Psychology... the poll

This is a discussion on Psychology... the poll within the Psychology, Risk & Money Management forums, part of the Methods category; I am interested to see how many of you (particularly the successful traders: those who are consistent in their profit) ...

View Poll Results: Does psychology matter in trading?
Yes, without it, you are doomed to failure. 113 87.60%
No, it is overhyped. 16 12.40%
Voters: 129. You may not vote on this poll

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Old Mar 16, 2008, 11:13am   #1
 
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Psychology... the poll

I am interested to see how many of you (particularly the successful traders: those who are consistent in their profit) actually believe that psychology (issues such as discipline, greed, fear, excitement, etc) can affect whether you succeed or fail in this game.

I've made it list who chose which option; please add your thoughts below.

NOTE: The first question is really asking: Does psychology have a strong influence on your success or failure in trading?
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Last edited by shadowninja; Mar 16, 2008 at 12:54pm.
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Old Mar 16, 2008, 11:25am   #2
 
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I voted for doomed but I believe that if everything went well and one experienced no issues, conflicts, or bad habit developments the it might not be an issue.

The problem is that I don't know of anyone who I've met who had such a smooth path from conception, through research and planning, to execution that they didn't have some problems. I think that with really good training and support it could be avoided by many.
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Thanks! The following members like this post: nkruger
Old Mar 16, 2008, 11:30am   #3
 
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Psychology and Discipline are THE most important things in trading - !!

without those two - you are DOOMED.........!!


The markets ARE, HAVE ALWAYS BEEN and ALWAYS WILL be about - upside POTENTIAL - V - downside RISK - !!

or most commonly called GREED - V - FEAR - !!
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Old Mar 16, 2008, 11:42am   #4
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I think without discipline you are doomed.

But without psychology ???????

What is that supposed to mean anyway ?

Everyone has psychology in one form or another so the question is somewhat ambiguous.
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Old Mar 16, 2008, 12:06pm   #5
 
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the MOST COMMON mistakes traders make - taking profits too early and letting loosing trades RUN - can both be pinned down to either your psychology or bad discipline..!!

" I must take this profit before the market takes it back " (FEAR)..? - (if you get on a bus and the destination is 20 miles away - (a trend) - why do people get off at the 1st stop)..?
The reason your making money is because you got on the CORRECT BUS... !!


ADMITTING YOUR WRONG - can be VERY hard to do ... !! When you get out of a trade - NEVER LOOK BACK...... !! - when you do - THAT is how a bad habit always forms !! - you look at the trade you just got out of for a small loss (the first loss is usually the smallest), and see had you actually stuck with it for another couple of days you would have made money .. !!
You get frustrated and this gives you ammunition to stick with the next LOOSING TRADE LONGER - but that one - DOESNT COME BACK... !! - Now youve lost MORE money on that trade than you would have BEEN UP if the trade had been in profit in the first place... !!
Now you need a few winning trades to make up for that ONE LOOSER...... !! - viscious circle... !!

and that stems from GREED....... !! - ALL PSYCHOLOGY....... !!

Every financial disaster in history, (1929 crash, Black Wednesday /Thursday, Dot Com boom/bust/ the run on Northern Rock etc - all have had " some element " of human psychology contributing do it.. !!

Last edited by theroguetrader; Mar 16, 2008 at 12:23pm.
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Old Mar 16, 2008, 12:52pm   #6
 
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Quote:
Originally Posted by yacarob1 View Post
But without psychology ???????

What is that supposed to mean anyway ?

Everyone has psychology in one form or another so the question is somewhat ambiguous.
Yes, I spent some time trying to reword it. It is vague even if I put a "good psychological make-up". Care to suggest a rephrase?

That said, it could mean, "Does it have a strong influence on your success?"
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Old Mar 16, 2008, 12:57pm   #7
 
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Psychology Definition Altered
Let's return now to the dictionary definitions of "psychology".

From the Oxford American Dictionary:

1. the study of the mind and how it works.
2. mental characteristics, can you understand his psychology?

That's fine.

From the Concise Oxford Dictionary:

1. the scientific study of the human mind and its functions, esp. those affecting behavior in a given context.
2. a treatise on or theory of this.
3.a. the mental characteristics or attitude of a person or group
3.b. the mental factors governing a situation or activity (the psychology of crime)

Definition 1 has slyly added the idea of "affecting behavior". The original definition had nothing to do with this. The wish to control the minds and actions of others has entered into the equation.

From the American Heritage Dictionary:

1. The science that deals with mental processes and behavior.
2. The emotional and behavioral characteristics of an individual or group.

These definitions have further altered the true meaning. In actual practice, modern psychology deals almost exclusively with physiology (brain chemistry, neurology, genetics) and the behavior of the biological organism (stimulus-response), completely disregarding and ignoring the mind (man's inner self, and more to the point, man's true and vital self). The dictionaries will sooner or later remove the concept of "mind" completely from the definition following the lead of "official" psychology as taught in western universities and colleges.

Members of the educational establishment write the dictionaries, and the educational establishment is entrenched in modern psychological theories. Let's return to the correct definition of the word.

Adhering to the strict definition of the word, psychology would involve the study of man's invisible world as described above, and nothing else. By definition this is what the study would deal with. This is not an opinion or bias. This is according to exactly what the word means and nothing else. Of course, relations to behavior could be studied, and relations to brain activity could be studied, but the subject in itself, by definition is or should be the study of the mind or soul. A more correct name for the modern subjects of psychology and psychiatry would be "people control" because that's what they actually are. They are subjects involving how to alter thoughts, attitudes and behavior. The intention is to control people. That in a nutshell is the purpose of behaviorism. Naturally governments and totalitarians love the subject. They also fund it in large way.


Psychology - It's Definition and Actual Meaning
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Old Mar 16, 2008, 1:52pm   #8
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Shadow,

From my own experience, I have a good trading method but the psychological shortfalls (why do hold losers?) totally undermine it.

This is reflected in the idea that two people using an identical system will produce different results.

Grant.
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