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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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My first post - I'd like to give something back to this epic forum. I haven't spent a ton of time on here, but I've received some very valuable info/contacts. I've been feeling the huge value of this community and recently decided to buy an elite membership to show support. For those who can relate to what I'm about to share, I hope this helps at least 1 person. ;

Quick about me:

I got into trading in late 2008. I've been working on it since then mostly on a part-time basis (with a total of about 12 months full-time, a month here and there, etc) By now I've logged a ridiculous amount of hours and have investigated tons of strategies, methods, indicators, etc. I've had times where I grew my account 50% over a couple months and then blew it all up shortly after. There's been many times I've had a dozen plus trades in a row. However one thing remained constant: I kept blowing up accounts! Its really thrown me for a loop.Definitely traumatized myself a lot early on from losing money I shouldn't have been risking (not my rent/bill money, but a significant portion of my available resources, creating more cycles of needing to work on other things plus put a strain on many other areas - huge sacrifice. But I've been relentless, absolutely persistent, pick myself up from all the shitty moments. To me the thought of doing something else with $ potential, like internet marketing/starting another business after all the work I've put in, feels really lame and unattractive. My passion has always been short-term trading. I usually do 20+ "round-turns" per day. I'm in trades for 30 seconds -15 minutes usually, although I might leave a runner on for longer. I like to trade markets that have a huge range like NQ, FTSE and DAX. I'm using futures data on Sierra Charts and placing trades with my forex broker. (I don't think its worth it for me to trade micro-futures because of the commissions. I pay no commissions and have a 1-point spread during prime-times) In my opinion most forex brokers will f you over like its their mission. I've tried at least a dozen and have a couple I trust that have excellent conditions.

What "they" don't tell you:


Trading is a dangerous game and has huge opportunity cost. Very few people will tell you that after you get involved, especially when they're taking your money. The majority are selling us "gold-miners" defective equipment to take on our long journeys. Consider this for real, trading could drive you mad. That's legit. Everyone talks about Jesse Livermore but I don't hear them talking about his suicide.

It's of absolute necessity that we get our heads straight and keep em that way. One life to live. Excuses are for losers.

So, I finally admitted I was the problem (not the strategies) and for the last 2 years I've been working on my psychology. And for the last year I've doubled-down my efforts. Each day I spend on average 2 hours on pyschology. My favorite is listening to webinars, podcasts, audiobooks while going for long walks or having some down time at home. Its finally clicking and has helped me realize a LOT.

There are hundreds of ways to trade. Many of us get drawn to short-term trading because its a way to large success. Sure, if we already had a million, we could make 10% a year and live comfortably. That could be a few options, or swing trades or well timed buying of dips. I'm glad I don't cuz that would be really boring. Many people will tell you that its impossible to average 10% per week, but its not. The very word Impossible says I'm Possible. I'm sure there are dozens of members in this fine forum who can do that. I know that a few of my mentors have taught others to get to this level.

Ok, Let's Get Down to the Nitty Gritty Right now I have a large piece of paper with this beside my desk that I read before and multiple times during trading sessions:

TRADING MISTAKES THAT ARE BLOCKING MY SUCCESS AND EPIC DREAM LIFE:

1. Trading too big for account size
(creates fear and anger, excess potential)
2. Wanting revenge
(wanting to get my $ back blinds me from what's happening)
3. Ignoring risk limits
(you have to accept that some days you will be off or tilt and cannot keep blowing up. I will give myself enough trades so that I feel like I've had a big enough chance. Ex: I get to take at least 8 trades, as a scalper I am confident on the majority of days I will come out on top)
4. Not trading my planned trades
(you don't get smarter during the trading performance, you're way smarter when you're not trading and creating the strategy)
5. Not using good stop placements
(put stoplosses in clear "I accept that I'm wrong if it goes here" places)
6. Getting angry/upset after losses
(you lose your cool and then do stupid things. If you're using the correct risk size per trade, its ok to lose. Remember most days I can bounce back from a few losses)
7. Greed
(Greed is the fear of not enough, its for chicken-littles, not for pro-traders. I get paid from groups of trades, from groups of trades, not single trades!)
8. Catching Falling Knives, Selling into Squeezes
(I know its tempting monkey-man, this idea of catching a really big move, however betting against the trend is a 20% probability! Averaging down is for losers. In a strong trend move (staying below 34ema) wait for an impulsive move in the other direction followed by a pullback before considering switching sides. Or a well structured wedge, 2 tries only)


I see trading as a "highly specialized formula". Lots to consider including:


*The way you to choose to view "the market"
(one timeframe, multi-timeframe, one market, multiple markets etc, indicators or lack of)

*How you make trading decisions. (your strategy/strategies, 100% mechanical to full discretion and everything in between. Could you explain the method concisely to me in an hour with photos?)

*The amount of capital you have and how you use it
(per trade limits vs % of capital in your account, daily/weekly loss limits, your ability to honor those limits. Trading the last thousand dollars in your savings account or saved up for a "proper account" where you can risk only 1 or 2%)

*Is your strategy built to last?
(its working in which trading conditions and how do you identify when the correct conditions are present. How do you not trade when you have the urge but the conditions aren't right)

*Do you trade with a consistent approach? (at consistent hours, in a consistent mental/emotional state, repeating the same behaviours, ex: checking for high impact news and setting alerts)

*Are you always evolving? How are you evolving? Are you changing strategies every week and wondering why you're not consistent? (or markets) Are you actually learning from your mistakes?

*Are you neurotic or level-headed?
( good childhood? joking Do you freak (the f) out when crappy things happen in life? Are you able to recognize when you're losing your cool and do something to recenter?

*Do you have mentors? (are they 100% legit? Is it helping? It's unrealistic to think that we'll come into a highly competitive field and kick butt without a mentor. As trading is a performance activity, we're like athletes, most athletes have coaches and mentors.)

Example of an important risk management implementation:

I realized that my strength and passion is short-term trading aka scalping. I define scalping as taking some/all profits off between 5-10 ticks. Its been a huge help for me to trade a market with a large range where I can afford to take 8-10 trades before hitting my daily loss. Fool me once, fool me twice, but not 8 times (on most days). This gives me a strong chance to finish the day profitable or at least with minor damage.

--continued in next post


pss, here's how I choose to view a market:

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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.
https://www.youtube.com/results?search_query=andrew+menaker

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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Congratulations on the new journey! Learning more about psychology made a huge difference not just in my trading, but in my entire life.

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Well done @TropicalTrader. Really inspiring!
I'm looking forward to reading more.

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Big Mike View Post
Congratulations on the new journey! Learning more about psychology made a huge difference not just in my trading, but in my entire life.



Grantx View Post
Well done @TropicalTrader. Really inspiring!
I'm looking forward to reading more.

Thank-you!

Ok, check this out, I use the Emwave2 device which was recommended by Dr. Menaker.. It's got a little sensor that attaches to my ear, plug in into my computer with usb and comes with a software. You run programs that guide you on how to breathe with a little pulser that goes up and down. You can see your coherance levels going up or down (its a great way to measure your performance state without mental biases). Can also be a meditation tool..


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here's a lil demo:

1. just turned it on (2:48am)


2. notice the high level is moving up? that's coherance, I had closed my eyes for about 90 seconds and did deep breathing


3. a few more minutes of deep breathing, focussing on gratitude - boom! in the zone

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Emwave 2 Continued

Ok, so right after the last photo I put on a trade.

notice how my coherance dropped a bit


This is a wonderful device to help you stay in the zone and not that expensive either. I got mine on sale for 150..

I keep most of it hidden, and just keep an eye on the breath meter and high coherance level.. Excellent reminder to breathe deep.. The more we control our state, the less monkeying around we'll do. As soon as we start getting into fight or flight consciousness, energy moves away from our unbiased rational brain to the highly emotional/neurotic monkey brain... If you have "discipline issues", this is why.. Next we will start to see what causes us the least stress (bias), like oh, maybe it will turn around. I love Dr. Menaker's expression "the smoking hopium trade".

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here's the trade I put on, divergent double top sell at key area. I thought it got rejected pretty hard before the previous high and a lot of eager sellers there based on the 6 brick impulse out of there, nice wick above the last high.. I'll take these all night long...

Dax using mt4 because I don't have eurex data yet. (next month). I'm trading NQ also using Sierra Chart but its lame tonight. I like these 2 because they're cheap to trade with my fx broker, 1 point spread, and they give a lot of moves. Dax has some beautiful impulses. Need to be disciplined and choose stop locations carefully and then don't f with them.. #RigidWithRisk


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bigger picture (zoomed out 2 min bar chart)

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"double top killer" trade in progress.. (I made up the name, its on my list of trades I may take) Those times when you know it wants to go grab the stops above the double top. only 1/2 position because I got in a bit late so left some for a retrace which didnt come. (Original stop was at equal distance to target and moved up by the time I made this screenshot. ) I saw a strong impulse.


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I've just watched the webinar you posted and it was very good. A few points I picked out (my favourite is tick-itis ) :
  1. If you are trading for validation or to make money then you won't have a feel for the market. I mean we all trade to make money but there is a difference between doing something for money and doing something out of desperation.
  2. Vigilance and attention do not have to mean action.
  3. Manage your feelings first and then trade. Don't trade to manage your feelings (boredom, greed)
  4. Everyone has un-met developmental needs. Impatience, anger, all the emotions that trading brings out in us are simply reverberations of something deeper.
  5. Low contentedness and low satisfaction in life are associated with 'grabbing'. This has been identified in rats, monkeys and humans. If you can find some way of balancing your life then perhaps you will take less impulsive trades ie there will be less grabbing and more patience.
  6. Tick-itis. An affliction where you ride every trade tick by tick. Every tick in your favour brings relief and hope. Every tick against you is a personal attack and assault on your senses.
  7. Our shortcomings are triggered frequently with the market such as getting angry when you take a loss. You will have an edge if you overcome this.
  8. Where on the spectrum do you exist? On one end is risk aversion where you trade not to lose, feel the desire to be right, hesitate on trades, exit trades early. On the other end is risk-taking where you trade to make money. I don't know what the downside to this end is. He didn't go into it. Maybe addiction?

Great stuff. Thanks for sharing that.

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out with small profit, proabiities just declined

~I think in probabilities (rational brain)~



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Grantx View Post
I've just watched the webinar you posted and it was very good. A few points I picked out (my favourite is tick-itis ) :
  1. If you are trading for validation or to make money then you won't have a feel for the market. I mean we all trade to make money but there is a difference between doing something for money and doing something out of desperation.
  2. Vigilance and attention do not have to mean action.
  3. Manage your feelings first and then trade. Don't trade to manage your feelings (boredom, greed)
  4. Everyone has un-met developmental needs. Impatience, anger, all the emotions that trading brings out in us are simply reverberations of something deeper.
  5. Low contentedness and low satisfaction in life are associated with 'grabbing'. This has been identified in rats, monkeys and humans. If you can find some way of balancing your life then perhaps you will take less impulsive trades ie there will be less grabbing and more patience.
  6. Tick-itis. An affliction where you ride every trade tick by tick. Every tick in your favour brings relief and hope. Every tick against you is a personal attack and assault on your senses.
  7. Our shortcomings are triggered frequently with the market such as getting angry when you take a loss. You will have an edge if you overcome this.
  8. Where on the spectrum do you exist? On one end is risk aversion where you trade not to lose, feel the desire to be right, hesitate on trades, exit trades early. On the other end is risk-taking where you trade to make money. I don't know what the downside to this end is. He didn't go into it. Maybe addiction?

Great stuff. Thanks for sharing that.


Nice, Thanks for sharing this! GEMS


ya, tick-itis is a thang..

5-10 years I was a yogi (teaching yoga & doing webdesign in tropical places like Koh Phangan Thailand and Big Island, Hawaii) and as I did/had done lots of meditation, I thought I had my mental game down. But, it wasn't "suffish".. There's a lot to the performance arts. Its relatively easy to be cool when our stress levels are low, what about when the stress levels are higher? Do you tilt? and if so: how often and how badly?

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I'll take this "all night" too!


I call this a "roof reversal triple-top @ supply zone"


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out early on the 2nd 1/2, I don't like this range on 2 minute, probabilities changing..


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"squeeze buy"

looks like sellers aren't so eager after all.. time to get the stops, squeeze them shorts boys..

(my entry was a few points later then I would prefer)... trading is not a game of perfect..


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This might fail, adjusted stops to "I'm wrong here level", I like the "perceived probability" and R factor is reasonable. If this fails might get another opportunity at a lower level (biased to the long side right now, after large impulse and order zone above).


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That trade failed.

That's where I say: Thank you Loss! What can you teach me so I'll be a better trader?

(opposite of getting angry/bitchy, vibe-control in effect)

Giving it another shot: "Range Reversal"


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Risk reduced, stops tightened. Wrong at that level. R Factor just improved bigtime. "Perceived Probability" still good


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Half off, half to go, I might be leaving money on the table here but this night owl needs to go to bed soon..


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Ok, last trade, "roof reversal triple top" short


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out first half, second at be (break even)

good night folks~ remember to stay rigid with your risk and flexible with your expectations

#greenday



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ok, very last trade, lol

"triple bottom, pop tha top special", entry slightly late


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woop, there it is.. to quote FT71 "I landed on the right side of probability".


A lil gem, for me I prefer working in 1/2's rather then 3rds.. It keeps me more flexible and less entangled in trade ideas. My nemesis is "big deals" and "overconfidence". #KnowYourKryptonite

If I was to keep trading (I'm not, going to bed for reals), I would now have a long bias and look for pullback entries over the next few hours . (keeping an eye on nq and es levels).. new highs, impulsive move up here, exciting territory.. Maybe a sharp fake down and then it gets stuck and some momentum back up?

(on the flip - if this was to sell off hard (impulsive move 40 points or so down and es and nq looked weak, my bias would flip to shortside) Scalpers stay malleable..



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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.
https://www.youtube.com/results?search_query=andrew+menaker

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.

1st, thank you for sharing your valuable insights.

I really learned a lot that was helpful in trading and life in general by taking Andrew Menaker's course. And he is just a good man who is willing to respond as much as possible to questions and comments. I think you will gain a lot from his course as well.

Thanks again from Jeff from the other Vancouver.

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Trading in the Zone by Mark Douglas big help.

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My first post - I'd like to give something back to this epic forum. I haven't spent a ton of time on here, but I've received some very valuable info/contacts. I've been feeling the huge value of this community and recently decided to buy an elite membership to show support. For those who can relate to what I'm about to share, I hope this helps at least 1 person. ;

]

Great stuff. Glad you shared it as there is so much truth in there on many levels.

I recently did a webinar called why most futures traders lose and i think it fits very well with the post and valuable information shared.

PM with any questions about Cannon Trading (800) 454-9572 (310) 859-9572. Trading commodity futures, forex and options involves substantial risk of loss. The recommendations contained in this post are of opinion only and do not guarantee any profits. These are risky markets and only risk capital should be used. Past performance is not necessarily indicative of future results.
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  #30 (permalink)
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Nice, Thanks for sharing this! GEMS


ya, tick-itis is a thang..

5-10 years I was a yogi (teaching yoga & doing webdesign in tropical places like Koh Phangan Thailand and Big Island, Hawaii) and as I did/had done lots of meditation, I thought I had my mental game down. But, it wasn't "suffish".. There's a lot to the performance arts. Its relatively easy to be cool when our stress levels are low, what about when the stress levels are higher? Do you tilt? and if so: how often and how badly?


I just wanted to jump in briefly and say what a great initial posting you've made and how encouraging it is.

I very recently stopped aiming for the big scores (after more than six years, believe it or not) and got it thru my thick head to go for 5-10 tick trades, as you mentioned, and to scale up slowly, recognizing that 1 point of profit with 5 ES contracts, per day, would give me more per year than I was making at my last IT job. And it's not that hard, now that I have all those years of 6-8 hrs a day of screen time.

Restricting myself to decent setups, keeping my losses no larger than my average wins and just plugging along, BREATHING and putting my attention on something else when a trade is on, to cleanse myself of my severe tick-itis does, in fact, make all the difference in the world.

And, as another former yogi, you're right. It's very helpful, but not enough, to have maintained serenity in a low stress life. Gotta keep breathing thru these trades. Set a stop, set a target and GTFO of the office till it's done.

Anyway, thanks again. Great thread, after the recent 'desperation threads' that have been started.

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Many years ago when I first accepted the vast importance of psychology, I started to develop a combination trading tool that used emwave type inputs and combined it in a traditional trading indicator on a time series chart.

I actually had plans to market such a device with a trader here in the community which was a personal friend of mine.

I never followed through unfortunately.

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Hello TropicalTrader,

Thank you for the effort in sharing your trading history.

Can you please explain how Al Brooks has helped you? I was thinking of purchasing his course soon to improve my price action skills?

Thank you

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  #33 (permalink)
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I realized that my strength and passion is short-term trading aka scalping. I define scalping as taking some/all profits off between 5-10 ticks. Its been a huge help for me to trade a market with a large range where I can afford to take 8-10 trades before hitting my daily loss. Fool me once, fool me twice, but not 8 times (on most days). This gives me a strong chance to finish the day profitable or at least with minor damage.

Hello TropicalTrader,

I agree on the take the manageable profits, however with taking profits per trade comes risk per trade.

Can you please explain the follow as it pertains to your trading:

1. How much do you risk per trade?
2. What is your thoughts on Risk vs Reward per trade? Do you prefer R:R < 1 or R:R = 1 or R:R > 1 trades?
3. Do you stick to risking 1-2% of capital per trade?
4. Are all you trades exit at 5-10 ticks regardless of risk?

Thank you

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  #34 (permalink)
Naples FLA
 
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Great thread. Will watch the webinar and look more closely at Convergent.

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  #35 (permalink)
sacramento ca us
 
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A Lot of good info I have wanted to do more work on psychology but have been putting it of
procrastinating is another problem to overcome beside trading
Thanks

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Hello TropicalTrader,

Thank you for the effort in sharing your trading history.

Can you please explain how Al Brooks has helped you? I was thinking of purchasing his course soon to improve my price action skills?

Thank you


I think I can contribute to this. I got his course free from a sign up to a trade platform deal. I won 50 $ on platform and learned more in 3 to 6 months from his course than I had learnt from reading tons of books and looking at webinar for 8 years or so!

I still read trading books, but never on technical stuff. Except just now I found Mind over market, volume profile FT71 and convergent. I know they gonna be my last stop! 😂

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  #37 (permalink)
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joe s View Post
A Lot of good info I have wanted to do more work on psychology but have been putting it of
procrastinating is another problem to overcome beside trading
Thanks

I have a T-shirt that helps me. It says


Top 10 reasons to Procrastinate:
1.



I highly recommend it.

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  #38 (permalink)
Vancouver Canada
 
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DavidBodhi View Post

Restricting myself to decent setups, keeping my losses no larger than my average wins and just plugging along, BREATHING and putting my attention on something else when a trade is on, to cleanse myself of my severe tick-itis does, in fact, make all the difference in the world.

Thanks David, yes, we're looking to stay in Conscious Competence zone, instead of going back to conscious uncompetence and doing dumb things.. its a process..

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TropicalTrader View Post
Thanks David, yes, we're looking to stay in Conscious Competence zone, instead of going back to conscious uncompetence and doing dumb things.. its a process..

To set a time limit helped me to keep profits and not give it all back on the same day....
Now i am only trading for 2-3 hours per day. The hardest part for me is stop trading if i am down, i have to think “tomorrow is another day“.

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goodoboy View Post
Hello TropicalTrader,

Thank you for the effort in sharing your trading history.

Can you please explain how Al Brooks has helped you? I was thinking of purchasing his course soon to improve my price action skills?

Thank you

I've had an interesting journey with his teachings. I got the 3 books back in 2010 and avidly started reading them, taking notes, etc.. I got massive information overload and learned some things that helped and then some things that didn't. At that time I was going back and forth between renko and time charts. Sometimes time charts were great but often, they messed me up. Now I can see that I had an unrealistic approach to learning, if I would have committed to study it for 1000 hours, take my best setups, do statistics, backtesting, sim trading and then go live scaling up, it probably could have worked.. I realized later though that I don't learn very well with books unless I take tons of notes, draw pictures of what i'm learning, etc.

I took his video course last year with the intent to learn more about price action and find some things that could help me with my renko trading (I only use renko and market proifles) , I like his ideas around how a market has different types of trends, different types of ranges, plus the different transitions to/from, and ways to look at labelling certain moments (ex: major trend reversal). I like some of his patterns (spike and channel).. I don't trade his individual bar-based setups or use the 20 ema.

Brian Shannon has some really good stuff too, they both describe ideas around the classical Wyckoff Accumulation/Distribution/Markup/Markdown cycles which is fundamental knowledge imo. I'm not into mult-time frame analysis though, that really messes me up. I look at "the profile" for big picture, find that very helpful..

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  #41 (permalink)
Legendary Pratik_4Clover
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High praise from my side to Al Brooks work too.

Personally though, I've went through lot of youtube videos and other sources for getting better understanding of psychological aspect of succeeding in trading. But your real introduction to yourself only starts when you come to terms with both winning and losing, identify your personal limits on it and also your personal goals and expectations.

When I was in Uni, we did one project where a very lengthy questionnaire was developed for computerized execution of risk appetite as well as savings expectation and real achievable over 12 years projected period. Results were surprising, almost no one knew exactly how much they were ready to risk. They also didn't have much clue about how much they needed to save.

Point here is its very difficult to identify yourself with any -established - if this happens then you feel this or you feel this if this happens-, including general psychology wisdom. What you may experience, start expecting and achieve would be very unique to you. Also, psychological impact trading may have on you also differs from what it may have on others. You may derive pleasure from it whether you make money from it or not, you may feel stressed out whether you make money or not. Therefore I like that you are including some kind of monitoring in this, I'll sub and follow.

This is very interesting topic and deserves lot of investigation. So thank you for making this thread.

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  #42 (permalink)
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goodoboy View Post
Hello TropicalTrader,

I agree on the take the manageable profits, however with taking profits per trade comes risk per trade.

Can you please explain the follow as it pertains to your trading:

1. How much do you risk per trade?
2. What is your thoughts on Risk vs Reward per trade? Do you prefer R:R < 1 or R:R = 1 or R:R > 1 trades?
3. Do you stick to risking 1-2% of capital per trade?
4. Are all you trades exit at 5-10 ticks regardless of risk?

Thank you


So here's how I'm doing it and this is not advice for anybody here, my risk tolerance is quite high. I'm also not trading with all my funds in the trading account.. I have a plan to lessen the risk in a while. I'm going to answer in a different format for simplicity.

My daily limit = 10% of my trading account balance
My per trade size = daily limit divided by 7 trades
My entry methods

A) All in , Scale Out
All In with 3 positions, Stoploss 9 (on Dax, using FX broker with 0.7 point spread)
First Scale 6.5-7 points (when I get the scale, stops are adjusted to 4 points behind breakeven, now risk is out of trade)
2nd Scale 9-11 points (sometimes I do this manually, othertimes preset for 9)
Runner: this depends on where I think the next move is to, usually I take profits between 20-30 points on the runner, but sometimes earlier if I'm going for a smaller target

B) 1/2 in now, 1/2 in later

1/2 in with a wider stop (around 15 points)
If it goes in my favor, then I nab some profits and don't sweat the smaller size. If I take some heat of 7-10 points but think my stop is still good, I'll enter the 2nd half and then average out the stops, this is for trades that I think have a higher-then-not probability of working but I'm nervous to get with full size on it.

C) All in, 20-25 point stop

This is for days like today and yesterday when the volatility is high. I feel more comfortable getting in with a larger stop in this environment. I trade less on individual renko sequences and more on impulsive waves.


Sometime later this year I will switch to only risking 5% of my account as my Daily Risk Limit.. For now, I'm cool with it, I don't often lose more then one day in a row.

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  #43 (permalink)
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Adolpho911 View Post

I still read trading books, but never on technical stuff. Except just now I found Mind over market, volume profile FT71 and convergent. I know they gonna be my last stop! 😂

Nice! I really needed FT71's materials to get some things straight and it helped a lot to hear about his journey trading other traders to trade with his money. It's nice to know that some people get how freeking hard it actually is to become an elite trader with all the hurdles to overcome.

They have a special right now at Convergent, until the end of this month you can get quarterly beta membership for $199 which comes with trade the news, pretty epic value.. I found the webinars in the members area to be extremely useful.

PS. I also really like Merritt Black's vids on youtube. He helped me identify my weak points so I could work on fixing them. I agree with his philosophy of "context is king" and using the profiles to determine context.

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  #44 (permalink)
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My New "Baseline Trading Approach"

So where I've been at for the last month or so is in a grey area around "religiously trading my setups which are written down in front of me" and intuitively reading flow and making trades..

What happens is when I'm in the zone and seeing things clearly I'm often reading the flow correctly.. When I'm a bit off or I take a couple of losers that weren't part of my written down trades - then I can get a bit cranky or judgemental on myself for not "sticking with the program" .

I went away for the weekend into nature and did not bring any laptops lol.. I received an intuition to try this approach for a while.

1) My "Baseline Trades" are 8 setups I have written down in front of me at all times (and I read before starting and again during trading)..
2) IF my Current Daily Drawdown is <= -30% of Daily Loss Limit THEN Only Trade Baseline Trades


This gives me the opportunity to make discretionary trades but if I'm not doing well then I need to stick with the structured trades.

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  #45 (permalink)
Amsterdam + Netherland
 
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Yep, I bought a quarter

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Big Mike View Post
Many years ago when I first accepted the vast importance of psychology, I started to develop a combination trading tool that used emwave type inputs and combined it in a traditional trading indicator on a time series chart.

I actually had plans to market such a device with a trader here in the community which was a personal friend of mine.

I never followed through unfortunately.

Sent using the futures.io mobile app

That's really interesting Mike, did you end up using the tool in your own trading for a while?

You could have advertised it as a leading indicator, lol.

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  #47 (permalink)
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TropicalTrader View Post


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.
https://www.youtube.com/results?search_query=andrew+menaker

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)

So much to like on this post. Great share. Thank you.

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  #48 (permalink)
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Pacha View Post
Everything change for me once I learned how to control my emotions while trading.

Was there a certain technique that worked for you to control your emotions ? Or a bunch of things?

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  #49 (permalink)
Grand Junction, Colorado/USA
 
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I'm with you all on mentors and coaches. I've been in Merritt Black's chat, which I loved and listen to Mark Douglas on youtube, among others, but sometimes you need a one-on-one. I have a great system but was having some blocks (when you repeat behavior in spite of yourself) and also needed a sounding board. I'm working with Robin Dayne (RobinDayne.com) who's coached the best of the best, and she is most certainly helping me! I'd recommend her to anyone struggling with psychology, or even those in need of a little strategy tweaking, or both.

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  #50 (permalink)
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bandtasia View Post
I'm with you all on mentors and coaches. I've been in Merritt Black's chat, which I loved and listen to Mark Douglas on youtube, among others, but sometimes you need a one-on-one. I have a great system but was having some blocks (when you repeat behavior in spite of yourself) and also needed a sounding board. I'm working with Robin Dayne (RobinDayne.com) who's coached the best of the best, and she is most certainly helping me! I'd recommend her to anyone struggling with psychology, or even those in need of a little strategy tweaking, or both.

I'm way too familiar with the repeating crappy behavior part, lol. Is there a particular category that's helping you?
(ex: mindset, rules, visualization process, accountability)

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  #51 (permalink)
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bandtasia View Post
I'm with you all on mentors and coaches. I've been in Merritt Black's chat, which I loved and listen to Mark Douglas on youtube, among others, but sometimes you need a one-on-one. I have a great system but was having some blocks (when you repeat behavior in spite of yourself) and also needed a sounding board. I'm working with Robin Dayne (RobinDayne.com) who's coached the best of the best, and she is most certainly helping me! I'd recommend her to anyone struggling with psychology, or even those in need of a little strategy tweaking, or both.

Hi Bandtasia,
I looked up Robin Dayn (new to me) as I certainly feel seriously stuck in my trading. As much as is possible, could you expand a bit on how she works and why you find her approach of benefit? I noticed that she uses a 'modified NLP'. Is that her main toolbox? I've had past training in NLP in terms of 'life coaching' (not trade relaed) and was not that impressed. Thanks in advance

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  #52 (permalink)
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This the most helpful book I have read in the last 25 years concerning trading psychology. Ruth Barrons Roosevelt also has other books but this is my favorite.

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Robin specializes in removing blocks (Block Buster) around built up fears and repeated mistakes, and has an arsenal of psych tools that can be tailored to the individual trader. As a trader, she's also helped me work through some minor adjustments (especially with this crazy market right now) that are helping me both mechanically and psychologically, but she's not trying to change my already solid system.

Depending on the situation, she has exercises for changing or enhancing mindsets, letting go of the past, correcting bad habits and solutions moving forward. As a client, the block removal is available for lifetime even if you no longer need one-on-one coaching. She also does group and individual coaching in her TAS (Trade Accelerator Series) for 30 days, and it's a great place to start. You get a discount if you continue after 30 days. She always delivers way more than she promises. My trading (and attitude) is rapidly improving.

BTW, I am not getting any compensation - she's not even aware of what I have written. I just know how painful it is to trade alone and keep making mistakes knowing it's not my system! I had to find someone to help me shift my head. And, she never makes you feel bad about yourself - we already do that to ourselves just fine - but we can catch ourselves and create better outcomes when we have the right help. I hope this helps. Don't hesitate to ask more questions!

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  #54 (permalink)
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bandtasia View Post
Robin specializes in removing blocks (Block Buster).....

That's awesome Bandtasia, thanks for the review!

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I highly recommend this book. It's now one of my top fav trading books. It really takes you into how our brains work while we're trading.. (tip: using Book Bazaar app to read aloud the ebook)

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i will take a look thanks

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I found Andrew Menaker's work quite helpful in terms of trading psychology.

https://www.andrewmenaker.com/

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Ouch, messed up. Confession time: so I traded well all morning, was really patient and honouring my per trade limits, then in the last hour went from being up 250 on the day to -250 for the day.. Took a couple full losses in a row (unlucky) and then made 2 undisciplined trades which both lost (chasing like a monkey).. Its amazing how I read my mistakes list everyday before I start and my process goal is to not make any of them, but I still often do. If I would have just accepted the loss (something I'm working on which has been my nemesis) I would have made up at least one of them with a valid setup I missed while chasing.

Something I've become increasingly aware of is that I can get decision fatigue or sucked into impulsive/careless trading after the 4 or 5 hour mark. I've been taking breaks and eating regular snacks to compensate for that which is helpful. I didn't sleep well last night though, have to be really careful on those types of days.

On the positive - the old me probably would have blown up his account after getting really frustrated. I just hit 1/2 of my daily risk limit.

I will review the video later and face palm myself repeatedly..

(Tip: using Open Broadcaster free software to record my sessions)

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I struggle with this as well. My bouts of undisciplined recklessness are becoming less and less frequent but they still sneak up and surprise me from time to time.

I think the best we can do is come into each trading day with a clear mind and learn as much as we can from days when mistakes or lapses in judgement.

Also kudos to you for hitting the fatigue mark at hour 4-5. By two hours in I am all but useless for making intelligent trading decisions.

-Zimmer

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I will review the video later and face palm myself repeatedly..


No need to do that. We all make mistakes. I find that self-loathing is far worse than simply admitting that we made mistakes and moving on. When I do this, I say to myself, "stop being an idiot" (in a "wake up" way, not a self-loathing way) and I attempt to snap myself into a focus on the market (instead of a focus on my P&L), into taking the right trade (versus the trade I want to happen), and into a state of accepting what I see (instead of a state of hope that my clearly wrong trade--which I know probably won't work--happens to work).

I did the same thing early in the day, was down because I was distracted by a long term trade in another account and did not see the market objectively in my day trade account. Fortunately, I was able to crawl back to turn a decent enough profit; but I was fortunate in that I made my mistakes early, and you made yours late. It happens. We all do it.

What we have to be careful about, IMO, is being too cautious when this kind of thing happens. Capital preservation is key, but I've had days where I've lost big money, and was terrified to trade again that day or the next day. Some say to quit, take time off, etc. I think there's definitely a time for that, especially if there is genuine trauma or a lot of emotional/mental strain. But if the attitude shifts to what I mentioned above (it may be a different attitude shift for you, the above is just what works for me), then it makes sense to trade with conviction and get back in there. You know you can make $X -- it's just a number, so just go get it. I don't keep my P/L up either, though I do look at it, but only expressed in points, not currency. To me this keeps the focus to push hard and trade well and get points.

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Ouch, messed up. Confession time: so I traded well all morning, was really patient and honouring my per trade limits, then in the last hour went from being up 250 on the day to -250 for the day.. Took a couple full losses in a row (unlucky) and then made 2 undisciplined trades which both lost (chasing like a monkey).. Its amazing how I read my mistakes list everyday before I start and my process goal is to not make any of them, but I still often do. If I would have just accepted the loss (something I'm working on which has been my nemesis) I would have made up at least one of them with a valid setup I missed while chasing.

Something I've become increasingly aware of is that I can get decision fatigue or sucked into impulsive/careless trading after the 4 or 5 hour mark. I've been taking breaks and eating regular snacks to compensate for that which is helpful. I didn't sleep well last night though, have to be really careful on those types of days.

On the positive - the old me probably would have blown up his account after getting really frustrated. I just hit 1/2 of my daily risk limit.

I will review the video later and face palm myself repeatedly..

(Tip: using Open Broadcaster free software to record my sessions)

Suggestions Only:
Drink water when trading as much as you can.
create a new rule that says if you have a loss...you must wait 30 minutes before taking another trade...or some time element.
Your story rings loudly with every trader here on this forum.....they have experienced it in their journey, your not alone.

Cheers

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Suggestions Only:
Drink water when trading as much as you can.
create a new rule that says if you have a loss...you must wait 30 minutes before taking another trade...or some time element.

I'll present a counter opinion here -- of course, being dehydrated is just bad in general, for health. And as such, it certainly won't help your trading if you're dehydrated. Assuming you are not seriously dehydrated though.. drinking water will not help you trade better.

Losses are a part of trading. While some rule could be put in place to prevent a string of losses exceeding some amount, it's counterproductive to suggest that a loss should result in a "time out" ... I would imagine that this would practically paralyze a trader to the point of being unable to act, for fear of losing, thus facing the "no trading for 30 minutes" punishment.

Just my opinion, but I think traders are too afraid of losing already. We must be able to put on risk. That's the job of a trader -- put on calculated risk, learn how to lose small, and learn how to let the market pay us when we're aligned. We can't get paid by the market if we can't learn to put on risk, and we can't put on risk unless we are comfortable taking a loss, albeit a controlled/small one.

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I highly recommend this book. It's now one of my top fav trading books. It really takes you into how our brains work while we're trading.. (tip: using Book Bazaar app to read aloud the ebook)

Yes, this is a real good book for traders.

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josh View Post
No need to do that. We all make mistakes. I find that self-loathing is far worse than simply admitting that we made mistakes and moving on. When I do this, I say to myself, "stop being an idiot" (in a "wake up" way, not a self-loathing way) and I attempt to snap myself into a focus on the market (instead of a focus on my P&L), into taking the right trade (versus the trade I want to happen), and into a state of accepting what I see (instead of a state of hope that my clearly wrong trade--which I know probably won't work--happens to work).

I did the same thing early in the day, was down because I was distracted by a long term trade in another account and did not see the market objectively in my day trade account. Fortunately, I was able to crawl back to turn a decent enough profit; but I was fortunate in that I made my mistakes early, and you made yours late. It happens. We all do it.

What we have to be careful about, IMO, is being too cautious when this kind of thing happens. Capital preservation is key, but I've had days where I've lost big money, and was terrified to trade again that day or the next day. Some say to quit, take time off, etc. I think there's definitely a time for that, especially if there is genuine trauma or a lot of emotional/mental strain. But if the attitude shifts to what I mentioned above (it may be a different attitude shift for you, the above is just what works for me), then it makes sense to trade with conviction and get back in there. You know you can make $X -- it's just a number, so just go get it. I don't keep my P/L up either, though I do look at it, but only expressed in points, not currency. To me this keeps the focus to push hard and trade well and get points.


Good points Josh! I was semi-joking about the face palming, I did it a couple times and laughed.. I watched my session videos for the last couple days and was a little disgusted with how many trades I took that were not part of my setups. Considering I have 11 setups, wtf?! But I keep in perspective that I've had issues with discipline for a long time and they don't go away overnight.. Each day I get better and better.. By watching the video replay it brings another layer of awareness. I'm also doing some visualizations and imagine myself being tempted and then asking the question, is this one of my 11 playbook setups? And then, no its not, sit on your hands buddy. Each time I'm tempted to make a trade I will journal about that too, feeling really tempted right now but consistency is important to me. Hopefully the undisciplined trades will be in the rear view mirror soon. One thing that helps which I've been slacking on lately is using the replay function in sierra charts, since I trade renko, I can click brick by brick and make decisions. They're a little blind because I don't have my market profile levels but its good for enhancing my discipline and renewing confidence after losing days.

The distraction thing has been huge for me. For now I just focus on trading one market only. I'm developing and testing some ea's, I'm running those in a separate account and check them before and after my manual trading session. I've had to learn this the hard way. Before I was trying to manage swing trades in one account while trading short term in another and it was a losing battle. Gotta build the discipline muscles!

You're right about the fear factor part, not pulling the trigger has never been my issue though, its been pulling it too much.

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josh View Post
I'll present a counter opinion here -- of course, being dehydrated is just bad in general, for health. And as such, it certainly won't help your trading if you're dehydrated. Assuming you are not seriously dehydrated though.. drinking water will not help you trade better.

Losses are a part of trading. While some rule could be put in place to prevent a string of losses exceeding some amount, it's counterproductive to suggest that a loss should result in a "time out" ... I would imagine that this would practically paralyze a trader to the point of being unable to act, for fear of losing, thus facing the "no trading for 30 minutes" punishment.

Just my opinion, but I think traders are too afraid of losing already. We must be able to put on risk. That's the job of a trader -- put on calculated risk, learn how to lose small, and learn how to let the market pay us when we're aligned. We can't get paid by the market if we can't learn to put on risk, and we can't put on risk unless we are comfortable taking a loss, albeit a controlled/small one.


I know I need a break when I start swearing in my trading journal.. I'm getting better at pulling myself away for 5-10 and then when I come back putting the emwave on and doing the diaphramatic breathing. My tendency is to go into fight mode and the anger makes me totally irrational. (monkey brain mode)

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This is a great webinar imo...


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josh View Post
I'll present a counter opinion here -- of course, being dehydrated is just bad in general, for health. And as such, it certainly won't help your trading if you're dehydrated. Assuming you are not seriously dehydrated though.. drinking water will not help you trade better.

Losses are a part of trading. While some rule could be put in place to prevent a string of losses exceeding some amount, it's counterproductive to suggest that a loss should result in a "time out" ... I would imagine that this would practically paralyze a trader to the point of being unable to act, for fear of losing, thus facing the "no trading for 30 minutes" punishment.

Just my opinion, but I think traders are too afraid of losing already. We must be able to put on risk. That's the job of a trader -- put on calculated risk, learn how to lose small, and learn how to let the market pay us when we're aligned. We can't get paid by the market if we can't learn to put on risk, and we can't put on risk unless we are comfortable taking a loss, albeit a controlled/small one.


https://www.psychcongress.com/news/dehydration-impairs-cognitive-function

what I found interesting......in checking the color of your urine in the morning....in the last paragraph...if real clear..to much water..... if real gold in color not enough but without doubt dehydration can cause cognitive issues...based on research...not forum opinion

And any trader that does not have a "time out" plan of some sort....is not balanced in the risk category.....
according to Mark Douglas and Andrew Menaker...who write books about the psychology of trading

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@TropicalTrader would you please come on and participate in our webinar series "An Afternoon With".. ?
@tturner86 can schedule it. Say yes

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Big Mike View Post
@TropicalTrader would you please come on and participate in our webinar series "An Afternoon With".. ?
@tturner86 can schedule it. Say yes

Wow, thanks for the offer Mike! Yes. May would be a better time for me and the audience as I'll have a few more things to share then..

P.S. Someone who I think would be an awesome guest is Steve of Paracurve.com (Formerly: No Brainer Trades). I did a 3-day course with him in 2014 when he was just trading forex. Since then he's made the leap to futures.. I think it make for a really interesting interview about that transition.

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Awesome. Terry will reach out shortly to coordinate the date.

Topic is up to you. Can be your journey. Can be method. Whatever you want.
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Wow, thanks for the offer Mike! Yes. May would be a better time for me and the audience as I'll have a few more things to share then..

P.S. Someone who I think would be an awesome guest is Steve of Paracurve.com (Formerly: No Brainer Trades). I did a 3-day course with him in 2014 when he was just trading forex. Since then he's made the leap to futures.. I think it make for a really interesting interview about that transition.

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I highly recommend this book. It's now one of my top fav trading books. It really takes you into how our brains work while we're trading.. (tip: using Book Bazaar app to read aloud the ebook)

Ive started reading this and it is excellent. I highly recommend this book.
Thanks for the recommendation

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Awesome. Terry will reach out shortly to coordinate the date.

Topic is up to you. Can be your journey. Can be method. Whatever you want.

Hi Mike, Terry and all, I've been thinking about the webinar. In the spirit of expanding the ideas
in this thread and accelerating growth for traders, here's what I came up with..

An Afternoon with Tropical Trader:

*Trading Journey/Timeline
*Pitfalls and Lessons Learned
*On Strengths and Kryptonite
*What I Wish I'd known About Psychology
*Some Trading Lessons from Real Masters
*Ways to Improve as a Trader
*Bonus: A Few Technology Hacks

(screen share with powerpoint presentation)

Cheers,
J

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I listened to Trading in the Zone for around the 10th time over the weekend. It's such an e p i c book.. So densely packed with knowledge. If I could only have one psychology book, that would be the one..

A few passages I highlighted in my notebook:

"Consistency is a state of mind"

"The best traders aren't afraid, preventing them from getting reckless"

"What separates the best traders from everyone else is not what they do or how they do it - but rather how they think about what they do and how they are thinking when they do it".

"Fear is the source of 95% of trading errors"


"Your state of mind is a byproduct of your beliefs and attitudes. Winning is a state of mind just like happiness, having fun and satisfaction are states of mind."

"One habit many losing traders have is blaming the market. They shift the responsibility onto the market". (victim mentality)

"Taking responsibility is the cornerstone of a winning attitude"

"When you are winning, you are more susceptible to making a mistake. Euphoria makes you believe that nothing can go wrong".


The 4 Trading Fears:

Fear of losing money
Fear of missing out
Fear of being wrong
Fear of leaving money on the table


Remember that this is a process and usually requires a lot of time, consistent effort, mental toughness and constant repetition to re-train your minds (rational, limbic, reptilian) to be effective for trading. Since I started putting in full time hours 6 months ago and doubled-down on my psychology+workload, I've made huge improvements.. I've also beaten one of my nemesis', having "emotional blowup days".

Something else that's very useful I received from Dr. Steenbarger - make a list of what sets you off ("makes you" angry, frustrated, filled with regret, etc).. For me it was being "wrong" and too much stress (from putting on too big size, making mistakes, impulsive trading, taking a few losses in a row and losing confidence in my ability).

Cheers!~

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My charts have gone though some evolution since the first posts...

I'm really enjoying how I perceive market data through my 4 screens.
Two 27" Portrait, + 1 32" Landscape + 15" Laptop screen for order entry and journaling


(In this photo there's 3 27's but I only use the far left one when I hook up my other laptop)

My goal was to keep it as simple as possible with all the data I need to make decisions

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Lately I've been trading EURUSD

The left screen shows my profile charts. Top left is 24 hour profile, top right is whichever session I'm trading only (trading during europe hours this week) and the bottom chart compares the US sesh with EU sesh. Those charts show me important levels and help determine my biases.


You'll notice I'm using both the futures data and the spot data. I like to compare them..

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The center screen is my trigger chart and shows rotation data (zigzag), momentum (trix) and "bull/bear" bias (cci) plus there is a hma on the very bottom that I use to evaluate certain setups. Notice how the renko bricks color is unusual, its helpful for not going on autopilot, also they're very close in color so I'm more aware of the patterns. White dotted line is the Initial Balance (that's the first hour of trading with high volume, so first hour of Europe or US)


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The right screen has my footprint/s (left is spot, right is futures) and my "intraday map" chart. White line is vwap, turquoise line is the mid and a trix below.

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Grantx View Post
Ive started reading this and it is excellent. I highly recommend this book.
Thanks for the recommendation


Once you read this book you begin to realize that implied volatility is deeply reflects human biochemistry, and it's an expression of our DNA.

This is truly what Jesse meant when he said there is "nothing new under the sun" in markets.


"Persistence is very important. You should not give up unless you are forced to give up." -- Elon Musk
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TropicalTrader

Is your red and green ma the hull ma

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TropicalTrader

Is your red and green ma the hull ma

Yes

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Quotes of the week on Mental Toughness:


"I see too many mental snowflakes out there" - Merritt Black

"Mental toughness is not a learned skill, it's an earned skill. You earn mental toughness by experiencing difficult situations" - Todd Herman

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TropicalTrader View Post
Quotes of the week on Mental Toughness:


"I see too many mental snowflakes out there" - Merritt Black

"Mental toughness is not a learned skill, it's an earned skill. You earn mental toughness by experiencing difficult situations" - Todd Herman

is Merritt Black really a consistently profitable trader
I saw this interview where het told about his rough patch last summer

Or is he to be considered more as a label from SMB Capital to plug themselves in the market
Experienced, he is. but I see his name regularly around aspiring traders as their inspiration, the successful marketing of him as a brand kind of makes me question his abilities.

Difficult to distinguish the real ones from the scammers, there is a kind of conflict of interest being at these firms that also sell education like SMB, AXIA etc.

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Baudo View Post
is Merritt Black really a consistently profitable trader
I saw this interview where het told about his rough patch last summer

Or is he to be considered more as a label from SMB Capital to plug themselves in the market
Experienced, he is. but I see his name regularly around aspiring traders as their inspiration, the successful marketing of him as a brand kind of makes me question his abilities.

Difficult to distinguish the real ones from the scammers, there is a kind of conflict of interest being at these firms that also sell education like SMB, AXIA etc.

I thought exactly the same.

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  #84 (permalink)
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To Merritt's credit, I will say this: SMB offered a 1 hour coaching special one year, and it was right when Merritt was starting to develop the Futures desk. You don't get to do that with SMB unless you're extraordinary in a lot of ways. I was lucky to have a great conversation with him, and he offered a couple tools to help build good habits, which I have found helpful. Consequently, he opened the SMB Futures chat room to anyone who wanted to join, and I was a member for over a year. Since then, he has cultivated a successful group of traders that are most aligned with his methods and philosophy, and it became private. I don't use market profile as he does, so I chose not to continue at that point. However, during the year I was in the chat room, I observed Merritt's attitude and performance. He is a no nonsense leader, and operated the chat room with strict guidelines and rules congruent with developing serious traders. Merritt is very clear on his strategy, executes flawlessly without hesitation, and manages his trades appropriately. However, what makes him one of the best traders I've known is his mindset mastery - he's extraordinarily disciplined. A lot of things can contribute to a rough patch, but if anyone can come out on the other side of one, it would be Merritt. Of course this is just MY experience, but the key word is experience. Others may have a different opinion, which is what makes us all so valuable to one another.

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bandtasia View Post
To Merritt's credit, I will say this: SMB offered a 1 hour coaching special one year, and it was right when Merritt was starting to develop the Futures desk. You don't get to do that with SMB unless you're extraordinary in a lot of ways. I was lucky to have a great conversation with him, and he offered a couple tools to help build good habits, which I have found helpful. Consequently, he opened the SMB Futures chat room to anyone who wanted to join, and I was a member for over a year. Since then, he has cultivated a successful group of traders that are most aligned with his methods and philosophy, and it became private. I don't use market profile as he does, so I chose not to continue at that point. However, during the year I was in the chat room, I observed Merritt's attitude and performance. He is a no nonsense leader, and operated the chat room with strict guidelines and rules congruent with developing serious traders. Merritt is very clear on his strategy, executes flawlessly without hesitation, and manages his trades appropriately. However, what makes him one of the best traders I've known is his mindset mastery - he's extraordinarily disciplined. A lot of things can contribute to a rough patch, but if anyone can come out on the other side of one, it would be Merritt. Of course this is just MY experience, but the key word is experience. Others may have a different opinion, which is what makes us all so valuable to one another.


very nice response, thank you for sharing.

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Very interesting posts

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Great posts, thanks

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Before joining here I knew I was new but felt that the education I had received was adequate. After seeing all of these posts it is eye opening just how much I have to learn. Thanks!

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Today's post is about Staying In The Game

I believe there are 3 groups of traders concerning risk:

Group 1: "Risk Seeking" This is the category I am in. I have no issues pulling the trigger to get into a trade. I've had a habit of over-trading and I used to be an 'occasional revenge-trader'. When I would get into revenge-trader-mode I would ignore my risk-per-trade and risk-per-day limits. This was extremely destructive and I have blown up a lot of account due to this tendency and its repercussions. (example: trading well for 2-3 weeks and making nice profits, then one day making mistakes leading to risking too much and losing, then trying to get it back and blowing 1/3 to 1/2 the account in one day. The next day feeling really bad about it and throwing the risk plan out the window usually leading to more losses and bad feelings)

Group 2: "Risk Averse" This type of trader errs on the side of caution and hesitates to enter trades or talks themself out of trades, only to often see those missed trades go to their profit targets without being on board. This trader could also trade too small so they don't ever make much gains.

Group 3: "Oscillators" This type of trader flips between 'Group 1 tendencies' and 'Group 2 tendencies'. They may start out in 'Group 1' and then after getting their rear handed to them one too many times flip to 'Group 2', then get bored of it and flip back to Group 1 only to repeat the cycle.

Let me know if you can relate to this and if you're in the Group 2 camp, share more about what this is like.

Advice for 'Group 1ers':

Get a broker that allows you to set a max daily risk (either in $ or %) and then after reaching that limit any positions you have will be liquidated and you will be locked out until the next trading day. This can keep you in the game if you get into revenge-trading-mode, allowing you time to cool down and get your head straight. This one simple thing would have avoided me a ton of pain in the past..

Some futures brokers that offer Rithmic have this functionality available.

(If you are the type to benefit from this feature make sure its not the kind where you can just easily login to your account and flip a switch to start trading again.)

Cheers!

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Advice for 'Group 1ers':

Get a broker that allows you to set a max daily risk (either in $ or %) and then after reaching that limit any positions you have will be liquidated and you will be locked out until the next trading day. This can keep you in the game if you get into revenge-trading-mode, allowing you time to cool down and get your head straight. This one simple thing would have avoided me a ton of pain in the past..

For Certain Types of People (me? No-no. Couldn't possibly be talking about me!), this is about the worst approach there is - because my reaction would be to chafe under the restriction, even though it's self-imposed, and try to "cheat" around it.

What works - hard as it may be - is to actually fix the root problem; i.e., handle the emotional mess that causes under/over-trading, fear of risk, wild-ass gambling/YOLO bets, etc. If you don't handle that, no stop-gap measure will help - and you WILL wreck your account. But hey, if trading was easy, everybody would do it...

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oceansailor View Post
What works - hard as it may be - is to actually fix the root problem; i.e., handle the emotional mess that causes under/over-trading, fear of risk, wild-ass gambling/YOLO bets, etc. If you don't handle that, no stop-gap measure will help - and you WILL wreck your account.


This may be true -- however, professional prop traders all have a risk manager. To size up, they have to get authorization from the risk manager. The risk manager also sets daily loss limits. That is, the firm does not simply rely on traders fixing their problems -- they enforce it with software control that says "you're done for the day" ... and this is for traders who fall into the 'professional' category. So, a broker-enforced loss limit is absolutely a good idea, even if you have gotten things together mentally.

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josh View Post
This may be true -- however, professional prop traders all have a risk manager. To size up, they have to get authorization from the risk manager. The risk manager also sets daily loss limits. That is, the firm does not simply rely on traders fixing their problems -- they enforce it with software control that says "you're done for the day" ... and this is for traders who fall into the 'professional' category. So, a broker-enforced loss limit is absolutely a good idea, even if you have gotten things together mentally.

@josh, I think we're talking about processes that sound similar but have fundamentally different purposes. In the first case, the subject is traders who literally cannot control themselves - which would almost certainly not be the case with professional prop traders. The risk manager is not trying to crowbar a trader's emotional flaws; he's enforcing limits to protect the hedge fund from unwarranted risk as the company (and not the trader) sees it, and serve as the backstop to prevent criminal behavior as well as anything else that falls outside the rules. It's a complete separation of opposing imperatives, with the trader on one side and the risk manager on the other - which is not possible in the case of a trader who risk-manages himself.

In fact, we actually know what happens when you combine those roles in the professional world. Société Générale and Jérôme Kerviel, anyone?

Again, I'm not saying that my warning applies to everyone. But - as we know - the easiest person in the world to fool is yourself. And that's a risk that's always worth considering.

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josh View Post
This may be true -- however, professional prop traders all have a risk manager. To size up, they have to get authorization from the risk manager. The risk manager also sets daily loss limits. That is, the firm does not simply rely on traders fixing their problems -- they enforce it with software control that says "you're done for the day" ... and this is for traders who fall into the 'professional' category. So, a broker-enforced loss limit is absolutely a good idea, even if you have gotten things together mentally.

Thanks! That's what I was going to say. There are also some well capitalized individuals who choose to clear through a prop firm so that they get the benefit of the risk management team..

Sometimes trading events and our unconscious reactions to them can redirect the energy (glucose and oxygen) from our rational brain into the limbic system (monkey mind) or reptilian brain. This can lead to disaster. I'm sure many traders have blown up after being profitable for many months or even years.

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oceansailor View Post
@josh, In the first case, the subject is traders who literally cannot control themselves - which would almost certainly not be the case with professional prop traders.

I have first-hand knowledge that this point is not correct. I'm friends with a risk manager in a prop firm and he's told me many stories about having to call traders and tell them to get out of their positions or he would have to do it for them. Loss aversion is a powerful thing, especially when the monkey brain takes over.. The goal is to make sure you stay in the game and don't let one bad day end your career or set you back immensely. There are many stories of these blowups happening to pro traders.

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I have first-hand knowledge that this point is not correct.

I'm afraid you don't (your conception of the term "first-hand" is patently wrong.) What you do have is a case of a risk manager doing his job - as you say, "tell them to get out of their positions or he would have to do it for them". That's not necessarily - or I would presume even often - the trader being emotional; again, the trader's conception or tolerance of risk is not the same as that of the fund as represented by the risk manager.

Example: a trader who has a perfectly rational conception and tolerance of risk at, say, the $10M level - but has not yet reached that level of allowed risk by the fund. The trader may, from habit, put on a position that is too large per policy - but this has nothing to do with an emotional flaw; simply a mistake for which the risk manager is the backstop.


Quoting 
I'm friends with a risk manager in a prop firm and he's told me many stories about having to call traders and tell them to get out of their positions or he would have to do it for them. Loss aversion is a powerful thing, especially when the monkey brain takes over.. The goal is to make sure you stay in the game and don't let one bad day end your career or set you back immensely. There are many stories of these blowups happening to pro traders.

All of that granted - and all of those stories are the ones that are going to stick in your and everyone else's mind. What you're NOT hearing - classic case of filter bias - are the stories of thousands and thousands of traders who are going about their day calmly, quietly, doing their jobs within risk parameters and never hearing from the risk manager.

P.S. I will also note that this is a side issue that has little to do with my original point: trying to impose mechanical risk management on yourself as a "cure" for lack of self-control is likely to be futile for many people. We can dance all over the place and pick at imperfect semantics, etc., but that point remains.

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  #96 (permalink)
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Its hard to control emotions

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Many years ago when I first accepted the vast importance of psychology, I started to develop a combination trading tool that used emwave type inputs and combined it in a traditional trading indicator on a time series chart.

I actually had plans to market such a device with a trader here in the community which was a personal friend of mine.

I never followed through unfortunately.

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Holy crap! The ULTIMATE sentiment machine! Lol

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Baudo View Post
is Merritt Black really a consistently profitable trader
I saw this interview where het told about his rough patch last summer

Or is he to be considered more as a label from SMB Capital to plug themselves in the market
Experienced, he is. but I see his name regularly around aspiring traders as their inspiration, the successful marketing of him as a brand kind of makes me question his abilities.

Difficult to distinguish the real ones from the scammers, there is a kind of conflict of interest being at these firms that also sell education like SMB, AXIA etc.

I also wonder this?

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  #99 (permalink)
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TropicalTrader View Post
I listened to Trading in the Zone for around the 10th time over the weekend. It's such an e p i c book.. So densely packed with knowledge. If I could only have one psychology book, that would be the one..

A few passages I highlighted in my notebook:

"Consistency is a state of mind"

"The best traders aren't afraid, preventing them from getting reckless"

"What separates the best traders from everyone else is not what they do or how they do it - but rather how they think about what they do and how they are thinking when they do it".

"Fear is the source of 95% of trading errors"


"Your state of mind is a byproduct of your beliefs and attitudes. Winning is a state of mind just like happiness, having fun and satisfaction are states of mind."

"One habit many losing traders have is blaming the market. They shift the responsibility onto the market". (victim mentality)

"Taking responsibility is the cornerstone of a winning attitude"

"When you are winning, you are more susceptible to making a mistake. Euphoria makes you believe that nothing can go wrong".


The 4 Trading Fears:

Fear of losing money
Fear of missing out
Fear of being wrong
Fear of leaving money on the table


Remember that this is a process and usually requires a lot of time, consistent effort, mental toughness and constant repetition to re-train your minds (rational, limbic, reptilian) to be effective for trading. Since I started putting in full time hours 6 months ago and doubled-down on my psychology+workload, I've made huge improvements.. I've also beaten one of my nemesis', having "emotional blowup days".

Something else that's very useful I received from Dr. Steenbarger - make a list of what sets you off ("makes you" angry, frustrated, filled with regret, etc).. For me it was being "wrong" and too much stress (from putting on too big size, making mistakes, impulsive trading, taking a few losses in a row and losing confidence in my ability).

Cheers!~

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!



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oceansailor View Post
I'm afraid you don't (your conception of the term "first-hand" is patently wrong.) What you do have is a case of a risk manager doing his job - as you say, "tell them to get out of their positions or he would have to do it for them". That's not necessarily - or I would presume even often - the trader being emotional; again, the trader's conception or tolerance of risk is not the same as that of the fund as represented by the risk manager.

Example: a trader who has a perfectly rational conception and tolerance of risk at, say, the $10M level - but has not yet reached that level of allowed risk by the fund. The trader may, from habit, put on a position that is too large per policy - but this has nothing to do with an emotional flaw; simply a mistake for which the risk manager is the backstop.

P.S. I will also note that this is a side issue that has little to do with my original point: trying to impose mechanical risk management on yourself as a "cure" for lack of self-control is likely to be futile for many people. We can dance all over the place and pick at imperfect semantics, etc., but that point remains.


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.

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