatility, low, medium, or low for most the session and then high at the end like on Friday. If your strategy stays the same it will have periods of negative variance. Like the last couple months the volatility is massive while a few years ago it was tiny. So this means you will have to adjust your strategy and now you're meddling with it. Or what happens when your strategy loses 10x in a row and you have it on a live account? Are you going to go back to the drawing board or let it play out? What if after 100 trades its breakeven minus all the commissions?

An older version of me thought the same way you are because I didn't have the discipline. Now I do. It's been a battle and its taken years but you could do it faster by doing a serious cost/benefit analysis. What is costing you to not have discipline? Your confidence, your ability to create an income as a trader, having to do dayjobs, etc.. You might want to start taking it a lot more seriously sooner... I wish I had..

1 great technique I discovered is that if you get a futures account with a great broker like Edgeclear (FT71's brokerage) and use the Rithmic data feed, you can have your account freeze if you hit a certain loss limit in a day, example 2%.. That way your bad days are limited and you wont blow up your account in a day. This type of forced discipline was a great step for getting my monkey in check.. That along with dropping the need to make money fast and focus on retraining your brain to run a marathon instead of a sprint can go a long way. Discpline is a huge factor in confidence which is the way to manage the fear which makes you veer off course..

Last thing I want to say is that Dr. Andrew Menaker made a comment in a talk that its very difficult for us humans to trade a defined setup over and over like a robot, because there are times when we don't have a good feeling about it, or there is conflicting information. That's why having a process of questions that you ask is very powerful. Its the same in Poker, you can't play the same way every time you get certain cards, maybe you get pocket kings and then an ace comes on the flop with 4 people betting and raising before you, still like those kings?

With that being said, it is possible. I have 1 setup I discovered which I could potentially automate that could be long-term profitable if I adjusted the renko bricks for the volatilty every day or 2.. However I have a much higher hit rate with it when I look at the context, is there anything in the way of this trade? if its a long signal, is there a nice target higher? etc..

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  #188 (permalink)
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While I agree with most of the discussion, I would like to explore the other side of the automation and why most people do not do it. Dr. Andrew Menaker is right, it is very difficult for us humans to trade a defined setup over and over like a robot. Why would you not like do automate it, if you have a profitable trading strategy? I can think of few reasons.

The bitter truth is, most traders continuously deviate from their own trading strategy. They might not do it day-to-day basis, but enough to variation to kick in. So while back-testing would wield negative results, by changing the entry/exit parameters, they deviate from their strategy. And vice versa.
Curve fitting and unrealistic fills are also big problem. Everyone can tweak their automation parameters enough to get a ideal strategy for past x month.

I started learning about automation and back-testing when one of my trading buddies pointed out to me that most people who do price action or order flow trading can not verify that they are trading the same strategy they are teaching you. They almost always at some point deviate from their own rules and therefore is no real structure to their trades. Sometimes they trade the X setup, sometimes they don't. There is no objective way to test out the strategies. Most losing trades are subjectively dismantled and analyzed after the trade without a real objectivity to it.

I think this has been the biggest struggle to me as a trader. How do I know if my strategy is profitable?
This is the main reason I took up coding and started back/forward-testing. This is also the reason why I have seen so many of my strategies fail. While I might be novice in coding, at least I can now read code I paid for, understand the structure and I am able to change/optimize the code in the future.

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  #189 (permalink)
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Kuuluud View Post
While I agree with most of the discussion, I would like to explore the other side of the automation and why most people do not do it. Dr. Andrew Menaker is right, it is very difficult for us humans to trade a defined setup over and over like a robot. Why would you not like do automate it, if you have a profitable trading strategy? I can think of few reasons.

The bitter truth is, most traders continuously deviate from their own trading strategy. They might not do it day-to-day basis, but enough to variation to kick in. So while back-testing would wield negative results, by changing the entry/exit parameters, they deviate from their strategy. And vice versa.
Curve fitting and unrealistic fills are also big problem. Everyone can tweak their automation parameters enough to get a ideal strategy for past x month.

I started learning about automation and back-testing when one of my trading buddies pointed out to me that most people who do price action or order flow trading can not verify that they are trading the same strategy they are teaching you. They almost always at some point deviate from their own rules and therefore is no real structure to their trades. Sometimes they trade the X setup, sometimes they don't. There is no objective way to test out the strategies. Most losing trades are subjectively dismantled and analyzed after the trade without a real objectivity to it.

I think this has been the biggest struggle to me as a trader. How do I know if my strategy is profitable?
This is the main reason I took up coding and started back/forward-testing. This is also the reason why I have seen so many of my strategies fail. While I might be novice in coding, at least I can now read code I paid for, understand the structure and I am able to change/optimize the code in the future.

It might not sit well with others, but I'd claim that things like 'strategy' and 'setup' don't belong with discretionary trading at all which is at its core about listening to the market and adapting to it, rather than thrusting your beliefs (even in statistical disguise) on it. Just my humble opinion.

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Kuuluud View Post
.

I think this has been the biggest struggle to me as a trader. How do I know if my strategy is profitable?
This is the main reason I took up coding and started back/forward-testing. This is also the reason why I have seen so many of my strategies fail. While I might be novice in coding, at least I can now read code I paid for, understand the structure and I am able to change/optimize the code in the future.

Forward testing.. Let it run for 200 trades live on Sim. Then subtract 1 tick from each trade to account for possible slippage. That should give you a good idea how your automated system is doing.. If it needs to be adjusted based on volatility find a math based way to do that, example 5 day average daily range. Run it during specific time periods when you think it will be most effective.

---

For those trading manually, make a spreadsheet and log every single trade. My columns look like this: (going horizontalally but easier to share like this)

Long or Short
Trade Idea
Result (in points)
Type (1 good trade, good result, 2 good trade bad result, 3 bad trade bad result, 4 bad trade, good result **bad trade = missed key info, impulsive, didnt wait for a proper retrace, forgot something, etc)
Tilt Free (yes or no, was there negative emotion involved)
Did as Planned (yes or no according to the trade idea)
Entry Rating (1-10)
Exit Rating (1-10)
Open Positions (how many lots open at one time)
Total Lots (from open of that trade idea to its close, how many lots)
Comments/Mistakes

By logging your manual trades, you can be objective about your performance. You can do this right after the trade closes or while you're waiting for it to play out.

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speck View Post
It might not sit well with others, but I'd claim that things like 'strategy' and 'setup' don't belong with discretionary trading at all which is at its core about listening to the market and adapting to it, rather than thrusting your beliefs (even in statistical disguise) on it. Just my humble opinion.

I like knowing what my entry setups are in advance and then deploying them discretionally based on the adapting market and the framework I use to decide what its up to and what opportuniites seem to offer a higher probability of a trade setup working. Without any predefined setups or trade plans (ex: if/when it gets to this level and shows weakness I will fade it with a X point stoploss looking for targets A, B, C etc), most traders monkeys will take over the trading imo unless they have a ton of experience and success and are in the unconscious competence zone.

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TropicalTrader View Post
I like knowing what my entry setups are in advance and then deploying them discretionally based on the adapting market and the framework I use to decide what its up to and what opportuniites seem to offer a higher probability of a trade setup working. Without any predefined setups or trade plans (ex: if/when it gets to this level and shows weakness I will fade it with a X point stoploss looking for targets A, B, C etc), most traders monkeys will take over the trading imo unless they have a ton of experience and success and are in the unconscious competence zone.

From what I see, your definition of a 'setup' is nothing more than higher timeframe context + trade location + appropriate entry conditions. Not to confuse with fully quantifiable setups in automated trading.

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speck View Post
From what I see, your definition of a 'setup' is nothing more than higher timeframe context + trade location + appropriate entry conditions. Not to confuse with fully quantifiable setups in automated trading.

Not Exactly..

More like: perceiving this sessions action according to a specific narrative, context and sequence of events including opening range, initial balance, developing volume profile, price action behaviour (choppy or directional), market's behaviour in contrast to the overnight session and the following RTH session, size of rotations.

This helps determine whether the action was locals or "other time frame" (large market participant) at key areas of the day which expands the narrative for determining directional bias and seeing which price levels are likely to be opportunity points.

NEXT: look for renko patterns I like to trade and determine whether the area and direction is a good fit with the narrative I'm viewing.

NEXT: look at footprint and bookmap to finetune entry

NEXT: determine what the risk/reward would be like based on where I think a smart place to put my stop would be.

If that all fits my criteria, I open trade, set stops, manage effectively, record and rate trade, rinse and repeat.

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TropicalTrader View Post
Not Exactly..

More like: perceiving this sessions action according to a specific narrative, context and sequence of events including opening range, initial balance, developing volume profile, price action behaviour (choppy or directional), market's behaviour in contrast to the overnight session and the following RTH session, size of rotations.

This helps determine whether the action was locals or "other time frame" (large market participant) at key areas of the day which expands the narrative for determining directional bias and seeing which price levels are likely to be opportunity points.

NEXT: look for renko patterns I like to trade and determine whether the area and direction is a good fit with the narrative I'm viewing.

NEXT: look at footprint and bookmap to finetune entry

NEXT: determine what the risk/reward would be like based on where I think a smart place to put my stop would be.

If that all fits my criteria, I open trade, set stops, manage effectively, record and rate trade, rinse and repeat.


Well, now you've expanded your definition of 'setup' even further, completely beyond any quantitative parameters
That was precisely the point in my first post.

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  #195 (permalink)
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TropicalTrader View Post
Not Exactly..

More like: perceiving this sessions action according to a specific narrative, context and sequence of events including opening range, initial balance, developing volume profile, price action behaviour (choppy or directional), market's behaviour in contrast to the overnight session and the following RTH session, size of rotations.

This helps determine whether the action was locals or "other time frame" (large market participant) at key areas of the day which expands the narrative for determining directional bias and seeing which price levels are likely to be opportunity points.

NEXT: look for renko patterns I like to trade and determine whether the area and direction is a good fit with the narrative I'm viewing.

NEXT: look at footprint and bookmap to finetune entry

NEXT: determine what the risk/reward would be like based on where I think a smart place to put my stop would be.

If that all fits my criteria, I open trade, set stops, manage effectively, record and rate trade, rinse and repeat.



The only thing that matters in the end is are you getting the results from your trading that you want. I am achieving that finally after floundering for years in discretionary trading. I like systems trading because I can literally trade every market if I wanted to. With discretionary I would be limited to trading just a few because I can only devote so much attention to it.

If itís working for you keep doing it!

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TropicalTrader View Post

For those trading manually, make a spreadsheet and log every single trade. My columns look like this: (going horizontalally but easier to share like this)

Long or Short
Trade Idea
Result (in points)
Type (1 good trade, good result, 2 good trade bad result, 3 bad trade bad result, 4 bad trade, good result **bad trade = missed key info, impulsive, didnt wait for a proper retrace, forgot something, etc)
Tilt Free (yes or no, was there negative emotion involved)
Did as Planned (yes or no according to the trade idea)
Entry Rating (1-10)
Exit Rating (1-10)
Open Positions (how many lots open at one time)
Total Lots (from open of that trade idea to its close, how many lots)
Comments/Mistakes

By logging your manual trades, you can be objective about your performance. You can do this right after the trade closes or while you're waiting for it to play out.

After watching one of the FT71 vids from 5 years ago I saw he was keeping track of TSB (time standing by) for his prop traders. This gave him an indication of whether they were waiting patiently for a setup or trading reactively. That was the first time I'd heard of this and have updated my trade log with 2 columns:

Time In
Time Out

For me the Time In marks the beginning of a new trade idea, and Time Out is when I'm completely done with that trade.

So lets say I get into a new trade idea with 2 lots, and then scale one, then it retraces and I add one, then I scale again, then take profit on the trade and am flat, that marks the Time Out.

Some traders who are using a professional approach may find this very useful.

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Thank you for this thread, lots of great valuable nuggets from the passionate journeyman
With your permission, i'm dropping a few notes that have helped me in my journey.
godspeed everyone


Mark Douglas classic / "all change is a function of desire" and clear intent!



be ready


conditions


goals


routine


to remember


technical trading

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Market Wizard
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Professional traders:

- Manage risk
- Stay humble (VERY IMPORTANT)
- Trade with an edge
- Continuously improve
- Know they can be wrong
- Focus on what they do best
- Never let ego get in the way
- Know when to stay out of the market


Mark Douglas quote


Learn to accept what the market is offering and wait for your next edge.
The outcome of each individual trade is statistically independent of every other trade.
Market analysis finds behavior patterns in the collective actions of everyone participating in a market.

1. Anything can happen in the markets
2. You don't need to know what is going to happen next in order to make money.
3. There is a "random distribution" between wins and losses for any given set of variables that define an edge
4. An edge is nothing more than an indication of a higher probability of one thing happening over another
5. Every moment in the market is Unique
- Mark Douglas

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zmaj View Post
Professional traders:

- Manage risk
- Stay humble (VERY IMPORTANT)
- Trade with an edge
- Continuously improve
- Know they can be wrong
- Focus on what they do best
- Never let ego get in the way
- Know when to stay out of the market


Mark Douglas quote

Learn to accept what the market is offering and wait for your next edge.
The outcome of each individual trade is statistically independent of every other trade.
Market analysis finds behavior patterns in the collective actions of everyone participating in a market.

1. Anything can happen in the markets
2. You don't need to know what is going to happen next in order to make money.
3. There is a "random distribution" between wins and losses for any given set of variables that define an edge
4. An edge is nothing more than an indication of a higher probability of one thing happening over another
5. Every moment in the market is Unique
- Mark Douglas

This information is excellent - in truth though, its likely not enough. Just like a post-it note on your monitor saying Be Disciplined isn't likely to change an undisciplined trader when their emotions are high - further is needed.

I listened to Trading in the Zone at least 10x. It was helpful, but it wasn't enough. It's in the details where the magic happens. So you may want to break each of those bullet points down and define your your relationship to them. (but only if you're really sick of losing or not realizing your full potential..)

Example.

1. Manage Risk

My maximum daily limit is X $. If I hit that limit I will stop trading.
( If I have made rules like this before and broken them, I need to take this a step further. I will either a) use a Rithmic connection with a forced daily loss limit that automatically exits my trades for me or I will get an accountability partner, etc)

My maximum weekly limit... (same)

My maximum per trade = X contracts, X points, etc. If I break that rule I will do XYZ

I can afford to lose the money in my trading account without it hurting my lifestyle or causing me huge suffering.

I have proven to myself that I am a consistently profitable trader so I feel confident when I am trading with real money.

--- If you get into the details and really bring this to life and really be accountable for your actions, you will find yourself in the upper 5% of traders sooner rather then later. If you keep this as a lifeless post-it-note, its not likely to help imo.

Remember the adult learning model:

Level 1: Unconscious Incompetence (you don't even know you're incompetent, or maybe you're in denial)
Level 2: Conscious Incompetence (you realize you have a challenge/problem/some learning to do)
Level 3: Conscious Competence (you experience being competent, you need to focus on it, you may need to remind yourself things, post-it notes can be handy in this stage, you might have notes you read before every session, you will have rules to follow and actually follow them most of the time)
Level 4: Unconscious Competence (you experience your competence as a state of FLOW, you know what you need to do and you just do it)

Be honest with yourself on where you're at each day. We don't just arrive at one level and stay there, often we fall back before we stabilize at a level. You may be at Level 4 and then a fight with your spouse brings you back to Level 2.. It's a journey..

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@TropicalTrader well said

Yes, we have to have a plan = The rules of engagement.

The worse thing for me is/are discretionary overrides.
It happens when i trash my rules of engagement in the garbage bin and start fishing expeditions for the tops or the bottoms.
Then the market really lets me have it


Up to 90% of my losses come from those "fishing expeditions"

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