Calling all "Senior Members T2W" Experienced traders! Help Newbies?

Chump

Yes I do agree with you, you identify and label the problem correctly. I think I was trying to say the same thing but from a different angle. However emotions are the major problem to overcome and this goes further than just the stops.

I think what I was trying to illustrate was that if you develop the skill in being able to keep to your stops you have discovered the knowledge of this importance and it tends to be this that places your focus on keeping to the stop and acquiring the skill to do so. When you reach this level of understanding then you have at this stage defeated the emotions surrounding this aspect of trading which is a major step forward.
 
Chump

Taking this further, I know in my own mind that I can keep to my stops and if the deal is right, wrong or right at the time of entry but then changes I will keep to my stop. I am satisfied from past experiences that I will no longer abuse my stops because time after time it has cost me. Each additional cost has gradually banged the message into my head so that it has stuck. It has also always affected my progress by making the losers eat away profits time and again. The message is well and truly drummed into me THE HARD WAY. I am convinced I have stops licked, my records confirm it as a result of my average loss is below my stop level.

How then can you deal with the emotions that question you when to get out and take profit. The emotions of fear and greed. Fear, that as soon as you let go of the deal the price will move further forward and you have missed that glorious profit. Greed, you hold on in anticipation of more only to see more given back. How do you optimise this skill.

I choose to see the profit whatever it maybe as a profit and further confirmation your entry was correct. My expectation is the ability to take something from the market rather than it all and as long as I can come back and repeat this process more than I lose then I am happy as my objective has been met. I look to see if I took profit at a time when I should have, such as when the price move has become over-extended or a trailing stop has been taken out or correct to do so from the chart. If not then I consider the exit an error but in all other cases I am happy even if it does go much further as it can.

Any suggestions regarding the emotions in this arena.

Best regards

Kevin
 
stevespray said:
My input on ‘stop psychology’……
.

A great post. Unfortunately, every trader has to learn this stuff for himself, all over again, if he is to learn it at all, which many never do.
 
chump said:
with respect kevin..the hardest lesson to learn is how to switch off your emotive senses..

And with respect, chump, I disagree.

First, the objective is not to switch them off. If anything, it is to let them go.

Second, if one approaches the task with the proper mindset, emotional responses are not necessarily made, and therefore are not necessarily pertinent. The two "lessons" I've provided that should be unlearned are biggies in this area, and yet, in their rush to move on to something that can be USED TODAY (or whatever it was that Bramble -- whoever he is -- said), most readers are already past it.

These issues are not dispatched in an afternoon. A couple of months, maybe, if then.
 
I'm not talking about emotive senses in the way you think..fear ,greed etc ....I am actually talking about your physical information processing senses and the way they don't give you the correct data because they are not trained in many people to operate without emotive interference... this is something to be unlearned...

I might also add that I think this such a basic step that until it is mastered through training there is a limit on how much further someone might go..
 
Chump

I think I understand what you are explaining. Are you saying that would be traders receive or see information before them and they are unable to react to this information correctly because either they do not recognise it for what it is because of an emotional block or disguise, and / or they see it for what it is but cannot bring themselves to react to it correctly because of an emotive pressure.

Could an example be they see an up trend in progress and enter a buy rather late in the trend. The price moves higher they are in profit. The trend is broken and fails sharply. They have seen and registered this but they now cannot let go because they want profit so they hold on knowing that they should have closed and walked away or shorted. Because they now realise they missed the best position to close and have failed to react they do not want to let go and begin to hope things will change.

regards

Kevin
 
chump said:
I'm not talking about emotive senses in the way you think..fear ,greed etc ....I am actually talking about your physical information processing senses and the way they don't give you the correct data because they are not trained in many people to operate without emotive interference... this is something to be unlearned...

I might also add that I think this such a basic step that until it is mastered through training there is a limit on how much further someone might go..

And what is the difference between an emotive sense and a physical information processing sense that operates with or without emotive interference?
 
Llew….

In response to your post number#443….

I understand what you are saying with regard to your mindset. Obviously everyone is slightly different and I’m sure that no two minds work the same way. Therefore it becomes almost impossible to pigeon hole situations by simply making blanket statements.

I’m happy to rattle off a few of my own personal theories on the subject of mindset etc. People may have different views and I’m more than happy to discuss specific issues that may arise from my ramblings.

Here goes……

Firstly, it is my belief that basic mind is divided into two sections, the conscious and the subconscious. I think Socrates touched on this subject in a previous post some while back. The subconscious aspect of the mind is the part which contains the survival instincts. The conscious aspect contains our reasoning and our rule keeping.

When we are first born and start to grow up, we start to develop different areas of our lives. Little by little we take on a personality, this personality is generally formed by our direct experiences which we have encountered up to that moment in time. These experiences will be pleasant experiences and also unpleasant experiences. It all goes in the mix and our persona is born.

Over time we learn to cope with the different situations which life throws at us. For many the first day at school is an early challenge which we have no choice but to tackle. Some children do it easily whilst other struggle with school until the day that they leave. Most people come to terms with ‘school’ and going to school moves firmly inside a child’s comfort zone. Going to school becomes the norm and they have no problems or fears with attending.

Variations of this analogy can be repeated across many areas of the human’s development as a person. First day at a new school, a job interview, starting a new job, learning to drive, buying your first car, meeting a new girlfriend/boyfriend, buying a house etc are all areas where we are forced to move outside what is comfortable for us. Again, over time, we learn to deal with each particular situation in our own way and for the most part, these situations, which we may ultimately tackle several times in our lives, become easier to deal with. So times they get so easy that we regard them as no challenge whatsoever, they move firmly inside a comfort zone, you always feel in control dealing with a particular situation.

Sometime however, the reverse is true and comfort zones get smaller rather than larger. For example if a child gets bitten by a dog at an early age. If no therapy is provided for the child then he or she is likely to grow up with a firm dislike for dogs.

Basically, as we develop we develop loads and loads of different comfort zones all relating to our experiences.

This is where it gets interesting. Whilst we stay within these zones we are comfortable and handle situations with our conscious minds. However, from time to time, in everybody’s lives, there are times when we are forced out of a particular comfort zone. This could relate to anything but most of the time it will be things that just occur randomly in everyday life. A bad experience in the car for example. In these situations the subconscious mind takes over. The main trait of the subconscious mind, as we already mentioned, is self preservation. It will act in a manner which it perceives as being best for you at the time. This will normally be to either preserve you in some fashion or to remove you from some situation which is causing distress. For the most part, in the outside world, this has served man (and indeed woman) for thousands of years. In every human being the subconscious has a proven track record of doing its job well. If it didn't you probably wouldn’t be reading this now, you’d have been run over by a car or something, probably many years ago.

It is my belief that people over-estimate how comfortable they are in their perceived trading environment. People’s comfort zones are actually far smaller that they realise, even if they realise they have a comfort zone or not as the case maybe. However you look at it, the net result is that people are easily pushed outside their zones. This results in the subconscious mind starting to take over. This is bad. Why ? Because the subconscious mind is looking to remove you from danger or stress. The markets are full of FEAR and of GREED. In my opinion, both of these emotions can easily push many outside their comfort zones. Fear is an obvious cause of stress as the two are closely related. Greed is slightly different. We need also to look at ‘Greed’. Problems surrounding how we deal with greed prevent us from running winning positions which increases the size of our profitable trades. In my opinion, the emotion of greed, within the trading environment is almost the emotion of fear. Is it not that greed is a fear that you might loss what you have so far won (in respect of the trade that is winning but yet to be closed) ?
So, as I have so far stated, could it be that both fear and greed will push us outside of our comfort zone, and, in such a situation, our subconscious mind impacts our trading decisions ? On this basis, allowing our subconscious mind to control our choices is almost bound to result in abject failure, as, in order to succeed, you should not be following the emotion of the larger crowd. You succeed in this game by buying low and selling high, however, your subconscious, in order to protect you, will make you do the opposite, you will sell your assets when prices are falling and buy them when prices are rising. You will act entirely with ‘the crowd’ and as such will just surrender you money to the informed few.

In order to overcome this problem you need to do two things. Firstly and most importantly, you will need to remain in control in a much higher percentage of situations. The only way to do this is to increase the size of your comfort zones which relate to trading. Essentially this will cut out the times when your subconscious takes control. This will lead to much better decision making in the longer run which will stop you running with a crowd which are high percentage losers. Secondly, and this is much harder, you can try and train your subconscious. This can be achieved. Advanced driving courses achieve this to a limited extent. They teach you to release brake pressure in a skid (when normally your subconscious makes you press harder), they teach you about remaining in control or regaining control when skidding sideways etc. There are other courses which people take or are sent on which helps them make the right choices when subconscious takes over. If you listen to airline staff are perhaps the best example of this.

For the trader there maybe other ways in which he or she can remain in the comfort zone for longer. For some people the value of money will always have meaning regardless of how much they have to play with. If this is the case then you will have an idea of how much you could reasonably face losing in one bad trade (regardless of money management, it could be less, it could be more). I would suggest that you should never place yourself in a position where you get anywhere near that endurable loss as you will be over estimating your comfort zone again.

Many people fail at trading, not just because of poor money management skill, but also because they can not adequately implement the rules which they believe that they can follow. The only way you will achieve long term success is by training yourself to stay in control for longer. With that in mind the only way is to move forward is to start trading with very small stakes. This is especially true if you are someone who sees that they will always have meaning for the value of money.

Wishes,
Steve.
 
I'm struggling for time here ,but I will try to give an example but will not be able to respond for awhile... I've used this example before so if you have already read it move on....

some years ago I looked at a house for sale that was in the most horrendous hygienic condition ..truly gross and it could not sell... the reason was people were going in and what their physical senses pickedup up they could not separate from the mechanics of what was relevant to the buying decision ... which simply put was was would it cost to put in reasonable shape and what would it yield thereafter.... so what I am saying is their physical senses brought forth an irrelevant emotional response that drove their subsequent action... I see parallels in the way people view charts and indicators etc......more being better when in fact they are probably causing more of a distraction to their ability to process data objectively...not a simple issue to explain
 
Gardan said:
Hi Chartman, just since you have mentioned multiple nik's. As DaveJB has mentioned in post 357 of this thread my confusion thinking the thread on the forex was relating DaveJb to Zenda.Was now cleared up .
Forgive me DaveJB but the idiot I am, I am still confused and apologise unreservedly if this is upsetting.

However I did ask you in an earlier post DaveJB, if you thought Chartmans post number 32 was directed at your post number 31. I would be extremely grateful if we could but this to bed and with some simple clear answers if possible.

Chartman, Your post of 32 in which you mention "Toys and Pram" and the only reference I can find to this in any of the posts prior to your comment is in DaveJB post "To throw in the Teddy"
which is directly below DaveJB's. Can you confirm this is just a double coincidence.

DaveJB, Sorry again but this is an important point for us Newbies in my opinion, since I asked a direct question on this and as you are a Teacher, I thought your answer a little vague for a Teacher. I am sorry but I am still confused.

My Intentions are not to disrupt this thread and if anyone believes this post is doing just that I am happy to remove it.

Regards

Gardan,
ref your #447 - my apologies, I seem to have been mistakenly identified as Zenda somehow, in the past... I'm actually on holiday currently, and launching a new program etc so whilst I'm on here quite frequently it is for a few minutes at a time, which means the flow of discussion on a thread gets a bit disjointed and in this case I overlooked your question.

I am not Zenda. Looking back at 31/32 I see what you mean - I didn't actually twig the first time around, but it does indeed look like Chartman was suggesting that I was Zenda... he started that post by saying 'well Zenda' so I assumed that is who it was aimed at... I DID wonder at the time about it, as I couldn't see a post from Zenda, but assumed it was just one of those things.
Chartman being a mod I'd have thought he could check identities like that - Skim does, so if Chartman actually is at the root of this Dave/Zenda confusion I wish he'd have checked a bit more first.

"Teddy" - that was a reference to how the Basement thread ended, Socrates posted in a manner I found somewhat immature, phrases referring to throwing teddy/dummies out of cots/prams etc seemed appropriate.

There is no need to apologise, if posts by others have led you to assume I am using multiple nics, and resortting to subterfuge to make invalid points then that is hardly your fault - neither do I blame Chartman, or anyone else for it, it is the fault of the board setup that this is possible... it may be that T2W is technically unable to prevent it, so even that isn't a criticism, just an observation.

As for vague - I did post earlier that I was definitely against multiple nics, and I was not doing that myself , what exactly is vague about that I'm, err, a little vague? <g>

Dave
 
stevespray said:
Many people fail at trading, not just because of poor money management skill, but also because they can not adequately implement the rules which they believe that they can follow. .

If I may make one small comment.

There is at least one step below "implementing the rules", and it's a rather large one:


1. Study price movement.

2. Develop a set of preliminary hypotheses which take advantage of these movement and test them according to standard methodology.

3. Decide what strategy will best take advantage of what you think you've found.

4. Decide what tactics you're going to employ to implement it.

5. Carefully define the setups which put these tactics in play.

6. Develop a trading plan around this strategy, these tactics, and these setups.

In my experience, beginners rarely do any of this. They borrow something from somebody or somewhere and perhaps modify it somewhat, but they rarely go through the process themselves (it should come as no surprise that those who do go through the process succeed and that those who don't, struggle, often to the point of being driven out of the market). Some just try whatever seems like a good idea and hope for the best..
 
Steve

An excellent post. We are all different are we not, that is what makes us unique therefore it does not follow that the best way to take control or stay in control will be the same for everyone. We all know for example the rule of cutting your losers short and allowing your winners to run. This as you highlight through greed and fear can be extremely difficult. Some might use a trailing stop, others might use a pre-determined target/s, others more capable will be able to play until the money starts to fade and the pros are leaving, some may sit on there hands until the chart says its over.

It is said from a mathematical assessment that if you take something out of the deal early and let another part carry-on you are not trading to optimum performance because you are not letting your winners develop and are keeping most of your capital in at the riskiest time. However it could also be said that if an individual can master those fears and greed by taking half profit at an early stage the fear of losing is lost because something has been obtained. The greed is satisfied because you still have something in the market to gain from any further development. Yes it is not the best way by any means but if an individual can deal with the emotions to his/her benefit in this way then it is the right way for THEM and that is what is important in trading.

As traders it is very important to establish the correct way a market works and to align our thinking to this way, but that in itself may not be enough to deal with the market problems and each individual has to find there own way.

I have no previous knowledge in this area of study other than from trading so I could be spouting a load of rubbish in terms of 'correct thinking' but I would suggest that if each trader can think correctly towards the market then they are in a position to identify there short-comings and how they feel best able to cope and deal with them.

I do however understand and fully accept from a monetary concern that the smaller the % of your capital at risk the easier it becomes to maintain control. The discipline may come from traders starting at the lowest risk possible and only increase when they have reached a very high multiple capital BALANCE OR NUMBER OF DEALS OR PERIOD OF TIME to justify increasing through measured progress.

Regards

Kevin
 
chump said:
. so what I am saying is their physical senses brought forth an irrelevant emotional response that drove their subsequent action... I see parallels in the way people view charts and indicators etc......more being better when in fact they are probably causing more of a distraction to their ability to process data objectively...not a simple issue to explain

Which is what I was saying earlier: the objective is not to turn off or suppress the emotional response but to let the emotions go so that there is no emotional response to turn off or suppress. If putting it in Star Wars terms makes it more clear, then so be it.

If there is any sort of "battle" going on with regard to stops or triggers or any other aspect of the trading process, then the trader most likely has yet to come to terms with whatever issues he has regarding failure and loss. Either that or he has not gone through the steps I provided above regarding preparation.

Emotions should not be an issue because there shouldn't be any to become an issue.
 
dbpheonix

Exactly and I think in some part this links to Chumps last post.

People may see what is required to improve the property / trading but they also see a great deal of hard work and effort, they do not want that, they want a quick root to easy riches and so go elsewhere in search of the property / and in trading look for other sure fire schemes rather than make the commitment needed.


Regards

Kevin
 
kevin546 said:
dbpheonix

Exactly and I think in some part this links to Chumps last post.

People may see what is required to improve the property / trading but they also see a great deal of hard work and effort, they do not want that, they want a quick root to easy riches and so go elsewhere in search of the property / and in trading look for other sure fire schemes rather than make the commitment needed

Possibly. But I don't see how an appraisal of what it will cost to improve a property and how long it will take to realize a return on investment -- if there ever is a return on investment -- constitutes an emotional response.

My point is that there need be no emotional response at all. If there is, then there are fundamental issues that have not been addressed and put to rest.
 
DBP,
we may simply have a language problem here ,but for clarity when you say "let go" what process do you envisage someone goes through for that action to occur ?

When I stated "switch off"... I was alluding to the view that this is a matter of training yourself to be able to do that and I am unsure what you mean by the expression "let go"
 
I see your point and agree that the answer is to have no emotions, with no emotions to hinder your trading you can progress providing your development of your method is actually correct. There is far more chance it is if it has been produced without emotions.

In the point above I was trying to illustrate some people just cannot be bothered to work for something, they want a quick fix. A friend of mine was impressed with some profit I obtained recently and wanted to be shown how I went about my trading. After this his response was could I trade for him. he did not wish to do it himself because he could see it involved a commitment on time and effort which he did not wish to give. Easier to try and get someone else to do it. No commitment.
 
dbphoenix said:
If I may make one small comment.

There is at least one step below "implementing the rules", and it's a rather large one:


1. Study price movement.

2. Develop a set of preliminary hypotheses which take advantage of these movement and test them according to standard methodology.

3. Decide what strategy will best take advantage of what you think you've found.

4. Decide what tactics you're going to employ to implement it.

5. Carefully define the setups which put these tactics in play.

6. Develop a trading plan around this strategy, these tactics, and these setups.

In my experience, beginners rarely do any of this. They borrow something from somebody or somewhere and perhaps modify it somewhat, but they rarely go through the process themselves (it should come as no surprise that those who do go through the process succeed and that those who don't, struggle, often to the point of being driven out of the market). Some just try whatever seems like a good idea and hope for the best..

dpb

hear, hear ( have I said that before :LOL: )

There is a 7 which makes it a continual loop. ie: Go back to 1 regularly and confirm (and re-confirm) 2 to 6.

good trading

jon
 
If the conscious mind's desire conflicts with the unconscious mind's desire the unconscious will win in the long run because it is more powerful.
The conscious mind may win a few battles but it has no chance of winning the war.
The only chance the conscious mind has of winning the war is to recruit the unconscious mind on it's side.
The concerns of the unconscious mind must be dealt with, as there is no way that circumventing (looking for a holy grail certainty) or subjugation of the unconscious can work.
 
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