Psychology
The Art of Zen Trading1. Create an awareness of your body.
2. Pour happiness into everything you do.
3. Detach. "Connected to everything, attached to nothing."
4. Set process-based goals.
5. Breathe, be aware of the present v the illusion.
6. Everything is temporary.
7. Trading is skillset building.
8. Mistakes and failures are a requirement.
9. The fight is the real reward.
10. You yourself have to engineer your own peace, happiness, and success--moment by moment, action by action.
Daily Wisdom 09 - Are you aligned?After years of searching for the holy grail, the trader found himself.
Psychology of OTHER People in the Market Matters More Than YoursMorning Traders - The next in our series of education posts is going to focus solely on Psychology. specifically regarding the psychology of OTHER people in the market. Once you nail this topic its going to give you a huge edge on the market.
Any trader is always looking whether the next few price swings are going to be bullish or are they going to be bearish? That is the essence of trading - If you know the next few price swings are going to be bullish then it makes it easy to make money right?!
Once you have this identified then you simply just need to time your entry, the safest way to do that would be to be watching for a short term pullback against your bias of where the price swings will be headed. Its important that when looking at these price swings, you watch HOW the price moves, don't need to concern yourself with any chart patterns or candlesticks, but ask yourself as you watch the price move, is the price moving with strength or weakness? If price is pulling back from your bias with weakness then this is an opportunity to place your entries and wait for the price swings you have anticipated. If price pulls bask with strength then it could be time to consider you bias again and stay on the sidelines.
The real key when analysing price action both in the long term price swings you see and in each movement within those price swings is the psychology of everybody else that is trading in that market with you. Much has been written and spoken about regarding making sure you own mindset and psychology is right within trading but I personally feel understanding how other people are feeling within the market is worth so much more. Once you understand how other people are feeling, their emotions etc then its becomes easier you predict their actions.
One of the most powerful emotions we feel that affects our decision making is fear. Im sure everyone can easily anticipate the actions of a fearful person, so we just need to translate that into the chart.
So start watching where are people getting trapped into bad positions? When are they feeling fearful that they made the wrong trade? When are they praying for the market to turn around? These are the traders you want to target because by their nature these are weak traders and likely unprofitable ones, you want to watch for points in the market where these traders know they have got it wrong.. So you should be looking to take the other side of their trades and profit from their mistakes.
The other major aspect of fear you should look for in markets is FOMO. Fear of Missing Out. You see this type of emotion ALL the time in markets, its essentially the market equivalent as when you see people run for the tube / underground as the warning beeps have started and doors are closing... People who have been sat watching the market for a while suddenly see it moving in one direction and start running to enter the trade as quickly as they can... the psychology of this is that they will likely enter with the wrong position size, they haven't analysed the new market conditions that were different from when they were watching the market before, and most importantly their risk management has now gotten out of control. When you see after an already strong price movement that it starts to slow down momentarily and then rockets again in the same original direction - This is typical of FOMO trading. Its wise when you see this to start thinking about places some trades opposite to these traders.
So when people say you should analyse price action - this is the most powerful way to do that. Its not about head and shoulders patterns, its not about doji candles or anything else you hear spoken about... Its simply about human emotions and how they are expressed within the charts.
To be successful you need to start identifying the moments and points in the chart where you know people will buy after you have already brought, or where they will sell after you have already sold.
Change your mindset - Dont Trade Forex.... Invest in Currencies I had been looking to do a market breakdown this weekend but to be honest, all the opportunities in the market have already been shared in my previous ideas posted.
So instead I am going to share a topic I have spoken to a lot of my followers about recently. The mindset of trading, or should I say investing... because that is really how you need to see it if you want to be able to trade consistently with confidence and conviction in your ideas.
Lots of people, especially newcomers to trading and FOREX simply see a chart and make a decision if the line is going up or down. A guess, a gamble. Even though I know we ave all done this at some stage, its not a strategy that will mean you are still successful in 5, 10. 20 years.
If you want to make money in this industry you need to have the mindset that you will still be doing this in 5, 10, 20 years. Once you start doing that it gives you a calmness to think though each trade like an investment.
So, before we get into this - I will explain the difference between a trade and an investment.
- A trade is something you are typically taking a position on leverage and for the short term, a few minutes / hours / days. Typically you are only looking at one only that chart and have a clearly defined exit if the trade goes into loss.
- An investment is something you decide to take a position in based on the underlying facts/fundamentals of what you are buying, the price is secondary. You consider more than just that one chart you are placing the position on and are willing to hold it indefinitely whether its in drawdown or not because you know the underlying fundamentals are right for you investment to come good in time.
So once you see the difference, which mindset and process is likely to play out successfully in 5, 10, 20 years time? Which mindset is likely to give you less stress while in positions? Which mindset will give you confidence and conviction in your positions?
All of this confidence and conviction in your positions is based in knowledge - In this industry, knowledge truly is power!
So when I say dont trade forex .... invest in currencies its because the mindset of trading forex is based in looking for quick wins, get rich quick stories and rented Lamborghinis. Whereas investing in currencies is based on the mindset to still be doing the same thing in many years time. Its the difference between aiming to be rich or to be wealthy.
The process of trading forex is looking at EURUSD and wanting to go short because of a chart pattern or something you have seen in the chart.
The process of investing in currencies is to be looking at the Dollar and seeing strength across a number of different charts involving the dollar such as DXY, USDJPY, GBPUSD. And then also having a separate opinion of weakness in the Euro by doing the same thing and considering the Euro across a number of different charts. - Once you have identified both strength in the Dollar and weakness in the Euro you are able to confidently invest in shorting EURUSD. At this point you have conviction in your position.
Please let me know your thoughts in the comments and for more posts like this follow me.
Questions to Ask Yourself Before Trading This WeekReflect on your state of mind and last week's experience. Are you attached? Are you connected? There's a major difference family. Leverage your experiences. Take last week's trades or lack there of to learn and become more.
Daily Wisdom 01 - Data Tracking vs Internal ProcessAre you doing things that actually matter to your bottom line?
I find it funny how big moves get always called manipulation 🤑Yesterday, there was a big dump 📉. Who would have expected that? Well --- you could say that after the battle, everyone is a general. But in this case, there were some decent clues which were, perhaps, ignored?
I looked at the situation retrospectively. After the rally, a small retracement hasn't managed to establish strong bottom support yet to bounce even further. Below was a long area of low volume - who would put buy orders there? Stop-loss squeeze enabled ✅✅✅. So it burst through some levels which were weak anyway and was put to an end near another.
I am strongly against excusing loses with "manipulation", evil 😈 Wall Street or whatever. It is always better to take responsibility for any loses you might have and ask yourself what you could have done better . Blaming events outside of your control won't make you a better trader. A retrospective analysis, on the other hand, does possess such a chance.
Good luck!
⚡Trader's psychological stages in the market⚡👋🏻👋🏻👋🏻Hello, dear dear friends! 💓
Today I would like to share with you ⚡ Trader's psychological stages in the market ⚡
💥 OPTIMISM. It all starts with a positive outlook on the market situation, which leads the trader to open a deal. Trader in anticipation of future success.
💥EXCITATION. The market begins to move in the predicted direction. The trader anticipates events and hopes that success is ensured.
💥TREMBLING. 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.
💥NEGATION. 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.
💥HOPELESSNESS. 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.
💥DISAPPOINTED. 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.
💥FAITH. 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.
😉😉And at what stage are you now?🧐
Share in the comments✍🏻
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Your Rocket Bomb🚀💣
Other my psychological idea👇🏻👇🏻👇🏻
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👇🏻👇🏻👇🏻
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The reason why trading IS gambling (Why it's important)Hello everybody and welcome,
First of all, thank you for the interest you show.
The goal of this content, is to empower you with the tools you need to shift your psychology and level up your trading.
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Before we start, let me just say that I do not have any product to sell. My content is free and my only goal is to provide valuable information to help traders being more successful and consistent when trading.
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Some explanation regarding the introduction above :
What I want to emphasize through that example, is that often times, when trading, you will face losing streaks . It is inevitable and we can also assume that it is recurrent . It is important to note what happens in the mind of a trader : doubt .
Why ? Because of not accepting the fact that trading is gambling.
I know ... It might be hard to "accept" because people often times think that trading is all about skills, but it is not.
Let me explain :
When you trade, whether you are long or short, you rely on nothing else than other people to make profits. The problem is, you do not know if these people have the same convictions and beliefs as you do regarding what the market is going to do in the future.
So there's randomness involved in trading because every moment is unique, i.e. it involves different people.
But, if you have an edge, meaning a "strategy" that puts the odds in your favor (whatever it might be, trading pullbacks, momentum trading, morning panics, gap strategies, etc...) : YOU ARE THE HOUSE . You win over a LONG period of time no matter the outcome on a trade-to-trade basis.
Now, considering what we just said, should we care about what is going to happens to the trade I highlighted above ? Absolutely not. Why ? Because we have accepted the fact that the distribution between wins and losses is RANDOM in the market . Therefore, whatever the outcome is, we know, that we will be profitable in the long run.
Why does that actually matter ?
Well, it matters, because as I stated above, traders doubt when they encounter a losing streak. They question their edges, their skills, they start questioning their rules and strategies. What is likely to happen ? They blow their account.
Fear, the biggest enemy in trading
Apart from doubt, the trader that just has gone through 4,5,6,7 or more losses in a row, is afraid. He is afraid to put on that next trade, even though that trade could be a homerun and wipe all his losses.
Fear paralyzes us, it reduces our focus and narrows our attention to what we fear the most.
You probably recall the time when you put on a trade and you kept bagholding a loser, you were paralyzed, you just couldn't sell. There's a funny thing that happens everytime when you hold on to a loser, whenever you decide to sell, the market bounces back. This is because you are not alone on that boat and human psychology is universal.
Once you have accepted that, you will be able to focus 100% on your actual trading errors, which are related to your knowledge and your skills. You will never doubt or have a moment of indecision if your edge appear on the chart. You will take the trade and don't care at all what happens next, because you know that trying to figure out if it's going to work or not has no sense.
Thank you for taking the time to read me. I really appreciate that.
Make sure you comment below if you have questions or just wanna add something.
Thanks a lot,
MyTradingJournal
🥂Just act like a pro, think like a pro, live like a pro. 🥂 ❤Hello, my dear friends! 💛
⭐Psychological knowledge is basis for starts trading. Today I would like to talk about this.👌🏻
Probably, you have heard, that among of traders, only 5% are successful.
🧐And what about the remaining 95%? These 95% make up the usual crowd, which was grew up like everyone else.🤜🏻 Therefore, many of you are "like everyone else."
And you will act “like everyone else” in the markets, and, will losing your money. 💸💸💸
The secret is not in a miracle of indicators and not fantastically profitable trading systems. 🙅🏻♀️
🙉 Everything is only in your head. 🙉
🏹You need to change yourself a little, learn to think in other categories in order to become successful. 🏹
💡You are responsible for your emotions and actions yourself. 💡
In the market it's important how you can manage yourself and your money. 🤑
The market is a game without a beginning and an end, and even without a middle: it all depends on your own plan. 💍
There are no bosses, no one will set plans for you, no one will force you to make reports.
🔔You have to do everything yourself. 🔔The market is an environment, that gives complete freedom with limitless opportunities and limitless risk.
✔You need to achieve a strong self-confidence. ✔
🔪The vice, that killed many traders is greed. Many of us want to achieve everything at once. 🔪
Greed is basis for other vices, such as impatience and excitement. Your greed is enjoyed by other, more experienced players.😎
🚷Fear and greed are the basis people’s problems. 🚷
Forget about it existence, when you open a trading terminal.
❣ Only if you have a clear and well-developed action plan on the market, with daily work on yourself, with a constant analysis of your actions, you can really solve many problems. ❣
🥂Just act like a pro, think like a pro, live like a pro. 🥂
🎊You can’t control the market, but you can control yourself. 🎊
So, you will succeed, even with a primitive trading system.
Start working on yourself. 💪🏻💪🏻 Identify your weaknesses, strengthen them with strengths. Study the psychology of human behavior to understand how a strong minority makes profit.
📎Markets are 90% psychology, because the same people work there. And each of them is exposed to fears and greed. 📎
If you interested in other educational posts, click here 👇🏻👇🏻👇🏻
Subscribe and put me like, because I try hard for you. ❤❤❤
❓Do you like educational posts?
✍🏻Write in the comments, which topics interest you, I will definitely create new posts for you💛💛💛
⭐Stay with me! ⭐
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🏆 GOOD ALWAYS TRIUMPHS OVER EVIL 🏆IT'S NOT AN EDUCATIONAL POST,☝🏻 although, the message is teaching from it!🤲🏻
⚡ Guys, I'm not here to make money, I'm here to gather interesting people near me, to publish ideas for successful deals. ⚡
There are a lot of wonderful people here. REAL PEOPLE who have good knowledge and experience that can help many traders, especially beginners!
👀I’m here a little less than a month, but this month:👀
😡 I received a lot of messages in the PM asking for mutual likes (I’m not an angel, I can also just have people who follow me if they like ideas, give me likes. But that's not always case)
😡 some accounts from the top (not all, but I can analyze well) has a tendency to attract attention: put likes, and then pick them out
😡 you can see how the great ideas of the guys are ignored, and many ideas that gain 300-700 likes have no meaning at all.
✍🏻✍🏻✍🏻✍🏻Guys, why am I writing that's all ??? Those who doing this, they can be understood, they are trying to make money.💰💰💰💰
🙅🏻♀️They don’t want to offer quality, they want to deceive the audience ... let it go!
🏆 GOOD ALWAYS TRIUMPHS OVER EVIL 🏆
My message is for you, my dears. You need to thinking, learning, developing, analyzing, don't let manipulate you!!!
♥♥♥♥♥I love you very much!!♥♥♥♥♥
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Trading Tips for consistency 1- Find one repetable pattern on a specific timeframe and track it on excel to know the exact % win rate.
2- patterns are more powerful than technical indicators, imho indicators should be only used for signal entries and nothin more than that. Remember all indicators are lagging indicators so patterns remains more powerful.
3- the ability to master oneself and stay disciplined to wait and wait for your specific setup to CONFIRM.
4- DONT anticipate you must wait for CONFIRMATION only.
5- max loss per trade. Risk management is the king of the game and you must have a pre defined max risk per trade BEFORE you even enter into a trade.
6- use HARD STOPS. As soon as you enter into a trade you must set your hard stop immediately.
7- if new imho u must use max risk of 2% of ur equity on each trade as a max risk, if you are exprienced then you are allowed to use more.
8- Journal your trades, take screenshots of your charts with entries nd exits, as well as joirnal your thoughts before you trade, during and after you exit the trade. Remember this game is 80% psychology so tracking your emotions is KEY to success as a trader.
I wish you all success 🙏
The Bear 🐻
How to make money: Profit from mass hysteriasA little update on my last post as I have had more confirmation of my claims since then.
About people irrational minds. Sounds all textbook all of this "mass hysteria" and people might think real life isn't that stupi but it is.
After telling someone his not hearing of the word CoronaVirus did not make it worse than the flu and ebola, I was just mocked for "making a stupid comparison" because "you didn't hear of ebola before it was discovered" and "if WE (not only him) have not heard the word CoronaVirus before 2019 it is obviously because the name was not invented"
FUN FACT: EbolaVIRUSSES were discovered in 1976. CoronaVIRUSSES were discovered in the 1960s.
And Ebola killed WAY MORE than Corona, the flu is also way worse.
Funny how SARS was "the mightiest zombie apocalypse virus" with Severe in its name, in 2002, and now these idiots out there don't even remember it and think "the coronavirus" was just discovered.
They will forget about this current one in 3 months at most LOL.
These people have no clue. They ignore what virusses are, they ignore that Corona is 60 years old, they ignore how lethal it is, they ignore that it is a common cold, they ignore that it goes away when it gets hotter, they ignore literally everything about it.
You got PLEBES hitting the table with their fist and DEMANDING worldwide vaccines for all.
The brainwashed populace that cannot think for themselves are scared.
They think the world is ending or some sh**.
Oh apparently this time according to "experts" "60% of the world could get infected". Yaaaaaawn, yeye sure.
Yet another irrelevant tiny fart in the winds of history that a part of the population is reacting too, and medias (and stock market bears) are profitting off with their flashy titles and *breaking news*.
What can only be described as either complete noobs, trolls, or idiots, called for a top. The "end of the bull market". The "mighty corona virus bear market".
Well US indices are already past ath.
You know, this timeframe is typically my time frame.
My trades, the winners (losers go much faster), most of them, end up lasting 3 days to 2 weeks, with the occasional lucky huge winner that will last longer of course, up to 2 months.
I think it is the best and easiest when one has "better than average foresight". I do not know how to predict the direction a company will go for the next 1 year or more, all I can do is buy cheap and hold. I can try guess generic trends and generic fundamentals, but I cannot predict what will happen in a whole year, 365 days, I have no idea what price a currency of company will be at in 365 days, the whims of the market. I've had my 1rst theory on stocks that was the dow would climb to 32k+ in "the future" (2nd one was 2018 was the top). And low timeframes like under a day is mostly just noise, and fees ruin it, and no one ever made consistent big returns from it, only people to claim they do are "educators".
Of course this is just the start, it takes way more than just thinking for yourself and not being a brainwashed sheep, but the basis is this.
Go against (or might profit from it) the public mood / emotions / irrational thoughts, and make sure to stick to the public attention span of around 2 weeks.
All this "CoronaVirus" FUD was, was an opportunity to buy indices on a pullback. MA50 + Trendline. The T1 would be ath. From here my favorite course of action is to trail my stop and try staying in as long as possible. Trailing is an entire discipline to master it depends on alot of things including asking oneself "if I place my Stop Loss here what is the risk to reward if this was a new trade" and also includes using obviously previous resistances as support, seing how the price is moving, etc.
There are other good ones, like "12 years left" "global cooling consensus - er I mean global warming - er I mean global climate change", but the most famous ones are not 2 weeks things, and no idea how long the hysteria lasts, so it's not a free piggy bank robbery like the never ending flow of 2 week long stories on the news.
I hope the media format always stays the same and idiots stay idiots. And I am pretty sure it will. People have behaved like gnus (wildebeests) before the existence of tv media, and now that less and less people watch tv and they instead spend time on social networks (twitter youtube seem to be the main ones they get their info from) nothing has changed, still 2 weeks stories and mass delusions everywhere. Thx for the money, kiss kiss.
The stock market will probably keep going up (this is not me saying it goes up in a straight line) till the Europe trade war starts.
From wikipedia for the format:
Rank Country Exports Imports Total Balance
- European Union 283,269 434,633 717,902 -151,363
1 China 129,894 505,470 635,364 -375,576
He probably adds Nato in it, and unlike china they are certain to argue about the climate change "not up for debate" dogma.
And europe are allies. It's going to be a huge thing. Maybe 3 years of sideways then a parabolic move up, then Trump presidency ends and the big crash.
In that time Trump could get assassinated by very angry page tearing lefties, a civil war could break, US biggest allies could start having bad relations with it, the US might have a hostile takeover by communists, europe trade deal could go well rapidly, could go well but after a long time, coumld go bad rapidly, could go bad slowly.
I just see it as impossible to call what will happen the next 4 to 5 years, I just know what direction it is supposed to go AND I know what to watch for what to expect.
Long live profitting of short term delusions.
They can laugh at us, they can insult us, they can argue with us, they can keep trying to have the last word, they can always be right in hindsight, they will always outnumber us, but we will always take their money.
Psychology in trading. Manipulation of consciousness Bitcoin 666Bitcoin's main trend is upward. Which formed the ascending channel .
Always trade with the trend. Decide in which trend you are trading and on which timeframe. Decide on strategy and risk management.
Your first enemy is a lack of experience and knowledge. Your second enemy is greed and a sense of lost profits.
You always have time to make money, the market will not run away from you, but money in the absence of experience and knowledge will run away.
On a bull trend it is better to always work on the bull side; on a bearish trend , on a bearish side. Always follow the trend! Going against the trend is the same thing that falls under the locomotive and hoping that it will not overeat you, but will bounce off of you!
There should be a strategy and plan. At the same time, your strategy and plan should be plastic from market situations.
You need to not only know the rules of technical analysis , but also understand what and how and why it works.
Knowledge of technical analysis and the psychology of the crowd will make you in trading - God.
If you are like everyone else, then the result will be like everyone else.
Those people who rely on quick profits without effort and time are doomed to give their modest deposit more smart and hardworking. For the minority to earn money, the majority need to lose money in the market. The more the majority plays according to the rules imposed by the minority, the more money is lost. Consequently, a minority earns. To earn, you need someone to lose! When a minority needs it, the rules of technical analysis stop working. The faith of the majority imposed by the minority destroys the mountains and minor minority deposits.
In the game against the crowd, only time decides the question of when the average zeroing of the deposit in the average person will occur.
Those traders who are sure that success depends on only one successful purchase, retention of the asset for a short time, and then sales are many times more expensive - are doomed to zero the deposit. This is what the majority think, which means that this is an erroneous opinion. Thanks to this majority faith, the minority earns. Trading is not only work - it is creativity and relaxation!
Remember, trading is a game of probabilities . Who trades from the situation created in the market - earns.
Who trades on the basis of what he wants - receives a loss.
The crowd trades out of their desires, not market probabilities. The crowd always loses.
Thanks to the thinking and desires of the crowd, we earn.
There are no accidents, there are random patterns that must be understood and used.
Coincidences are planned actions disguised as randomness.
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Money is not the meaning of life, but a tool for life!!!
Appreciate the time of your life in this world - this is really a limited resource . Time will pass, life will go.
Have you been born in this world for a cut paper of money that you will never have in your desired quantity? Think it over.
Also think about patterns.
Why is it that everyone who wants to have a lot of money remains very poor. And the opposite is true - who does not pursue the amount of money, but does good deeds, receives fantastic amounts in a short time that the “supplicant” and “wait for money” will never receive for all their wretched existence. How to give such is not safe. The crowd with their desires is crazy and selfish. To give to such is tantamount to destroying them. The world is honest. Who creates - he receives.
Most want to receive - but do not give anything in return. This is the secret of poverty.
Understand the world, understand yourself - life will become meaningful, understandable and easy.
Trading mechanism & Trading psychologyHi pros! today we will make the balance sheet of all the lessons we got through the 1000$ to 20K challenge. This is important because I think they already said to you :
"trading is 90% psychology and 10% Technical analysis" , indeed it is. Because a trader with the best technical analysis but poor trading psychology and mechanism will got very low performance or will stay a break even trader or even worst ! a loser :(
Why do you need psychology and mechanism to trade well? because it's like if you are in a car but you don't have break, or it's like jumping from an helicopter without parachute. You are going
to a complete disaster. Market psychology is essential for the good health of your trading account and also your physical/mental health (yes to keep losing and losing put you in a very bad mood and
can be potentially)
I will resume all and go deeper on psychology and mechanism on this text to get the best potential of this lesson, the chart is only partial. It's good to print them and have them always
on your desk while your trade
So lets begin !
1) maximum % loss reached per day = no more trade
Taking losses put you angry, emotionally weak and provoke reaction most of the time. you will be in a mind to recover your losses. But learn when to stop is the best thing to do if you want to survive. You'll have to deal with losses literally everyday of your trading career. learn to tame/manage them and you'll be always safe.
tips: cover your losses with your winning trade (by taking half) when you can. If you can't wait for the next day to trade.
2) adding to winners and don't touching at losers
This is the simplified sentence of "let run your winning trade and cut your losses". this mean don't cut your loss manually because you'll always use SL. This means don't bother you with losses (again), just try to add some trade on your winning trade when you already took half. This is a good potential wealth accident
3) dont look at the price when you take a trade
Don't stay blocked in front of your pc, go for other activity and keep an eye on the trade but not every seconds of every minutes of every hours ;)
4) don't chase the price (wait for a real opportunity, a real good plan), including fight the trend (don't force the market)
High quality trade gives you High quality potential of win. Focus on the quality of your setup and then market will surely give you your wage.
5) Find the most profitable SL on each market
to have a too short SL put you in losses more often, and when you have a too large SL you wait too much to take your win. Find the optimal SL for each market (ex: personally I use around 200 pips SL on each of my forex trade. Sometimes a little less, sometimes a little more but I try to have the optimal SL that gives me the optimal potential of winning rate.
6) no emotions, you win it's good, you lose it's ok
The market isn't your psycholog, you'll trade very bad and make a lot of errors if you have emotions while taking loss and wins (try to avoid them, emotions is human but get outside of the market when you feel your emotion taking control of you trading).
Don't rationalise every losses. (try to find the errors to upgrade your trading style but understand that sometimes market is simply irrational)
7) don't take a trade on the same market immediatly after taking some loss.
refers to rule 2 and 4. wait some hours or some days. Focus on finding other opportunities,you'll always find opportunity on the market. don't torture yourself if you don't took a trade at time or if you lose it and can't retry
8) avoid following other ideas
ideally make yours to become a better trader.
9) trade like a robot (no bad / sad moon, no angry, no revenge trade)
refers to rule 6. Even a small thing (like a dispute with a friend) can make you sink into the wall. Be totally calm and without aftertoughts
10)stay humble or the market will humble you
be satisfied with what you got by the market. if you did your average weekly performance be satisfied, if you make more be satisfied, if you make less be satisfied.
11)Make the choice to don't trade is also trading
when you feel bad about a trade (not sure) and you don't take it you preserve your capital. so you avoid loss. but don't be extreme and avoid every trade. it's exceptional
12) follow the trend
trend continuation trader have best result then countertrend traders. refers to rule 4, don't try to find every tops and bottom, If you found a reversal it's ok but don't focus on them.
principally use trend continuation method.
If you have something to add on this chart tell me and i'll be glad to add it. comment if you have some question, i'll be happy to answer with my little experience
The Secrets to Forex & Miller's Planet (pt.3)You must read the preceding parts first.
This one is a real doozy. Watch your reading comprehension levels go up in realtime.
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"Very, very few people could appreciate the bubble. That's the nature of bubbles – they're mass delusions." - Buffett
Last time we talked about how people who speculate are inherently delusional and are all in the process of losing; usually just money. The only way to 'win at losing' is to survive the delusion game by understanding the players and their psychology; not by guessing if price will be higher or lower in 10 years. When you survive, you are rewarded; all the money from big losers goes to the remaining players at the table. That's the derivatives, near zero-sum market in a nutshell. Sometimes players take their winnings and walk away, sometimes new players join the table. But in the end, 'the bucks are all that matter, everything else is just conversation.' The charts, the econ news, the geopolitical shocks... they only matter insofar as they influence the psychology of the players at the table. This is why you have to align your trading philosophy with player psychology first, and at the same time, reduce your risk presence when you take 'bets' in the market.
Think of 'reducing risk presence' as surviving or holding on and think of 'surviving' as taking a piece of the pie from the losers when they hit zero.
Remember, markets existed long before Adam Smith 'invented' capitalism. The original merchants and traders achieved longterm profitability by two methods: collusion, or by navigating wars, famine, oppression... Things haven't changed as much as you might think.
Chapter 1: The Margin of Psychology
Now, after the 2 parts, you've probably had enough of this distilled pseudo-academic fluff and you're ready for the valuable details.
Too bad chief, here's another fluffy paragraph. Again, get used to losing.
In the last part, I ended it by questioning if disorder can be consistent enough to be orderly. Now, we don't have to assume an orderly interpretation of disorder. It's proven by the presence of profitable traders/investors. The household names like Buffett and Soros. They operated, to a degree, on something investors call a 'margin of safety.'
Which is: 'the intrinsic value versus the current or last price offer.'
This is similar to what I've been presenting all along, only I disregard this Plato-like intrinsic value notion; please refer to my part 2 sectioned 'Emergence of Estimation' and read through 'Fact, Fiction, & Forecast' if you want the full take on this. Using fair value, or the center of price gravity, or more simply: 'resilient value;' especially when we are talking about derivatives and forex, serves as a better frame of mind. Because.. value only exists in the mind in a near zero-sum game. But thanks to psychology, there is some element of order present in the otherwise disorderly markets. You can worry about the ethical issues of big zero-sum money games later, after you can afford to read Das Kapital on your yacht.
Chapter 2: Counting Cost
I have spent a long time trying to find reliable patterns or orderly events in derivative markets. I have used or tested over 3000 indicators, experts, or scripts. So many that my MT4 terminal stopped showing them and I had to start an indicator genocide worthy of a binding UN resolution. Countless all-nighters across both small and large forums evaluating both the popular and wildly unconventional strategies and theories of forex. Books, videos, etc. 4, 5, 6 years and on. The stranger and more contrarian the idea, the more interested I became. More interesting to me than the idea itself was the line of thinking that created the idea in the first place. Why did retail traders think this way? Why did commercial traders think this other way? I was able to both regard and disregard the most qualified, and do the same for the least qualified. It's not a surprising lesson, but you have to go out of your comfort zones and destroy your biases to learn valuable things. Peter Thiel's contrarian thinking runs on this kinda stuff. Think about what has happened in the past several years. Contrarian thinking can turn idiots into geniuses these days.
Chapter 3: Hidden vs Too Close to See
Eventually, I stopped looking for a hidden far-off solution and started looking closer. You ever search your house to find your lost car keys only to later realize it was in your jacket pocket all along? Too poor to have a house, a car, or a jacket? Well, then keep reading.
So I started looking at the in-betweens. What's as close as possible to the decision making agent itself?
The first finding is that charts rarely have clear patterns, but human minds often do. From then on, research became straightforward and fruitful. How do I turn that theory into something that makes money, or at least doesn't lose money? I found the major candidates, the independent variables that create these flashes of order, these predictable events or parameters. It's not perfectly rigid, but its the next best thing in the highly volatile world of forex.
Chapter 4: Executing 66 Orders
First off, it's not as simple as a single mind's biases resulting in huge moves on a chart.
To use a basic military analogy, you have to think in terms of a chain of command. From a few big 'minds' to many small 'minds.' Or, you have to follow the killchain step by step. From psychological origination to execution. Obviously, execution is when the order is filled and liable to p&l. We have lots of charting and analytical tools for market movement and execution. But what is the origination? How do you properly connect them? Can you chart or summarize origination and its 'plane?'
So far I've talked a lot about psychology, but not much about specific biases relevant to forex. Or how a collection of 'psychologies' in the 'real world' might constitute a broader social factor, which, as a unit of analysis, goes on to influence markets in predictable ways. Does a commercial fund have biases? Does a central bank have biases? Does Wall Street have different biases than the City?
Four broad but related questions:
What is psychological origination and why do social factors matter?
Based on the above, how do you setup or build an 'orderly' chart to find that resilient value?
How do you use that knowledge to better manage risk and reduce uncertainty?
And by extension, how exactly does that make you a more profitable trader?
These questions will be fully addressed across the next several parts (maybe 7 or 8 more).
I'm going to skip a deep dive into the first question for now, so you don't get too bogged down on the abstract thinking stuff, and instead mix it a bit with something familiar and more visual in question 2.
For the rest of this article, we gotta talk timeframes and contracts first.
Chapter 5: Murph's Law
Time matters in forex. It matters a lot, and in ways some of you probably have yet to consider. In markets and finance, time shapes the parameters of most contracts. I would use a long analogy from Interstellar and Miller's planet (just watch the movie), but the key here is that: SOME RISK IS NEARLY GUARANTEED (written into the contract) while SOME RISK IS TIED TO SPECULATION ONLY. It's the difference between limited risk that is insured by the past versus unlimited risk that exists only via the future (you can have both as well). Up until now, we have dealt with the second, and not the first. Forex standards and practices (de facto contract rules), give us the first. Let me introduce timeframes, and then return to this so everything connects neatly.
There are many different approaches to categorizing timeframes.
By the common candlebar duration (1h, 4h, D; in other words it's categorized specifically by the 24hr clock); group A ,
or by abstract accumulation (like renko or heatmaps or orderbook data); group B .
Now, the latter is a loose fit for a timeframe concept, it can be discrete and confusing, but you can argue 'realtime' or 'all-time' as a timeframe in itself. I won't be discussing realtime very much, and I strongly recommend you read the disclaimer far below if you are a crypto trader or have access to prime data or level two data in general. IF you are a forex trader that fits into group B, let's say a Renko trader, then you need not worry about the indicators or models I present. However, I've only known one successful Renko trader, and he had custom designed analytics. So good luck with Renko, gentlemen.
I will focus on the group A category of timeframes: OHLC, Henken, line, etc. Everything that follows will be based on those.
Chapter 6: Don't Fail Science Class
The more you think of markets by real life principles, the clearer everything becomes. Which is why I want to explain timeframes by analogy. You could argue that markets share some basic similarities, at least from a layman's impression, to classical and quantum mechanics. The smaller the timeframe, the more random and chaotic they appear. And vice-versa. The center of price gravity at higher timeframes is more resilient to chaotic bits of new information. It's more certain . To use Bohm's term, you could argue its 'enfolding' or 'enfolded.' That while the general state of things is a chaotic flowing river, whirlpools with a set of persistent parameters can still exist in those rivers. All this really means is that different timeframes/sessions/days require different indicators and/or applications of those indicators. In addition, a full risk management approach takes into account the pairs/currencies chosen as well since their behavior may vary (choosing the river), and the nature of the contract itself (does it have a waterfall or extend forever?).
Simple summary: some things are more certain at long-term timeframes and some things are more uncertain at short-term timeframes . Most of you will already know this.
Chapter 7: Slaves to the Timezones
When I'm talking about short-term timeframes and long-term timeframes, I mean intra-day versus weekly or monthly. Technically you could trade something like the 4h or daily within a single day. (but to avoid confusion, I want to focus on timeframes as the periods from which you open and close positions, not the duration of the candlebar).
In other words, opening and closing positions within the 24 hour period (from open to market close). Versus. Positions held across multiple days/weeks.
This is very important because they are effectively different types of market contracts because of the risk of rollover. (unless you have an Islamic account)
In general: IF YOU ARE HOLDING POSITIONS ACROSS MULTIPLE WEEKS, you need to have either a genius technical or fundamental system OR, you need to be designing your trades with carry conditions in mind. 99% of you will fit the latter. Inevitably, this means your long term risk management must be quite different than short term risk management; particularly in the weighting of seasonality models and interest rates. I'll explain this stuff in the next article, but for now, make a selection:
Imagine owning a stock that pays you a dividend (😏), now imagine owning a stock that pays no dividend (😴), and now imagine owning a stock where you pay the company a dividend (😂).
Keep your "obvious" selection in mind, because it's gonna upset retail paradigms when I tell you why you're trading the wrong pairs on the wrong timeframes.
See you next time.
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DISCLAIMER:
Now, I should've mentioned this earlier but IF you are a cryptocurrency trader, and some of you reading this may very well be, let this be clear: I did not design these articles for your consumption. Though crypto is arguably a currency, it's core mechanics are different, as is the psychology of the players involved and the market structure. The legal, tax, and broader financial components vary (the nature of the contracts, the timezone/session influences). Indeed, regulation is the main fundamental in cryptocurrency right now, making it a market potentially susceptible to a near-total collapse (at least for blocks of investors) depending on the providence of your broker or income tax obligations.
