Psychology
Can a Strategy be bought?To be successful as a trader, you have to understand that this activity is a continuous battle for survival. If you don't think like a warrior, you will have a very short life as a trader.
More than eighty percent of retail and intraday traders will kill their accounts in their first three months. The most successful traders learn the painful and costly rules of survival in the markets through trial and error.
The word "strategy" comes from the ancient Greek term stratēgía ("office of the general, command, generalate"), from stratēgós ("the leader or commander of an army, a general"), from stratós ("army") + ágō ("I lead, I conduct"). In other words, it is a matter of "thinking like a general".
The most important book on this subject, the Sunzi Bingfa , poorly translated as "The Art of War", deals with planning and strategic analysis. The fact that this book deals with strategy, not war, explains why its methods are perfectly applicable to the planning of market operations and to any other activity that requires foresight and analysis.
According to its author, the Chinese general and philosopher Sun Wu , known as Sunzi (Master Sun) or Sun tzu, success is not for the strongest or the most aggressive, but for those who best understand their situation and what their alternatives really are. By studying and understanding the strategic framework proposed by Sunzi, you will be able to analyze almost instantaneously any competitive situation in the markets, detect opportunities and make appropriate decisions.
This contribution and the following ones are a tribute to the millenary wisdom of this classic work and a gift to those novice or expert traders who, like me, were defeated before the markets for not having a Strategist mentality.
Dario van Krauser
Strategists Trader
Daily Wisdom 16 - Track what mattersDaily behaviors leads to results. Too many focus on the results while lacking daily behaviors. No wonder they fail.
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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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.💪🏻💪🏻💪🏻
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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. 📎
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