Psychology - 1) Size of account 2) Buy or Sell

This posting is about the psychology of trading. I am just a man in the street and have no training in psychology, and I am just kicking around ideas here.

1) I think it was Malcolm Pryor who wrote that when your trading account gets to a certain size, it can affect the way you trade, e.g. a large pot can make you a bit more reckless and greedy, so basically only keep a certain amount there, and when you make a large win, transfer some out into somewhere safe (e.g. Icesave ... ), to keep the trading balance constant.

I have to say that after one winning streak, I did notice something of the sort. Started increasing my £ per point, and then wondered why the losses were increasing at such a rate of knots.

2) Sell versus buy. I have seen it written that people find it easier to buy than to sell (i.e. easier to go long than to go short), even though in principle, it shouldn't be any more difficult, if the direction of the market is clear.

Has anyone actually found that? Again, I think I have done, even when trading in a market where the short direction was the obvious one. Part of it is probably that falls in price just tend to happen more rapidly than rises in price, but is there any more to it than that?


Do any Brits feel unpatriotic shorting the pound, or Americans shorting the dollar?
(I don't, I should say right away ).

montmorencyt2w said:

This posting is about the psychology of trading. I am just a man in the street and have no training in psychology, and I am just kicking around ideas here.

1) I think it was Malcolm Pryor who wrote that when your trading account gets to a certain size, it can affect the way you trade, e.g. a large pot can make you a bit more reckless and greedy, so basically only keep a certain amount there, and when you make a large win, transfer some out into somewhere safe (e.g. Icesave ... ), to keep the trading balance constant.
Total bullocks on the first part of that. It only applies to a gambler. Agree though about taking some out... Never know if they are due to go bust or not. Mind you banks are not the safe haven they once were.
I have to say that after one winning streak, I did notice something of the sort. Started increasing my £ per point, and then wondered why the losses were increasing at such a rate of knots.
Once that starts. Drop back to lower amounts, then try again, Don't know why but just doubling size is not easy.
2) Sell versus buy. I have seen it written that people find it easier to buy than to sell (i.e. easier to go long than to go short), even though in principle, it shouldn't be any more difficult, if the direction of the market is clear.
Again total bullocks. You should trade what you see. Simple as that. Only shares people may be ingrained with the 'buying' only theory. If anything I prefer to 'short' trade. But I am only 5'4" tall so this might have something to do with it!
Has anyone actually found that? Again, I think I have done, even when trading in a market where the short direction was the obvious one. Part of it is probably that falls in price just tend to happen more rapidly than rises in price, but is there any more to it than that?
Falls happen a lot quicker (In any walk of life) doesn't it make sense to learn the short side first?

Do any Brits feel unpatriotic shorting the pound, or Americans shorting the dollar?
(I don't, I should say right away ).

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Why? What has your country done for you? It is a market. You buy, you sell, depended on market conditions and your view of market conditions. Supply and demand pure and simple.
You cannot claim to be a patriot any more. Try putting a union jack up on your front lawn, see how quick the old bill respond then. (You have to take that down, you might upset the ethnic minority and they might complain) For **** sake!!! (Getting the **** kicked out of you in the street? Fill out a form and wait and wait for the police to attend).

This whole mess everyone is in now is down to your masters. 6 months ago, everyone was happy, nothing has changed. We are told things have changed. You house is worth less, you get less on your savings. WHY?
Because you are told there is now a problem. WTF! Who caused the problem?

Your masters caused the problem. The people that control the money, lent it to people that had no hope of paying it back if there was even the slightest blip in interest rates.
Gave mortgages to people that were on fixed incomes and couldn't afford the repayments in the first place. How stupid is that?

And then they turn round and say. (And this is what really gets my goat), is that the traders shorting the market are the ones that have caused all the misery!).
Markets are self policing! They have been around before politicians. Politicians? They are the idiots!

:whistling Phew! thanks montmorencyt2w glad I got that off my chest.

options said:

Why? What has your country done for you? It is a market. You buy, you sell, depended on market conditions and your view of market conditions. Supply and demand pure and simple.
You cannot claim to be a patriot any more. Try putting a union jack up on your front lawn, see how quick the old bill respond then. (You have to take that down, you might upset the ethnic minority and they might complain) For **** sake!!! (Getting the **** kicked out of you in the street? Fill out a form and wait and wait for the police to attend).

This whole mess everyone is in now is down to your masters. 6 months ago, everyone was happy, nothing has changed. We are told things have changed. You house is worth less, you get less on your savings. WHY?
Because you are told there is now a problem. WTF! Who caused the problem?

Your masters caused the problem. The people that control the money, lent it to people that had not hope of paying it back if there was even the slightest blip in interest rates.
Gave mortgages to people that were on fixed incomes and couldn't afford the repayments in the first place. How stupid is that?

And then they turn round and say. (And this is what really gets my goat), is that the traders shorting the market are the ones that have caused all the misery!).
Markets are self policing! They have been around before politicians. Politicians? They are the idiots!

:whistling Phew! thanks montmorencyt2w glad I got that off my chest.

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We seem to agree on my last point then Options! (and of course, it is often in a country's own interests for its currency to fall in value, and central banks and governments sometimes try to make this happen).

Options, I take it that, like me, you also think the ban on short-selling was a load of bosh then? :cheesy:

montmorencyt2w said:

We seem to agree on my last point then Options! (and of course, it is often in a country's own interests for its currency to fall in value, and central banks and governments sometimes try to make this happen).

Options, I take it that, like me, you also think the ban on short-selling was a load of bosh then? :cheesy:

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A simple 'Clutching at straws' approach. And trying to blame someone else.

There will be a limit to how much people can be taxed and how much they can be pissed upon. Regardless of race, colour or creed. We are ruled by a few. And all they do is take.
This whole debacle was made by a few people so they could become richer. History repeats.

The only mistake they made was allowing the internet and knowledge to arm the people.
(**** me I sound like depth charge!)

2) Sell versus buy. I have seen it written that people find it easier to buy than to sell (i.e. easier to go long than to go short), even though in principle, it shouldn't be any more difficult, if the direction of the market is clear.

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With a short trade you have the added advantage of earthquakes, but you must get the timing right.

new_trader said:

With a short trade you have the added advantage of earthquakes, but you must get the timing right.

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Okaaaaaaaaaayyyyyy! Could you let us know when the next earthquake is upon us!
I will try to get an order in...

Have you been drinking???

montmorencyt2w said:

1) I think it was Malcolm Pryor who wrote that when your trading account gets to a certain size, it can affect the way you trade, e.g. a large pot can make you a bit more reckless and greedy, so basically only keep a certain amount there, and when you make a large win, transfer some out into somewhere safe (e.g. Icesave ... ), to keep the trading balance constant.

Click to expand...

Actually, a lot of people get more risk averse as their trading balance increases because losing 10k is different than losing 1k (adjust for the amount of loss which would make your knees wobbly).

2) Sell versus buy. I have seen it written that people find it easier to buy than to sell (i.e. easier to go long than to go short), even though in principle, it shouldn't be any more difficult, if the direction of the market is clear.

Click to expand...

Sometimes traders actually get "imprinted" by an early experience in the market and will end up being more comfortable trading one way or the other. In my case, I witnessed the Crash of '87 very early on in my trading development and that helped at least make it easier for me to thinking about shorting.

I have no problems shorting dollars, if not it will be shorting us.

All the currencies are fake (have no intrinsic value) and based on usury (created out of debt and generates interests) anyway, which has never benefited mankind. The more money they print, the worse off we are. Their is nothing morally valuable about being patriotic about paper money being printed by private hands under the guise of government.

Check out this currency movie. helps with proper "fundamental" approaches to forex.

If you want to adopt the right psychology for trading successfully, and as problem free as possible, please examine my signature below.

"Empty your mind, be formless, shapeless - like water. Now you put water into a cup, it becomes the cup, You put water into a bottle, it becomes the bottle, You put it in a teapot, it becomes the teapot. Now water can flow or it can crash! Be water my friend."

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Really think about what it means and how it is applicable to trading, other jobs, sports and other aspects of life etc.

This i believe is Bruce Lee quote. Though initially i didn't think it through fully, & so did not see its full applicability to trading. (maybe i'm a bit slow or dyslexic!), as its pretty straight forward stuff!

For me, its meaning is to have an open mind about an outcome that either you do not have any control over, or that you do not know what it will be yet. This may be a trade, a free-throw in basketball, a job interview etc. Be open minded & ready and willing to adapt to the situation as it unfolds.

Do not hold preconceived ideas, superstitions etc. that clog your mind with baggage and ultimately impede performance.

If you have a plan, trade it and stick to it at all times. Do not let yourself bail out of trades early, or not enter them at all - due to a "hunch" that it will go wrong. If it goes right, you have missed your hard earned profit opportunity and will likely have to wait some time for another. In the meantime you are more likely to force a less good trade opportunity in a game of catch up.



Be formless, and shapeless.
Formless - Neither let success or failure affect your psychology. Do not become elated by a string of winners, nor down in the dumps after some losses. Try and stay on an even keel at all times, ready to do X or Y without delay and hesitation as the plan dictates at the next opportunity.
Shapeless - Be ready to adapt as the situation dictates...

Think - Steve Davis (when he was good ) - winning or losing a snooker match, his expression & demeanour hardly changed at all. He was in full control of his emotions and had a completely open mind about the outcome - no matter how far behind he was. Just think about how often he'd frustrate opponents by coming back to the table when many points behind and needing many snookers etc. He may well have lost, but he gave it a try anyway.....

Water in the candles becomes the candles.
Or, water in the framework of a winning trader, becomes the winning trader. Just need a winning plan and winning psychology to define a winning trader!

Detach yourself from emotionality and beome like water, formless & shapeless!