Agree
While Trader’s Psychology is my theme, I cannot emphasise enough that having a Trading Edge in the Financial Market would also require traders to have Discipline, a rock solid Risk Strategy and sound knowledge of Technical Analysis.
Trading Psychology - Mental State, Emotions and Lessons
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Agree
While Trader’s Psychology is my theme, I cannot emphasise enough that having a Trading Edge in the Financial Market would also require traders to have Discipline, a rock solid Risk Strategy and sound knowledge of Technical Analysis.
Video: You’ve Got to be Hungry to Succeed!! by Les Brown
Let’s end the month with some very inspirational video(s) by Les Brown. If you want to succeed, hear what he has to say.
Enjoy!!
Part 1
http://www.youtube.com/watch?feature=player_embedded&list=PL1335B65086CD151E&v=R312Lszc4b0
Part 2
http://www.youtube.com/watch?feature=player_embedded&v=EIgSAg4hPCY
Let’s end the month with some very inspirational video(s) by Les Brown. If you want to succeed, hear what he has to say.
Enjoy!!
Part 1
http://www.youtube.com/watch?feature=player_embedded&list=PL1335B65086CD151E&v=R312Lszc4b0
Part 2
http://www.youtube.com/watch?feature=player_embedded&v=EIgSAg4hPCY
A trading plan is what all traders who fail have not prepared. A thorough detailed and comprehensive plan is required..... guaranteed failure if a person does not have one that is written and followed.
For me with manual trading, I still prefer a simple charting system that can be used for Forex as well as Stocks. Basic T/A and momentum indicators do the trick with short term trading. I like to concentrate on swing trades of 1-5 days as I find these the easiest to hit.
Of course, there is always the automated route as well, which some people are having a ton of success with
The nice thing there is it takes psychology, one of the most difficult aspects of trading, totally out of the equation.
Of course, there is always the automated route as well, which some people are having a ton of success with
The nice thing there is it takes psychology, one of the most difficult aspects of trading, totally out of the equation.
Hi, you're asking a really broad question. Happy to help but I think you'll need to be more specific.
For now, I can only recommend reading babypips, it's a great starting point for your trading journey.
http://www.babypips.com/school/
all the best!!
“The more you understand the concept you are trading, how it might behave under all sorts of market conditions, the less historical testing you need to do.”
Tom Basso
Tom Basso
one man's meat is another man's poison. There are too many ways to trade the market, i suppose all we need is one that works.For me with manual trading, I still prefer a simple charting system that can be used for Forex as well as Stocks. Basic T/A and momentum indicators do the trick with short term trading. I like to concentrate on swing trades of 1-5 days as I find these the easiest to hit.
Of course, there is always the automated route as well, which some people are having a ton of success with
The nice thing there is it takes psychology, one of the most difficult aspects of trading, totally out of the equation.
Video: Learn from these Leaders, Don’t Let Failures Stop You
Let’s hear about failures from some great leaders.
I think you get the message, don’t let failures stop you.
Enjoy the video!
http://www.youtube.com/watch?feature=player_embedded&v=zLYECIjmnQs
Let’s hear about failures from some great leaders.
I think you get the message, don’t let failures stop you.
Enjoy the video!
http://www.youtube.com/watch?feature=player_embedded&v=zLYECIjmnQs
I think without a solid plan we should not try to step in the trading as this is our business and it requires solid preparation and planing.the traders who just open the account and try to trade straight away some times end up in deep trouble so it should be our main aim to guard the interests of our business and the detailed planing and the aim/goal must be very clear to us.
Psychology plays very important role in trading. You should have proper risk analysis, money management and stick with your plan. Don’t be emotional on trading. Be mentally flexible. Forex is good platform to earn money but it’s very tricky also, that’s why so many newbie fails.
How to Start Achieving Goals?
For many traders, this week is the first week back to their trading desk after a long period of festive break and holiday. Many would have written New Year resolutions and goals.
In order to up the game for the new year, you need to have goals that give you the buzz and energy. If you’re serious about your trading career, then make exciting and great goals. Don’t just have mediocre and boring but achievable goals. Be ambitious and push yourself for growth. If yes, that's great. But, more importantly, will you make it happen?
Which leads me to today's discussions.
Positivity
“Mastery is a matter of attitude and, beyond that, the development of the power of your mental potential” – Ari Kiev (Author of Hedge Fund Masters).
Now that you have a set of goals, having the right attitude is critical to achieving them. Many of you would have written these goals and then resumed back into your "normal" routine of “work as usual”. By end of January, some of you would probably have completely forget about your resolution quite quickly. Trust me, for some of you, once you get back to the old routine, it'll probably take another new year before you get back to it.
And that's what I'm talking about. Making goals are great but having the Right attitude towards these goals will make a huge difference.
My advise is this, go review your goals again and break them down to achievable mini goals. More importantly, note down positive action statements for each of these mini goals. We want to tune our mind to hold positive statements as these will eventually affect our sub-conscious mind. This is a simple recipe of
"Right Words leads to Right Thinking, and Right Thinking leads to Right Attitude."
Ok, enough of talking, here are some examples to illustrate my point.
Example
Alan wants to make 100% (compounded) return by the end of the year. That’s a 6% month-on-month return. The following are examples of normal but neutral action plans:
I will try to make 6% return each month
I should be able to avoid interfering from my trades
I shall keep a trading journal
Instead, Alan should write Positive Action Statements like the following:
I make 6% return each month.
I follow my trading rules (Non Negative).
I keep a trading journal to find areas of improvements.
Now, close your eyes and try saying both the Neutral and Positive statements out loud. Did you notice how a positive action statement would give you a positive vibe and energy even though they are similar actions? Can you sense the confidence going through your emotions?
Ok, may be these are not the best examples, but I think you get the picture.
Do not underestimate these Positive Action Statements as they are powerful tools to help you grow as a trader (as well as a person). They are also amazing tools to help you take Real Actions.
Commitment
Early this week, I managed to pull out an old video by Nick Vujicic and how he showed the world that nothing is impossible (click here to watch). If you’ve not seen the video, it’s definitely worth spending 15 min of your time on this. Trust me, it might even change your life.
My key message here is this, you now have goals for the year, you write out Positive Actions Statements about them and the last step is really to commit to them.
I know and I get it, commitment is a big word for some people, there will always be some things else in the way. In my view, if there is something else that is more important, than clearly your priorities are not in the right place. On the flip side, if your goals are in line with your beliefs and values, then your commitment should come very easily.
Commitment is also being in the “Now”. Don’t worry if you’ve made mistakes in the past and you have weaknesses that may prevent you from growing. You see, that's the past, and you don't know what's going to happen in the future. The only thing you should do is to Focus on getting it Right here in the present and believe that the potential rewards are worth the effort when you get it right.
Very often, people have Plans A, B and C all the way to Z... Seriously? Please don't bother. The more plans you have, the less committed you'll be to any single one of them. Instead, have spend your time on just ONE plan and the idea isn't to get it right first time. Instead, have continuity in the plan so that you're forced to get it right eventually.
Taking a Driving test is one great example to illustrate this. For most people, there is no plan B. They need to get a driving license and that's it. They believe they can do it, they know what to do and they Do It. However, not everyone gets it right first time. If they fail, Plan B is to repeat Plan A. They might take lessons from a new instructor but the focus is exactly the same. And this goes back to my point, if your beliefs are in line, your commitment will come easily.
Tools
If it helps, think of famous mottos or quotes that will help you. For example, this is a good one from Anthony Robbins:
“When it seems impossible, when it seems like nothing is going to work, you’re usually just a few millimetres away from making it happen.”
Or find commercial ones where you can resonate, like “Just Do It” by Nike or “The king is the man who can.” by Thomas Carlyle.
Be open and creative about this. Attitude and Commitment are such crucial ingredients to success that it doesn't matter how you would do it, just decide, commit and it's done by the time you know it.
Conclusion
If you want to turn over a new leaf for the year, this is the right time to review your plans. Having New Year resolutions and goals are great. However, they are not effective without having the right attitude and commitment.
Thank you for reading and have a good weekend!!
For many traders, this week is the first week back to their trading desk after a long period of festive break and holiday. Many would have written New Year resolutions and goals.
In order to up the game for the new year, you need to have goals that give you the buzz and energy. If you’re serious about your trading career, then make exciting and great goals. Don’t just have mediocre and boring but achievable goals. Be ambitious and push yourself for growth. If yes, that's great. But, more importantly, will you make it happen?
Which leads me to today's discussions.
Positivity
“Mastery is a matter of attitude and, beyond that, the development of the power of your mental potential” – Ari Kiev (Author of Hedge Fund Masters).
Now that you have a set of goals, having the right attitude is critical to achieving them. Many of you would have written these goals and then resumed back into your "normal" routine of “work as usual”. By end of January, some of you would probably have completely forget about your resolution quite quickly. Trust me, for some of you, once you get back to the old routine, it'll probably take another new year before you get back to it.
And that's what I'm talking about. Making goals are great but having the Right attitude towards these goals will make a huge difference.
My advise is this, go review your goals again and break them down to achievable mini goals. More importantly, note down positive action statements for each of these mini goals. We want to tune our mind to hold positive statements as these will eventually affect our sub-conscious mind. This is a simple recipe of
"Right Words leads to Right Thinking, and Right Thinking leads to Right Attitude."
Ok, enough of talking, here are some examples to illustrate my point.
Example
Alan wants to make 100% (compounded) return by the end of the year. That’s a 6% month-on-month return. The following are examples of normal but neutral action plans:
I will try to make 6% return each month
I should be able to avoid interfering from my trades
I shall keep a trading journal
Instead, Alan should write Positive Action Statements like the following:
I make 6% return each month.
I follow my trading rules (Non Negative).
I keep a trading journal to find areas of improvements.
Now, close your eyes and try saying both the Neutral and Positive statements out loud. Did you notice how a positive action statement would give you a positive vibe and energy even though they are similar actions? Can you sense the confidence going through your emotions?
Ok, may be these are not the best examples, but I think you get the picture.
Do not underestimate these Positive Action Statements as they are powerful tools to help you grow as a trader (as well as a person). They are also amazing tools to help you take Real Actions.
Commitment
Early this week, I managed to pull out an old video by Nick Vujicic and how he showed the world that nothing is impossible (click here to watch). If you’ve not seen the video, it’s definitely worth spending 15 min of your time on this. Trust me, it might even change your life.
My key message here is this, you now have goals for the year, you write out Positive Actions Statements about them and the last step is really to commit to them.
I know and I get it, commitment is a big word for some people, there will always be some things else in the way. In my view, if there is something else that is more important, than clearly your priorities are not in the right place. On the flip side, if your goals are in line with your beliefs and values, then your commitment should come very easily.
Commitment is also being in the “Now”. Don’t worry if you’ve made mistakes in the past and you have weaknesses that may prevent you from growing. You see, that's the past, and you don't know what's going to happen in the future. The only thing you should do is to Focus on getting it Right here in the present and believe that the potential rewards are worth the effort when you get it right.
Very often, people have Plans A, B and C all the way to Z... Seriously? Please don't bother. The more plans you have, the less committed you'll be to any single one of them. Instead, have spend your time on just ONE plan and the idea isn't to get it right first time. Instead, have continuity in the plan so that you're forced to get it right eventually.
Taking a Driving test is one great example to illustrate this. For most people, there is no plan B. They need to get a driving license and that's it. They believe they can do it, they know what to do and they Do It. However, not everyone gets it right first time. If they fail, Plan B is to repeat Plan A. They might take lessons from a new instructor but the focus is exactly the same. And this goes back to my point, if your beliefs are in line, your commitment will come easily.
Tools
If it helps, think of famous mottos or quotes that will help you. For example, this is a good one from Anthony Robbins:
“When it seems impossible, when it seems like nothing is going to work, you’re usually just a few millimetres away from making it happen.”
Or find commercial ones where you can resonate, like “Just Do It” by Nike or “The king is the man who can.” by Thomas Carlyle.
Be open and creative about this. Attitude and Commitment are such crucial ingredients to success that it doesn't matter how you would do it, just decide, commit and it's done by the time you know it.
Conclusion
If you want to turn over a new leaf for the year, this is the right time to review your plans. Having New Year resolutions and goals are great. However, they are not effective without having the right attitude and commitment.
Thank you for reading and have a good weekend!!
If it wasn't for the many posts on various forums that I have read that have talked about how difficult it can be to actually profit from Forex trading, I probably would have been wiped out and never would have profit from Forex.
Yes, Psychology does make up the majority of trading success. You have to be patient and not let greed/desperation drive you. Definitely never trade more than you can afford. Also, don't be afraid to hold it for a while. Most of my profit came from trades that I have held on to for at least a day.
Also, make sure that you are with a good broker.
Since my move back to Asia, I have met many new traders – including professionals, beginners as well as some who are just completely clueless about trading.
It’s quite an interesting experience for me as I could tell very quickly the ones who will be a successful and who won’t. I don’t think I have a crystal ball but I am only making the assumption based on one simple fact – the questions they ask. The common theme among the beginners and the clueless is this:
“How do I find the Ultimate Trading System”?
I made the assumption not because of the above question, but because that was the only question they asked. It was clear that they are putting too much weight in finding the Holy Grail – which, in my view, does not exist. Worst of all, some of them have not (and are not planning to) enrol in any form of Trading Education or Mentorship.
Note: Just to be clear, a Trading System is defined as a systematic and process orientated method of entering and exiting the Financial Market.
Trading System is only 20% of the Game
Today, I’m going to share something pretty crucial for your trading career, and that is – having a good trading system is very important, but the system is only a small part of the game. In my view, a good Trading System only contributes to 20% of Trading Success.
Just as an illustration, many amateur traders get frustrated when trading results are not favourable, they often give up on the system and/or start to jump from one trading system to another – see related article (Don’t let the Frustration Bug Bite). Some even go to the extent of blaming the Market or their Brokers – but never themselves.
On that basis, I’m pretty confident to say that many amateurs spend about 90-95% of their time working on trading systems. Many amateur traders do not realise the only thing that stands between the market and the system (assuming that it is a proven profitable system) is YOU. If you, the market and the system are not in sync, you are pretty much assured long term trading failure.
The Remaining 80%
In my view, I strongly believe that the remaining reasons required for trading success is Trading Psychology. However, as mentioned in my Free Guide, Trading Psychology is a very broad area which covers multiple subjects or can be multi disciplinary. Hence, please do not jump into the conclusion that I'm only referring to Emotions or Personality of traders. Instead, it should be a combination of the following:
Management
Like Psychology, this is a fairly big topic as well. In my view, I would break Management down into the following sub-categories:
There are a few schools of thought on this subject, some would argue that Trade, Money and Risk Management are part of a Trading System and they should not be view separately. Some would also argue that Self Management is part of Trading Psychology.
To be honest, I'm not here to debate with you to see who is right and who is wrong. My point here is to highlight the fact many amateur traders spend too much time on the system and they are not aware of the importance of Management.
Similar to Trading Psychology, Trading Management can be multi dimensional and I have highlighted some of them in my previous article (see related article - How Great Traders Manage Their Multi-Dimensional Roles Effectively). Again, I believe this will further highlight areas that one might overlook.
Conclusion
Your Trading System is really only a small part of your Trading Career. However, just to be clear, please do not ignore the importance of having a good profitable trading system. In fact, I highly encourage you to continuously develop your trading knowledge and to make your Existing system perfect.
Of course, if your trading system does not show favourable statistical results (including Expectancy, Reward:Risk ratio and etc) based a large enough sample size, then do go ahead to change it or dump it. Nevertheless, only change it after having a systematic review.
There’s nothing wrong if you have been all over the place in search of the “Holy Grail” trading systems. As the saying goes, “you don’t know what you don’t’ know”. However, ignorant is not valid reason any more. On top of that, if you’re reading this right now, I strongly encourage you to re-evaluate your trading plan.
It’s quite an interesting experience for me as I could tell very quickly the ones who will be a successful and who won’t. I don’t think I have a crystal ball but I am only making the assumption based on one simple fact – the questions they ask. The common theme among the beginners and the clueless is this:
“How do I find the Ultimate Trading System”?
I made the assumption not because of the above question, but because that was the only question they asked. It was clear that they are putting too much weight in finding the Holy Grail – which, in my view, does not exist. Worst of all, some of them have not (and are not planning to) enrol in any form of Trading Education or Mentorship.
Note: Just to be clear, a Trading System is defined as a systematic and process orientated method of entering and exiting the Financial Market.
Trading System is only 20% of the Game
Today, I’m going to share something pretty crucial for your trading career, and that is – having a good trading system is very important, but the system is only a small part of the game. In my view, a good Trading System only contributes to 20% of Trading Success.
Just as an illustration, many amateur traders get frustrated when trading results are not favourable, they often give up on the system and/or start to jump from one trading system to another – see related article (Don’t let the Frustration Bug Bite). Some even go to the extent of blaming the Market or their Brokers – but never themselves.
On that basis, I’m pretty confident to say that many amateurs spend about 90-95% of their time working on trading systems. Many amateur traders do not realise the only thing that stands between the market and the system (assuming that it is a proven profitable system) is YOU. If you, the market and the system are not in sync, you are pretty much assured long term trading failure.
The Remaining 80%
In my view, I strongly believe that the remaining reasons required for trading success is Trading Psychology. However, as mentioned in my Free Guide, Trading Psychology is a very broad area which covers multiple subjects or can be multi disciplinary. Hence, please do not jump into the conclusion that I'm only referring to Emotions or Personality of traders. Instead, it should be a combination of the following:
- Money Relationship
- Belief
- Positive Mentality & Attitude
- Emotional Awareness
- Routine
Management
Like Psychology, this is a fairly big topic as well. In my view, I would break Management down into the following sub-categories:
- Trade Management
- Money Management
- Risk Management
- Self Management
There are a few schools of thought on this subject, some would argue that Trade, Money and Risk Management are part of a Trading System and they should not be view separately. Some would also argue that Self Management is part of Trading Psychology.
To be honest, I'm not here to debate with you to see who is right and who is wrong. My point here is to highlight the fact many amateur traders spend too much time on the system and they are not aware of the importance of Management.
Similar to Trading Psychology, Trading Management can be multi dimensional and I have highlighted some of them in my previous article (see related article - How Great Traders Manage Their Multi-Dimensional Roles Effectively). Again, I believe this will further highlight areas that one might overlook.
Conclusion
Your Trading System is really only a small part of your Trading Career. However, just to be clear, please do not ignore the importance of having a good profitable trading system. In fact, I highly encourage you to continuously develop your trading knowledge and to make your Existing system perfect.
Of course, if your trading system does not show favourable statistical results (including Expectancy, Reward:Risk ratio and etc) based a large enough sample size, then do go ahead to change it or dump it. Nevertheless, only change it after having a systematic review.
There’s nothing wrong if you have been all over the place in search of the “Holy Grail” trading systems. As the saying goes, “you don’t know what you don’t’ know”. However, ignorant is not valid reason any more. On top of that, if you’re reading this right now, I strongly encourage you to re-evaluate your trading plan.
Just sharing a useful section from the book Trading in the Zone, 5 Fundamental Truth about Trading
- Anything can happen.
- Does not need to know what’s going to happen next to make money.
- Random distribution between wins and losses for any given set of variables that defines an edge
- Edge is nothing more than an indication of a higher probability of one thing happening over another
- Every moment in the market is unique.
- Anything can happen.
- Does not need to know what’s going to happen next to make money.
- Random distribution between wins and losses for any given set of variables that defines an edge
- Edge is nothing more than an indication of a higher probability of one thing happening over another
- Every moment in the market is unique.
I don't think it is bogus, but I don't think it has anything to do with being "happy" or having no hormone problems. LOL
I think psych is important insofar as you have to be steadfast, curb temper, ignore emotions. If you are staring at your trades, your knuckles white, your hand hovering over the mouse to move your stops up or down as your nerves dictate, you will kill your business. You have to remain calm, have a system, and see it through. I have seen a lot of success in Forex from people who set their pairs, set their stops and don't check in till 5-6 days later. They take the emotion out of the equation completely and are rewarded, I have found, with greater consistency then their nanny-trader counter-parts.
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It is true that Trading Psychology plays a very Vital role in determining the success level for any trader. A lot of Emotions need to be managed and kept well under control if a trader wants to taste the success in the field of Forex trading
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