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"This forum is where successful traders spend most of their time and were struggling traders never visit. The psychology and money management forum is where you learn to become a profitable day trader"
The Psychology Of Trading is about understanding the difference between how a "winner" and a "loser" thinks and acts when trading.
The most important aspect of trading is "Profit".
Too many traders spend too much time talking about things that have no real bearing on "Profit".
This section is to discuss the "differences" with a view to understanding why they exist.
Ingredients:
Take 1 quarter.
10 imaginary Dollars.
Rules:
Start flipping the coin, and call head or tails and try and get it right before it hits the table.
The First flip a 1 dollar bet.
After that you can double your bets if you win or lose according to your guess.
You add/subtract from the imaginary $10 bill.
Additional Rules:
You MAY double your wins or loses any time, but you don't have to as you can play 1 dollar bets.
Let's say you are up 3 dollars, then you can bet the whole $3 on the next flip.
If you are down $3 you can also bet the whole 3 again to make it back. if you lose you are down 6 now,etc.
Goal: Get to $40 with the minimal amount of flips and if you get to Zero or minus..Game Over.
The idea behind the game is to illustrate the psychology of adding leverage, randomness, greed and the "revenge trade".
It's the same ingredients we tackle day to day in trading.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
I have a much better game for anyone who is serious about daytrading!
We will take it that one has sufficient funds to meet the minimum requirements set by the brokerage firm, and the pattern trader rule, if applicable (not applicable to CFD accounts).
Take $2,000, and tell yourself that this $2K has to last you as long as possible - the "target" is to find out how many trades you have done by the time you lose your $2K.
When your $2K is gone, if your "target" is long, you are well on your way to learning what is required, but if your "target" is short, it may be wise to reconsider taking up daytrading as a full time job!
The winner is a positive thinker, who knows that something happens for a specific reason, and, who also knows that he/she does not have to know what the specific reason is!
The Loser
The loser is a negative thinker, who thinks that everything happens for many reasons, and, who also thinks the he/she has to know all of the reasons for everything that happens!
In the interest of learning, I am going to try and keep away from the "usual" stuff, and try to debate in plain and simple words!
To become "a winner" at trading, and more importantly, to stay a winner, is not an easy task.
We all know how important money management is, and in a nutshell, what this means is that if you risk too much on your trades, then, you will more then likely lose most, if not all of your money.
So, does this mean that good money management will make you money - far from it is probably the correct answer.
If a person does not fully understand what they are doing, then it is going to be very hard for them to do what they are doing, correctly!
Thus, how does a person "trade" correctly?
Not an easy question, and, one that will have many answers, but, only a few answers will actually make a difference to the outcome!
Thanks! I would recommend to use this along with sim trading, and I mean it.
This is the one game that shows that doubling down to get out of a loss rarely works.
M
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
