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Psychological

Getting Over the Agony of LossesHey Guys! When a trader takes a loss, it can be quite hard. It can strip you of your motivation to trade. Or perhaps even sway your quality of life. But that doesn't have to be the case. Do you ever wonder why experienced traders don't have a fit after a loss, whilst beginner traders can go into a chatic godzilla-like tantrum? No, it's not because they're enlightened in some way or simply not prone to anger. It's because they understand what trading is "truly" about. Trading is simply about refining your strategy and honing it until it is capable of extracting consistent profits from the markets. Moreover they understand that in order to refine a strategy they will have to take losses from time to time. How else will they know if their strategy needs refining or not? Thus the experienced trader views a loss as an opportunity to further refine their strategy and more importantly views these losses as a necessary component to propel their trading to the next level. Now, viewing losses from this perspective, who in their right minds will throw a fit every time they take a loss? So just some advice to the beginner trader. If you don't have a specific strategy that you're working on and are hopping from strategy to strategy; consider making your own strategy. Of course this can be a mixture of strategies you came across in your trading education, but ultimately the strategy must be constructed with your original signature. This means that you understand the nuts and bolts of the strategy and thus have the ability to refine it when necessary. Once you begin this refinement process, upon a loss and the anger starts to kick in, you'll find that refining your strategy with the lessons learned from the loss will diffuse that anger that erupts inside of you. It will become an antidote that if persisted, will get you on the peaceful road to trading success. I hope this helps! Have a great day guys! Ken
Education
by TradingForexPriceAction
5
Trade like a casino! 🎰🎲💵Yep you heard me right you need trade like a casino 🎰 Key bit here is trade like the casino operates their business model. Don't trade like the clients that frequent the casinos. Why should you trade like a casino? Profitable traders understand how casinos are successful. Casinos are profitable and make money because they have an edge which they let play out. They know probability is in their favour. How many times have we all been at a roulette table thinking we have a 50% chance of winning betting on red or black. We all seem to forget about that green zero on the table and here in lies the casinos edge. With having an edge they let play out it's impossible for them not to make money. The casino is comfortable with every outcome on the bets placed knowing the edge will play out. Losses are seen as a cost of business, risk is controlled and emotions to are in check. This is why the house always wins! 🎰🤑 If you as a trader apply the same logic's to your trading strategies the end results will be the same as the casino. If you choose to trade like one of the clients in the casino with no fixed rules you essentially are gambling with you trading. Subjectivity and emotions will come in to play. Random winning and losing runs will occur which will impact trading psychology. This way of trading will only end in one way and that's by giving everything to the house or in this case your broker! Development of a strategies with proven mathematical edges ensures you will become the house 🏦💰 Once an edge is established trust your strategy and let that edge play out. ----------------------------------------- Please hit the 👍 LIKE button if you like my ideas🙏 Also follow my profile, then you will receive a notification whenever I post a trading idea - so you don't miss them. 🙌 No one likes missing out, do they? Also, see my 'related ideas' below to see more just like this. Thank you. Darren
Education
by pow_removetheguesswork
What it means to be a "Trader"...Fact; - The top 3 Hedge Fund managers, in excess of +11,000% net lifetime earnings, have no more than 3 trades, total, constituting >85% of their total, life-time earnings. - Every last one of the top life-time earners ("Trading Legends") - in excess of +11 000% (eleven thousand percent net return(!!) - have made their fortunes in Commodities and FX. (Soros, Druckenmiller, Jones, Lewis, Kwane, Trout, the Richies, etc.) No stocks / equities / or similar dog sh#&t! - None, nada, zero! Now, most morons attribute the above facts to the "power of leverage". Are you friggin kidding me?! That is absolute nonsense! In what universe does "leverage", in itself, contribute to trading success??... But if you want "fast money", know this; Commodities and Forex have real hedgers and therefore it is a positive sum game for speculators. Whereas stocks?... It is the same idiots trying to make money ripping each other off. It is truly a zero sum game, a pyramid scheme. To make any money on any of those bags of odorous excrement (20x, 100x, 200x earnings) one would have to not only hold them for years but also *** be right about the trade ***! Otherwise what?... Are you going to hold the bag on some dog crap for 5 years, at a time, just to learn that you were wrong?! Is that the plan?... At the same time a Commodity or a Forex trade will provide you with the "meat of the move" in days, weeks or a couple of months, max. You will at least know, right or wrong, about the trade's prospects, aeons before some garbage stock trader ends up holding the bag for the better part of his natural life. Traders are like snipers; They sit in wait for the right moment and are there for one, singular, solitary reason: For the kill! No more, no less. Whatever it takes. What Traders are not; A) Traders are not "investors"; B) Traders are not "scalpers", nor "grinders"; C) Traders do not exist to "forgive", to "let off the hook" or to "give back". Traders have zero problem to tear you from limb-to-limb and to eat your still beating heart in the front of you, as you watch. - And all that before ever breaking a sweat. ... because anything short of that is a loosing proposition! E.g. "trading" is not a forgiving business so you better be right! Man (as in: The Species) has two (2) fundamental and overwhelming driving forces: Fear & Greed. (Man is also territorial! E.g. trading is not a team sport.) Every time you enter a position you are taking on massive risks. That is the name of the game: The buying and selling of risk. Thus, being careful and selective is much regarded as in good form. Here is what you are up against; images-wixmp-ed30a86b8c4ca887773594c2.wixmp.com - In 2019 the 5 major FX Dealers have booked $147 Billion US in profits; - Top life-time earners, between 1980-2010, made: +11 000% (eleven thousand) - Total; - Top earners between 2010-2020 are currently earning: +3000% (three thousand) Annually(!!); - A typical, top FX Dealer (UBS) has ~210 traders, working in 3 shifts, 24/5; - A top FX Trader clears $6-$13 Million in bonuses, annually; - The average Trade Portfolio size (per trading floor) is $4.7 Billion US; - The average dealer risk limit per $100 Million is 3.5 pips. In short, these people do not get up every morning to let you take their Rolls Royces or to have their wife leave them because they can no longer afford the private schools for their children. They do not go to the office, day after day, to let you load your $50, $500, $5 Million, in the correct market direction, with nice tight stops, for you to sleep easy because little risk is involved. No Sir! Put yourself in their shoes! They must buy when you want to sell and vice versa. So when you spot that big, one-way move... So do they! - But they have no choice in the matter because that is what dealers must do - e.g. the opposite of what you have decided. So how could they ever make money? Simply, by taking that nice, tidy, one-way, mega move and shove it back up where the sun don't shine, as often as possible, all along the way. It is simple as that. So the next time you sit down in the front of the computer to make a trade just remember who is on the other side of that screen. Ergo, you better be ready - by whatever means - to do the same thing to them as they are sure to be about to do it to you! "... and when you see it, you bet the farm!" - Stanley Druckenmiller
Education
by Nemo_Confidat
4
Stages of Trading Psychology💣 or It's ok not always be ok😉Hello, dear friends. 💋I feel amazing publishing EDU posts.💥🚀 And now I wanna share with you an useful post. 💪🏻It's very important now. 🔥 Because the market situation is still ambiguous! Enjoy it.🧡 Optimism - It all starts with a positive outlook on the market situation, which leads the trader to open a deal. Trade in anticipation of future success. Excitement - The market begins to move in the predicted direction. The trader anticipates events and hopes that success is ensured. Thrill - The market continues to move in the direction the trader needs, this is a moment of joyful fading. At this stage, the trader is fully confident in his trading system. Euphoria - Point of maximum financial risk. Investments turn into quick and easy returns. Trader completely ignores risk. Anxiety - Oh no, the market is turning around! The first signs of movement appear not in favor of the trader. But he does not notice this and believes that the market will recover and the trend will continue. Denial - The expected market recovery did not happen. The trader does not accept what is happening and remains in position. Fear - Reality dictates its own rules, and the trader begins to realize that he is not as smart as he previously thought. Instead of confidence in success, thoughts begin to get confused. Desperation - At this point, all profits are lost. The trader had a chance to take profits, but he missed it. Not knowing how to proceed further, he is trying to do everything to return at least to the breakeven point. Panic - The most emotional period. At this stage, the trader feels his ignorance and helplessness and is wholly in the grip of the market. The mind is paralyzed, which sometimes leads to meaningless actions in the market. Capitulation - The trader has reached the limit of patience and closes the position so as not to increase losses anymore. Despondency - After exiting the market, the trader no longer has the slightest desire to enter into transactions. Depression - The trader begins to blame himself for the stupidity of why he did not close the deal on time. Some choose the right path and begin to analyze what went wrong. Real traders are born precisely at this stage, studying past mistakes and drawing conclusions. Hope - “I can still do it!” In the end, the trader returns to the realization that there really are cycles in the market. He begins to analyze new opportunities. Relief - At this stage, the trader restores faith in his future in the market and starts trading again. The stages considered by us well demonstrate how psychology influences trading. 80% of success in the market directly depends on the correct psychological state of the trader. I wanna remind You, that I have already created two chapters of my own free training manual here, you can familiarize yourself 👇🏻👇🏻👇🏻 Thank you staying with me🙏🏻 Love YOU🧡🧡🧡 Always Sincerely Your Rocket Bomb🚀💣
BITSTAMP:BTCUSDEducation
by RocketBomb
33
Hope. 🙏🏻 Fear. 😱 Greed. 🤑 Welcome, guys! 😊Today I wanna talk with you about our feelings and emotions💋💋💋 💥 Fear of falling prices provokes a sell , and the opportunity to lose chance to make monney leads to an unreasonable buy .💥              ⚡Such pernicious emotion like greed is a manifestation of the trader’s arrogance and his thirst for a good income as soon as possible, which also provokes the unfoundedness of transactions.🤷🏻‍♀️         Many psychologists and scientists do a lot of research in the study of human emotions and feelings, the results of which show the ability to control their emotions. 💪🏻 In trading, managing emotions is a very necessary. 💪🏻 Let's consider three seemingly simple emotions on which a trader’s work in the market depends in more detail: 📌Fear 📌Hope 📌Greed 😱 The role of fear in trading 😱         In fact, fear plays a significant role in the market. Fear often deprives the trader of the opportunity to earn money, but also saving him from making fatal decisions. The emotion of fear often serves as a kind of "brake" for the trader.        A frightened trader is obsessed with the adverse aspects of trading. Fear of losing money generates a lot of other negative emotions in your head. 🤑 Trader's greed would destroy. 🤑 Greed is a disastrous and dangerous feeling, especially for a trader. The prevalence of greed rarely can help to achieve the desired result. It depriving people of the ability to think soberly and objectively. Often, having felt success, a trader wants to earn more and more by making the following mistakes: ❗ Untimely exit from the transaction ❗ Hold position more then you need ❗ Overstatement of risks 🙏🏻 Hope is the last thing to die 🙏🏻 Of all three emotions, most market participants live with hope. This emotion is completely opposite to fear, because its presence affects the positive thinking of the outcome of the trade. In moments of hope, the thinking of market participants is aimed at making profit, not losing it. People trade in order to achieve success and financial stability, taking income from the market. The circle of such people was divided into optimists and pessimists, absorbed in hope, fear and greed, only to different degrees. One way or another, an overabundance of these emotions can lead to losses . The best option is to find the “golden mean” and learn how to manage your emotions.💪🏻💪🏻💪🏻 😊😊I hope you enjoyed my post, don't forget to support me with like 🌞, subscribe,for don't get lost!💋 Below are links to my previous ideas👇🏻👇🏻👇🏻 Stay with me🌞 Your Rocket Bomb🚀💣
BITSTAMP:BTCUSDEducation
by RocketBomb
23
The Secrets to Forex & Protecting Your CarryYou must read the prior articles first. If this was a video game you would probably be trying to skip the conversation boxes at this point. Don't try to speedrun this, you'll die at the boss. --------------------------------------- I'm sure you're tired of all the poetry and want to get straight to the money. Money, after all, is the best form of entertainment. Now, last time we left off with timeframes and carry conditions, key components of the overall risk management message I want to get across. I figured that most retail traders operate on multiday/multiweek positions. Most know next to nothing about carry risk or other unique risks present only for non-intraday traders. If you intend to hold positions across several weeks/months (see pt. 3 for the definition), then this section is the most important of all the articles to come. In addition, I recommend doing additional research, especially if you have a job, are in schooling, or other responsibilities; because understanding this risk (and potential reward) can be very beneficial for those with limited time to spend. Part 1: Country-level Assets All wealthy people own assets. Assets can appreciate. If you 'own' a lot, you are, by default, wealthy. At least, for a brief moment in time. When you trade in forex, you are investing in a type of asset underwritten by a 'country' and paired with a similar underlying. The country creates the supply, and sets minimum standards in demand via tax law. Like businesses with stocks, countries with currencies and bonds can default, and flatline, leading to a breadline utopia. Inversely, they can also grow, and produce something of market value; and then provide returns to everyone that bet something on them. Some countries are flailing about, some countries are stable, and some are growing with seemingly no obstacles in sight. Which one would you want to invest in? Remember the dividend question? Before some median-salary economist gets in a huff, yes it's not always as simple as 'growing country = growing interest rates.' But here's what's important for retail traders: Central banks manage these 'country-level' assets with an evolving toolbox to variable acclaim. I recommend doing your own research into that topic, because it's too far outside the scope of these articles, and there are no unified verdicts on the 'science' behind any of it. The important thing to understand is that when you invest in these country-level assets, some countries demand a fee rate, and some offer a dividend rate. THAT'S IT. Room temperature or higher IQs will get this. Part 2: Free to Play vs Fees to Play You can find these rates by googling: 'central bank interest rates.' Those negative rates are FEES TO PLAY. Zero or higher is FREE TO PLAY. If you hold currency at a broker, these rates are realized and charged or credited to your market position at the daily rollover event. This occurs at the end of the 24hr cycle set to City time. So if you hold positions over 24hr cycles, you will be charged or credited REAL MONEY (no delivery gimmicks). Now, you can't trade currency in isolation in forex, it's always in the form of a pair. In case you haven't figured this out yet, the forex trader is the type of player these articles are designed for. This means, in lazy phrasing, that you are betting on the demand for the money (investor appeal) of one country AGAINST another. If you want to invest in a country as is, you can opt for national or municipal bonds, but note they do have slightly different carry conditions. But to stay on target, what do you think happens when you match a higher rate with a lower rate? The USD is a higher rate than the JPY. The USD is free to play, the JPY charges a fee to play. When you open a position in the market, you are FUNDING one of those currencies (basically against the other). This means you are liable to the interest rate gap. Brokers have an unnecessarily complicated explanation for why they HAVE to pay you money (or take your money) even though price action may not technically move from 23:59 to 00:01. They want to balance the books in a way they are comfortable with, because they have lots of liabilities with major liquidity providers. The net takeaway is that most brokers will generally charge or credit based on the interest rate gap between the currencies in your selected pair. So carry conditions are relevant accross most brokers unless you have a based Islamic account. Note that most brokers have a separate fee (usually .25%), which means if the interest rates are equal then you still get charged at rollover. There are other subtractions brokers will make as well (never in your favor), sometimes cutting deep in the rate gap. Unsurprisingly, they want to pay you as little as possible; in some cases, you can be charged on rollover regardless of gap or position direction. This is why you need to check the 'specification' of the pair in your MT4 to see the swap (or use a calculator provided by your broker.) Some brokers have special rules for emerging currencies with high rates like 8%, other brokers may offer advantages for trading these depending on their business structure. Wed to Thurs rollover is a x3 event , basically to make up for the lack of a rollover event on Sat and Sun night. You're probably wondering why these 'small percents' matter. After all, you're in forex to make highly leveraged internet magic money, not some quarterly dividend payment like your boomer parents. Part 3: Make America Think Again But it's just pennies a day right, who cares? Carry conditions can cost or credit you pennies a day or thousands of dollars a day, depending on the size of your position or the pair in play. On some pairs, you can make 15~ USD a day with just 1 lot in the market. That's over 5k a year USD. That's the equivalent of 540 pips a year, WITH 1 LOT ON 1 PAIR. And all you have to do, is fund a high rate currency bet against a low rate currency on a popular broker. That's it. No technical moonworshipping required. No stalking some coin startups social media for pump and dump schemes. No staying up all night worrying about the West going to war with Iran because you longed the Euro before dinner. It's the opposite of the coin flip, its coin printing. Many retail traders are from developing and emerging countries, it can be an excellent opportunity for men and women of all ages. Its like working at Wall Street and sending the remittances back, all from the ease of your home; without any political, religious, cultural, or economic barriers to get in your way. Sure it's not really that convenient. But the analogy would've been really cool if it worked. So what can happen, for example. At .40 lots for a full position, you would net 1.80 USD a day. Assuming 2 weeks to fill a position at optimal entry points (we'll talk about this later), and a remaining 2.5 month duration (5 fortnites), you net about 130 from carry credit payments during that trade period (1/4 a year), and be able to close with a very profitable or at least at a net-positive price level. Keep in mind, the average yearly takehome is anywhere from 2k-10k in developing countries. 1.8 a day can represent significant supplimentary income, and you only need 100-250 (in USD equivalent value) to support margin at most brokers. You could reinvest those winnings over the course of the first year and start the next year earning 7-8 USD a day. Now some of you might have more cash to waste. With a career in a developed country, maybe you have 25-50k to responsibly throw around in your 20s, no family, STEM job, good rent contract, little student debt, etc. We can upgrade that position size to 4 to 8 lots. 18-37 USD per day. You'll be doubling (before tax) your initial capital every 4 years. Part 4: Fields of Pink But wait, what if you have the opposite position? You fund a low rate currency against a high rate currency, or your trash broker demands fees on both. Your inverted head and shoulders 4h pattern looks (and smells) great, and you're ready to long the EURUSD. You plan to hold this one for a month at least, until it hits some absolute number like 1.200 (because it's the fifth wave in some model a statistician invented 40 years ago), and therefore, must happen. You decided your 'RR' would be 3 to 1, a 150 pip stop loss and a 450 take profit. You're already taking a tendie loan out at KFC in anticipation of a big win down the line. Meanwhile, you're losing 13 dollars a day (or let's say 0.5-2 pips worth of loss), guaranteed. Because you're paying a fee to play, while taking a bet that fails at a near 50% rate (much higher for retail), while throwing away weeks/months of time in anticipation of a result/delivery (capital opportunity cost). Now, if you had ten thousand years of nutritionally deficient ancestors, I can't blame you for this decision-making. But most of us haven't. So here it is, another forex secret: Quite simply, there are pairs the vast majority of you shouldn't be trading, and that includes majors with poor carry conditions (losers both ways with rollover). Pairs like CHFJPY, or any pair that has you longing the JPY or CHF (and usually EUR). Betting against the USD is another insured risk, when looking at majors. It doesn't mean you should never fund a low rate against a high rate, but you need to think in terms of FEES. Is it worth paying a daily fee to make this trade? Now, for the greedy. You'll need to do your own research, to decide if hunting extremely high rates on emerging/exotic currencies is the best course for you and your margin, of if settling with minimal (but not negative) rates on crosses or other majors is good enough for your strategy. My guidance is to look into emerging currencies if you don't have much time to trade daily (someone with a full-time job or family) or you don't intend to sink 1,000s of hours into mastering the intra-day trade (nightmare mode). Part 5: Washington Consensus Trading with carry conditions in mind can even be advantageous compared to other asset classes (like stocks or corporate bonds). It's like trading a high yield junk bond, only you have far less risk from defaults. What's a safer institution? Some 5 month-old, toothbrush-sharing, 10 slide company with 8 employees, or the full might of a nationstate? Sure, a few nationstates have defaulted in modern history. The upside is you usually have lots of heads-up, because default tends to be political in nature. That is, if you're a nation in need of cash, you can always get a loan. It's simply a matter of if the terms are politically acceptable for your faction. This all factors into the 'heads-up' period, alerting you to pull out or reverse your position. The US tends to sanction them beforehand (conveniently) kicking you out of those markets ahead of total economic disaster. The complete opposite occurs with some shady junk bond at 15%, where the company disappears overnight. Companies fail for the smallest things, they fail all the time, and the world goes on. A country failing is always geopolitical in nature and market rules about fair play are thrown out the window. This is an intrinsic advantage to forex and global macro tradables in general. I'll talk more about the future risk of national defaults and the utility and primacy of forex as an asset class in the final article. So beyond the obvious consideration, which is to fund a high rate currency against a low rate; what pairs should you trade and how else could you mind carry conditions while holding a long term position? Should you stick to emerging (exotic) currencies against safe-haven currencies? IE, you only short the EURMXN or fund against the CHF? And what indicators/models (from article pt.2) should you use to achieve the safest average price entry? Part 6: Not All Edges are Sharpe Forex is highly volatile, so you may have an advantage in the carry conditions, but suffer a net loss from a poor initial position when you decide to close. A currency with a negative rate could move against you, bigly. Remember, the future holds unlimited risk. But the distinction here (as mentioned in the prior article), is the resilient value in understanding that contracts can have insured risk outcomes. Cost/benefits that are legally settled (from the past) at the point of opening position and at the rollover event, even if brokers tinker with the point payouts, the 'deal' is still there in some form. Here's a poorly kept institutional secret, greed often drives the price in the direction of the higher interest rate currency in a pair over multi-month periods, so this doesn't really matter. Wealthy investors are greedy for higher payouts from emerging countries: where labor is cheaper, new factories spring up all the time, and real estate can be opportune. Part 7: Bat Soup vs the Fortune 500 Old school risk theory in markets argues that high volatility = high risk, but in recent years it has evolved beyond such mathematical explanations, especially as consecutive market challenges broke paradigms. Boomers are slow learners, but they adapt quickly when they start losing money. The subprime crisis cost them big time. And it's true today for our sniffle pandemic. It's simple: On high timeframes across longer-term positions, macroeconomics and geopolitics reign supreme. This isn't just a forex rule. This has been true since the dawn of markets in human society, it is true today, and it will be true in the end. Regulation and interest rates are variables that follow those leaders (not precede). That is, their behavior is shaped by the first two; macro and geopolitics. Think about COVID-19. Look what a few bats and one strange wet market did this world. Macroeconomics and geopolitics produce basic patterns in the human brain that propagate through our societies as two different frequencies: the short wavelength called fear or the long wavelength called security (interpreted in complex ways by players in markets). These are filtered by timezones, languages, civilizational and organizational biases, technology, individual upbringings, and the incumbency of delusion and greed. Nanoseconds, or years later, this all gets represented as a market outcome on a chart. Amazing that people spend so much time analyzing the chaotic patterns of some shit on a floor instead of what was on the menu last night, when they try to understand what went wrong. So if you can understand markets during these strong periods of psychological stress, and during soft periods of algorithm auctioning and market making (call it ranging), then you can sail all the seas and survive all the storms. This is where concepts like seasonality, ATR, regressions, psychological origination, hedging, news trading, major moving averages, and others come into play. In the coming weeks, I'll start to break down the major components of those, and where the center of price gravity and extremes are for these higher timeframe, longer-term positions. So you can find the optimal entry opportunities for longer-term trades, while also taking advantage or hedging against carry conditions. It's time to start charting the course.
Education
by CountofCoins
Education post 15/100 – How to trade Psychological Price Levels?What are Psychological levels? Psychological levels are price levels which tend to draw big market attention and typically witness a reaction by price when tested. These levels are the main round numbers (whole numbers), referred to as “Double Zeros such as .9800, .990. Plotting support and resistance levels is often a challenging and subjective task. It is also commonly one of the first areas of price action new traders attempt to tackle. Support and resistance can be established in numerous ways, such as: trendlines, moving averages, pivot point levels, Fibonacci levels, key high/low points etc. A common complaint with a lot of these methods though is subjectivity. This is why we believe psychological levels are appealing, as the numbers are effectively embedded within market structure and are entirely objective, as you’ll see going forward.  So...What are Psychological levels? Say that you’re the proud owner of new car, and a buddy down the pub asks how much it cost. Assuming it set you back $10,999, it’s unlikely that you would tell him that exact figure. Instead, to keep things simple, you’d probably round the number to the nearest thousand i.e. $11,000. And this is exactly what happens in the financial markets! It is far more likely that a trader will select 1.2500 over 1.2493, for example. Why do they work and how to trade them? Trading support and resistance can be a fantastic way to approach the market and for many new traders this is one of the first areas of technical analysis that they come to properly understand. There are a great many varieties of support and resistance in the market that traders can look to build strategies around such as: key highs/lows, trend lines, Fibonacci levels, moving averages, pivots, Bollinger bands and more. However, there are also levels that are already embedded within the market that can act as powerful support and resistance and traders don’t need any tools or to perform any complicated analysis to find them. These levels are called “Psychological levels” More on our website, link on Profile.
Education
by GroundStoneHoldings