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Psychology

Taming The Bear 🐻 : Managing Market Declines 📛Markets have been a bit volatile over the past few weeks, and the future is uncertain. For many investors, these moves can be troubling because it’s been many years since we’ve had a substantial decline–whether we do or do not from the current point (and, for the record, I think it’s much more like the market surprises us with new highs sooner than anyone would think possible), we need to spend some time thinking about how to manage our portfolios and manage ourselves in a market decline. First, watch YOUR LANGUAGE •Labels are meaningless: Correction, pullback, —just words •Listen to the terms people use: fake, rigged, propped up, short covering rally. The words we use matter because they carry emotional meaning. UNDERSTAND MARKET PSYCHOLOGY •Market moves are mostly emotional. If you don’t understand that, you’re doomed to be at the mercy of the market. •The news doesn’t matter (for prediction.) You need a plan for how you read the news! •Market movements arise from competitive action of traders driven by both reason and emotion. This is why the market creates such emotional reactions in traders and investors. •The “permabears” are interesting (and dangerous). •Learn to monitor and understand your own emotions and reactions. UNDERSTAND THE REALITY OF THE MARKET •Markets are mostly unpredictable. No one knows what is going to happen in the future with any degree of reliability. •Best guide is statistics, but need to understand what this means: ~On average, stocks go up over long time periods. ~Hard to short stocks. ~Strange things happen on shorter time spans. ~What is predictable in the future is fuzzy and uncertain, and deviations can be large. •Most of the things people talk about follow the market, so they can’t be used to predict the market! ~The market is the leading indicator. (Dow) WHAT TO DO? •The biggest mistake investors make is selling into declines. ~How to avoid? Don’t do it. ~ Best plans are fading (going against) moves in stocks. If you implement this one rule, you’ll be ahead of the game. •Always use limit orders. Always. Always. •Buy at steep discounts, planning to hold for multiple years. ~Be a predator ~Buy “stupid” prices for things you are reasonably sure aren’t going out of business/away •Be your own manager. ~Break destructive patterns ~Stop mistakes before you make them CONSIDER SHORTING Shorting is not evil or (that) complicated, but this is a topic for another day . Listen To 'After Dark - MrKitty' Such A Nice Music in Time like this.....(this music is overrated lol) and Wishyou Profita- Strong In This Weeks.!! Sc: AdamHGrimes Podcast
SP:SPXEducation
by Zestiria
7
The Truth About LeverageIntro Trading with leverage simply means borrowing money to put on a trade. Leverage is one of the many tools available for traders who seek to generate higher gains on their capital. Brokers have strict rules that govern the use of leverage, but this article is not aimed at teaching you the complexities of borrowing from your broker. Instead, the aim herein is to teach aspiring traders when using leverage is appropriate. The Dangers of Leverage For traders who do not have excellent risk management, leverage is a highly dangerous tool that can lead to outsized losses. While brokers will only allow you to draw down a certain amount before you receive a margin call—a demand from the broker to add more capital or liquidate positions to increase free capital—such losses can still devastate most traders. Furthermore, many online influencers present unrealistic results by using extremely high amounts of leverage and then showcasing these results as easily obtainable for the average person, often without presenting the potential dangers of trying to mirror their exploits. The Complexities of Leverage The benefits of using leverage seem obvious. If you can borrow money for a trade you can potentially earn much higher percentages on your capital. If you have a $25,000 account and can borrow an additional $25,000 for a trade, you can conceivably earn twice as much profit on each trade. But let’s pump the brakes for a second. If a broker allows you to double (or more) your capital for a trade, does that mean it’s a good idea? After all, if you can double your gains, you can certainly double your losses. If a trader is using twice as much capital without thinking about how much they are risking the situation can get out of hand quickly. If a trader seeks to risk $500 on a particular trade, but they don’t properly calculate their position size based on the total leveraged capital, the trader can lose $1,000 instead of $500 with the same stop loss location. To make matters worse, the $1,000 loss is a much bigger blow to their $25,000 trading account than to a $50,000 account. The trader’s account is now $24,000, meaning they will only have access to $48,000 for their next trade. If this same process occurs a few times in a row it becomes much harder to gain back the lost capital. When To Use Leverage Trading with huge amounts of leverage, say 50x or more, and attempting to hit home run trades will almost always result in a devastating loss for new and struggling traders. For the average technical retail trader, leverage should only be used in a particular circumstance, and when done correctly, it can certainly help the trader rapidly increase their capital. When you have proper risk management and use a predefined risk on each trade, such as risking 2% of your account, leverage can play an important role. For instance, if your trading methodology places a stop loss in close proximity to your entry it’s very possible that your account capital cannot purchase enough shares to risk the desired amount. To illustrate this concept, let’s look at a basic example: Say you have a $25,000 trading account You risk 2% of your account on each trade for a dollar risk of $500 You take a trade where the stop loss is $2 below your entry (Risk per share) and the stock is $195 per share To risk the desired $500 you need to purchase 250 shares (Dollar risk / Risk per share) BUT... 250 shares would cost you $48,750, an amount that clearly exceeds your account size! This means you cannot afford to risk $500 on the trade. Without leverage you could only purchase a grand total of 128 shares. This is the only time it is appropriate to go all in on a trade—when you are able to go all in and still maintain a controlled risk parameter. Unfortunately, when you can’t afford to risk your desired amount, your entire profit taking routine is thrown out of whack. Let’s assume your profit taking regime states that you sell when you’ve gained twice your risk. Normally, you would sell the position when you are up $4 per share (twice the risk per share). Yet, because you could only afford to purchase 128 shares (not the required 250), a $4 gain per share will only produce a profit of $512—an amount that only gives you a 1:1 risk to reward ratio on this trade. In order to achieve your 2:1 risk to reward ratio you would have to gain $7.80 per share—nearly double the profit target. It’s by no means a guarantee that the trade will hit your increased profit target, and if you sell before this point you are altering your usual risk to reward scheme. Changing your profit taking regime or your risk to reward plan has a negative effect on your bottom line when looked at over a large sample size of trades. Leverage solves this problem. If you were able to use 2x leverage, you could suddenly afford the required 250 shares, and you could keep your usual profit taking routine intact. In short, leverage is a tool that allows you to maintain a consistent risk per trade even when your stop loss is so close to your entry that you cannot afford the required amount of shares. Special Considerations Keep in mind, leverage can still cause you to lose more than you are comfortable with when trading stocks. If you’re using twice the value of your account and you get caught in a gap down where price skips your stop loss location you can take an extra large loss. This is an important thing to consider, and is one reason some people only use leverage when they trade large ETFs such as QQQ, or when they trade a market that trades 23 hours per day, such as futures. These ETFs do not experience extra large gap downs because they are less volatile, and futures hardly have any gaps. Gaps on big diversified ETFs are almost always easier to recover from than a huge gap down on some other stock. For example, say you’re in a 2x leveraged position attempting to risk 2% of your account, but you get caught in a gap down on QQQ when price opens 1% below your stop loss level. In this case, you would lose 4% of your account. While this is certainly not ideal, it is completely possible to recover from this larger than expected loss. If you get caught in a 20% gap down on NFLX or a 10% gap down on TSLA while using 2x leverage your account will be devastated. For this reason, we only consider using leverage on large diversified ETFs or futures, even when we are using the methods covered in this article. In the data section below this post you can observe what a small amount of leverage (2x) can achieve. Without this small boost in capital, the gains are 69%, and while nothing to scoff at, the 2x leverage makes all the difference. These additional gains use the exact same risk parameter and we did not expose ourselves to any additional or undue risk.
NASDAQ:QQQEducation
by Level8Trading
Trading Is A Game of NumbersIntro Most retail traders fall into the category of technical traders—we use technical analysis to identify market patterns and hope to profit from the outcome. As a technical trader, most individuals over emphasize the importance of patterns, and this often results in an endless search for a strategy that has the highest possible win rate. While this seems like a common sense approach, there is no such thing as a trading methodology that always wins. Attempts to seek the “perfect” strategy causes most traders to overlook the true source of success. The Game The Cambridge English Dictionary defines a “numbers game” as: “A situation in which the most important factor is how many of a particular thing there are” In trading, the game is: How many trades you win and lose How much you gain when you win, and how much you sacrifice when you lose Despite the elegant simplicity, new and struggling traders are not able to think this way. Why do so many traders struggle with the concept of a numbers game? I believe it’s because traders view the market as a predictable and stable environment that should respond to various forms of analysis in a consistent way. Therefore, anytime the market does not behave the way a trader anticipates it should, the trader is forced to conclude they are doing something wrong. If the trader happens to put on three or four losers in a row, they will likely abandon their entire approach and start from scratch. Such behavior seems logical. After all, if a trader loses four times in a row there must be something wrong with their approach, right? For those who are trading randomly with no real game plan, consecutive losses can certainly indicate a poor methodology. However, if the trader is using a full fledged out strategy that has produced historical gains on the ticker in question, it’s just as likely that they’ve been caught in the randomness and volatility of the market. If the trader is using a controlled risk parameter, like risking 1% of their account on each trade, 4 consecutive losses is only a drawdown of 4%. With proper risk and profit management, it should only take 2 consecutive winners to pull back those losses. In fact, I have personally experienced 4 losses in a row, followed by 4 winners in a row using identical trading variables. Had I changed a single variable to hypothetically avoid 3 of the 4 losses, I would have also missed 3 of the winners. Let’s illustrate this example with real numbers. My risk was a maximum of 2% of my trading account, but my strategy defines moments when to exit early to minimize losses. My first target was 1.5 times my risk, and my second target was a trailer so I could ride out potential winners to the maximum extent. 4 consecutive losses produced a drawdown of about 7% 4 consecutive winners produced a gain of 26% Total gain of about 19% If you go to the data window below this post, and click on the List of Trades tab, you can see for yourself how this looks. In addition, the performance summary tab shows you that my average losing trade was about $400, and my average winning trade was $957. Furthermore, the largest winning trade was over $2400 because I used a trailing stop loss. Had I stopped trading this strategy, or began altering my variables, I would not have experienced the winning trades. While most people focus on avoiding losses, they fail to realize that hindcasting (using hindsight to adjust your strategy) can result in missing many winning trades as well. It’s a delicate balance between winners and losers. Remember, trading is a numbers game, and to win a game of numbers, you must think over a large sample size.
OANDA:NAS100USDEducation
by Level8Trading
Successful traders think like chess playersEvery day I get many questions from traders and more than half of them are: "What will X asset do today, will it rise or fall" or "Do you think X asset will reach Y price?" With very few exceptions, I say "I don't know". Surely my interlocutor will think that I don't want to tell him/her or that I'm an idiot. In fact, the correct answer is another: "I don't care" And now, dear reader, you will think not that I am an idiot, but a complete one. But bear with me a little more and let me explain using a real trading example on EurUsd Let's say we consider taking a trade on this pair so, we ask ourselves what do we know about it? 1. Fundamentally the USD is favored 2. The trend is down for more than a year. So, we want to trade in the direction of the trend and sell this pair Looking closely at the chart we see that EurUsd is contained in a downwards channel and recently found support in the 0.99 zone. Last week, the pair corrected and reached a high at 1.0150 and reversed exactly from the channel's resistance, leaving a nice and strong bearish engulfing on our daily chart. Going further with our judgment, where do we want to sell this pair? Now, considering my approach, I see a good place to sell in the 1.0030-1.0050 zone. So we set a sell limit order in that zone (Remember, professional traders use pending orders) We also consider at this moment the point where our bearish outlook is negated. We get 1.0150 for our stop loss. Now, using again my personal trade, let's say we set the selling order at 1.0030, with a stop loss at 1.0150 we have a potential loss of 120 pips. We know that every pip move on EurUsd represents 1usd for 0.01 volume, so 12usd potential loss on 0.01 trade for our trade. Now, let's consider volumes. What potential loss are we "comfortable" with? For the sake of example let's say 120 USD, so a 0.1 volume. Now let’s see where we can take profit. 0.97 zone is the falling channel's support, so there. Looking at such a trade we have 120 pips or 120 USD potential loss with 330 pips or 330 potential profit. This gives us a close to 1:3 risk-reward ratio, a very good one. And now, maintaining the analogy from the title is the market’s “move” turn And the market can do only 2 things at this point: fill our pending order or not. Considering that I don't hold pending orders after NY's close, if the market doesn't reach my level by then, I will remove the order, and tomorrow I will start over again by analyzing the market. The second is to trigger our limit order as is also the case for my trade, and we are in a running trade now. Now, with a trade running is again the market's move. So, what are the possible scenarios? 1. The market rises and hits our SL. Although an undesirable scenario, we knew from the start that it’s a possibility and like every trade, this also carries a risk. We considered it and assumed it from the start and didn't trade more than we could afford to lose in a trade. So, we take it like a stoic and move on to the next trade and market analysis 2. The lovely scenario in which EurUsd breaks 0.99 support and falls to our target. So, our reasoning was correct and we now have a trade that brought 330usd in our pocket, but more importantly we traded disciplined with a good R: R 3. The market falls below 0.99 but reverses. Now we can also consider some action - Move SL in BE and let the trade run - Close half to get some money off the table and move SL into BE - Close all trade In conclusion: As you can see, you don't need to be Gary Kasparov to be a good trader, the market's "moves” being in fact just a few. All you need to do is to be aware of these moves and have a plan for each of them. This way you will not end up wondering every minute "where will EurUsd go, it will rise, it will fall", you will not trade emotionally or recklessly. As Benjamin Franklin once said: "Those who failed to plan, plan to fail", but it is not your case, because, as a good trader you always trade with a plan and know from the beginning all that the market can do. Best regards! Mihai Iacob
Education
by Mihai_Iacob
17
EDUCATION WHAT IS DRAWDOWN | 3 Types Of Drawdown ExplainedHey traders , is it drawdown . The account drawdown is the highest observed loss from the highest value of the deposit to the lowest value of the deposit at a certain period of time . Imagine you started to trade with 10,000 $ account . At the end of the year , your account size reached 15,000 $ . 1 However , at some point through the year the deposit value dropped to 6,000 $ . It was the absolute minimum for the one - year period . At some point , your net loss was -4,000 $ or 40 % of your account balance . The account drawdown is 40 % . ! Knowing the account drawdown is very important for the risk assessment of the trading strategy . Usually , 50 % and bigger drawdown signifies an extremely high risk . There are 3 types of drawdown to know Current drawdown - a temporary drawdown associated with the negative total value of opened trading position ( s ) at present . Once you start trading with 10,000 $ deposit , you open several trading positions . Being opened , with the constant price movements , your potential gains fluctuates from positive to negative . For examples , with 3 active trades : EURUSD ( -500 $ at present ) ; GBPUSD ( + 200 $ at present ) ; GOLD ( -100 $ at present ) your current account drawdown is -400 $ or 4 % of your deposit . Fixed drawdown - the negative value of the closed trading position ( s ) at present for a certain period of time . While some of your trades remain active , some are already closed . Imagine the same deposit - 10,000 $ . On Monday you opened 6 trades , 2 still remain active and 4 are already closed . Your total loss from your closed trades is -500 $ . Your fixed Monday's drawdown is 5 % . Maximum Drawdown - the maximum observed loss from
CRYPTOCAP:TOTALEducation
by dr_heidary
Understanding Yourself In Trading 🌼A Short Post about Psychology. Some people dismiss this area but in my opinion it is a huge determining factor as to whether someone will make it or crash and burn as a trader. In meeting many new traders I find that most questions that they pose revolve around trading systems and how to make the most money from the market. Rarely am I asked questions related to the mentality and mind of a trader which we all soon discover in our trading journey is a major facet that will determine if we will be successful or not. In this post I wanted to illustrate the importance of trading psychology and understanding your own mental parameters by using the experiences of 3 different traders that I met. THE FIRST TRADER The First Trader I ever met was veteran bank trader who had little formal education, was divorced, drank too much and enjoyed drugs. I was shocked as to how someone with excessive habits like this could have had such a long trading career. It was not too long into my trading journey that I discovered that this type of individual was common place on the trading floor. I spent much time with this trader to try to pick up any useful tips or what trading system he used. I noticed that he placed very little weight on technical analysis (walk onto the FX trading floor of any bank and ask them what they think of the RSI indicator and the stochastics - most won't have a clue what you are talking about and the rest will probably say something obscene!). He traded more based upon ' gut instinct ' of the market that was developed over considerable time. His key to success was learning over time price behaviour (price action). In addition he told me that he never trades when he has a hangover, is high or had a recent arguement with his ex-wife !! How true it is that events taking place in our lives outside of our trading can have a major impact upon our trading. How many traders have traded whilst angry at the market and then make a trade to try to get one back only to further their losses. How many people have traded whilst convinced that their broker is out to get them only to make more bad trading decisions. How many have traded at times when their life is undergoing major changes only to lose the necessary concentration and confidence that it takes to be successful. THE SECOND TRADER Another trader that I know told me that he went to a seminar about swing trading and came back from the seminar fired up that he was going to change his method to swing trading. Convinced that this was the path to greater profits he began to research various swing trading systems until he finally found one that he was going to adopt. After failing miserably and having to go back to day trading that had been working for him he told me why he had failed. He said that he would spend time researching a possible trade and then would execute with the various stop loss/ take profit parameters in place. He said that he found himself lying awake at night wondering what the market was doing and would get out of bed and check on his trade. He said that he also would execute a trade and then panic when the trade went against him because he could not wait for the big swing that he was expecting. Finally he concluded that this style of trading just was not good for his personality and went back and resumed his day trading style and was able to sleep at night again without worrying what was happening in the Asian session! This reminds me of the old adage ' if it aint broke then don't fix it '. How often are traders enticed away from models that have been working for them in favor of the latest or most fashionable indicator. If your trading model is working and making you money then keep doing it. Secondly it is important that your trading method works within the parameters of your own mentality. Whilst you can work on changing your mentality it may be better to understand yourself and adapt a style or method around yourself as opposed to trying to adopt someone elses mentality. THE THIRD TRADER The Last Trader that I met is one that I met recently. This trader told me that whilst he has had some success this was somewhat diluted and in some cases replaced by his losses. His money management strategy was reasonable but it became apparent to me the more we chatted was that he was lacking in a key area that is essential if one is to become a successful trader - CONFIDENCE . Every time his trade was up 10 pips he would exit the trade being afraid that the trade would turn against him and every time the trade was down 5 pips he would exit afraid that it would get worse. This is a common obstacle in trading because no one can say with 100% accuracy where the market is going. If they could they would have all the money in the world (if you have Accuracy 100% Congratulations). Lack of confidence will destroy you as a trader. Confidence needs to be developed over time and in trading it does not come over night but it can be developed as we understand the market better. One way to boost your confidence level is to thoroughly research your trading model - know it inside and out and especially know how it responds around the vulnerable areas because all trading models have an achilles heel and it is how you handle those points which is vital. FINAL WORDS Well there it is folks just a few things that I have picked up along the way in the wonderful world of trading. If this business was easy everyone would be doing it but over time and with the right approach and mentality success (whatever you define it to be) can be achieved. Wish you all the best in becoming the best trader YOU can be. Enjoy Your Weekend 😸😸 -Monaco SOURCE : Monaco 2006 FF PngAAA
AMEX:SPYEducation
by Zestiria
16
📖 STEP 5 to MASTER TRADING: Create a Checklist 📖 🟩 Checklist is the necessary and essential part of your trading plan 🟩 If you already have a trading plan - that’s really great. Now it’s time to take one step further and create a checklist. You will refer to it before each and every trade, and you’ll enter only if 100% of the checklist is present. You can have different kinds of trading plan, it can have 5 or 50 pages - and it will describe your overall approach. Unfortunately, when it comes to executing your edge in the market, it’s very easy to bend your rules “just a little bit”, and all of a sudden you find yourself taking trade that is only a distant reminder of your actual trading setup. Most traders will damage their account not because their strategy is bad but because they start to take random set up outside of their trading edge. Blowing the account usually doesn’t take more than several hours of emotional trading. So that’s why it’s essential to have a short and clear checklist, usually up to 10 sentences usually that describes, point by point, what your trade entry looks like. You can even check every point before entering a trade (I do it). Of course, with time you’ll perfectly remember that checklist, but it’s also important to honestly follow it without checking every time, and the rule-following skill itself is a separate topic. 🟩 You're trading randomly if you don't have a checklist 🟩 Think about it. How many traders are constantly looking for “something else”, one more strategy. Instead of grinding deep into some specific concept, pattern or trading system, they will run to the next one with the first normal losses. They are running on the surfice for years instead of going deep to the core of trading - which, in my opinion, is the perfection of one strategy. Sometimes they even find what they like and what starts to show some kind of results. But then some time passes, and after any kind of emotional stress (would it be euphoria after a winner or fear and anger after a loser), he can start to deviate from his rules. A beginner can be so emotional that he can enter random trades, one after another, in the course of a few hours, destroying a big part of his account. There are a lot of other issues behind such inefficient behavior, however, a checklist is one of the first steps to handling it. Because if you don’t truly know what you’re looking for at the market, you’ll take the first trade you’ll find. 🟩 "Right or wrong" mentality is a fundamental flaw 🟩 You’re only right when you’re following your rules, and you’re only wrong when you take random setups. Again: even if you have a loser but you followed your setup - you're right, and even if you have crazy profit but it was a random trade - you're wrong, because this approach is not stable long-term. Yes, traders do predict the price movements in a way, but only as a side effect of following their rules and executing their system. A trader will not be fixed on his predictions, and because he drew a box or a line, he will not expect the market to obey his colored drawings. A trader’s job is to take a setup based on his experience and testing, and he should let go of the expectations and his trade, managing on the way of course. This is a very deep question, in my opinion, and deserves a separate post later. That’s why next time when you’ll see someone asking: “Should I buy or sell sir?”, you can surely tell the person is in the very beginning of his journey. 🟩 How to create a checklist? 🟩 Take a moment and describe in the short form how does your entry look like. What are your rules for Structure, Zones of interest, what is your entry confirmation, and what is your risk and management? I like to actually checkmark every point before each of my trades, so I’m sure I’m following my plan. Here’s an example of what my checklist looks like: 🎁Bonus for everyone still reading :) If you’re struggling with any discipline issues, ask yourself a question: “If I would receive a fully funded 100k account, for free, would I start to follow my rules and would I be more disciplined than I am now, and would I start “trading the right way” at last?” Try to be honest with yourself. It may seem strange, but many novice traders think that something should happen before they will “really stick to their plan”. It could be “just one more good winner”, or “if only I had bigger capital”, or “when I finish this yet one more educational course’’ - and AFTER that I’ll do what I know I should be doing. So, if your answer to that question is yes, then this is a clear indication you’re still in a very beginner mindset. Try to realize that ANY external change will not change the way you are. You need to change yourself FIRST, the way you behave in the markets and your mindset, and then everything external will follow.
BITSTAMP:BTCUSDEducation
by Yelli_trades
19
What Is Psycho-Cybernetics And Why It Is Important For TraderAnd No....This Is Not About a Robot trading or Artificial Intelligence thing...Speaking of robot This Is Reminds Me Of One Of Episode In Spongebob Series.. anyways Back To The Topics. (This Is Gonna be a Long Journey & Using TradingView App Is Recommended.) From Book Psycho-Cybernetics By Maxwell Maltz Psycho-Cybernetics is the first science of human development – a system of knowledge that will allow you to make accurate, predictable changes in how you think, how you feel, what you do and the amount of success and enjoyment you get out of life. Cybernetics moved human development out of the realm of wishing , hoping , and undependable You’ll find no wishing and no hoping in Psycho-Cybernetics . Psycho-Cybernetics has been proven successful by the millions of people who have Psycho-Cybernetics works at a fundamental level, and the changes it produces effects all Cybernetics has many uses for improving life beyond the trading arena. The more you learn how to master Psycho-Cybernetics , the more you can expect to: Psycho-Cybernetics will not produce these changes overnight. It takes time to learn the new ways of thinking and acting so that they become automatic in your life, but you’ll begin to experience positive results almost immediately. Psycho-Cybernetics is easy . You’ll see that the techniques do not involve willpower or difficult effort. (Like Do-Nothing Technique In My Recent Post) The exercises and methods of Psycho-Cybernetics utilize your creative imagination in a relaxed, playful way. They’re simple to learn and fun to do, and like any skill, the skill of becoming your best self grows easier with practice. The science of Cybernetics gives us a very effective way to look at the Human Brain and Nervous System . Our subconscious mind is actually a goal-seeking Servo-mechanism , in other words An Automatic Human Guidance System . Psycho-Cybernetics is the science of this human guidance system. This Servo-mechanism has access to everything we have ever seen or done, tasted, smelled, felt and learned. It is all recorded in our brain. If you provide this servo-mechanism with a goal, it will automatically produce the means to achieve the goal. So human beings are naturally cybernetic, or goal-seeking beings. It’s the way we are created. THE IMPORTANCE OF MISTAKES All automatic guidance systems reach their goals by constantly correcting mistakes. guided missile on its way to its target has sensors that detect when it’s off course. The guided missile relies on this negative feedback to guide it to its destination. Without this negative feedback, a guided missile would actually not know where it was going The same is true for the human servo-mechanism. Discouragement when actually the mistakes we make are exactly the information that our servo- mechanism needs to make the necessary corrections to take us to our goals. Your servo-mechanism has no opinion one way or the other about mistakes. An important part of Psycho-Cybernetics is learning to use mistakes creatively and to remove the negative feelings that mistakes cause. SELF-IMAGE The destination or goal of a guided missile is a set of coordinates programmed into its computer.The goals that program our creative servo-mechanism are mental images, mental pictures, voices and feelings which we create by the use of imagination. The most basic and important mental image that we use to program our servo-mechanism is our self-image . Our self-image is our mental blueprint or mental picture of ourselves. We don’t usually pay attention to it consciously, but it is there outside of our conscious awareness in great detail. This self-image is our concept of “ the kind of person I am .” It is constructed of our beliefs about ourselves, beliefs that have been unconsciously formed from our past experiences, our triumphs and failures, our successes and disappointments, and also by our observations of the way other people reacted to us, especially early in childhood. From all this raw information we construct a “ self ,” “ who we are ,” our self-image . Once an idea or a belief about ourselves becomes part of this self-image , we accept it as being true. We don’t think to question it so we act as if it were true. Our self-image determines our thinking, our feelings, our actions, even what we think our abilities are. It controls the amount of success, excitement, joy, and satisfaction we have. The kind of life we have, even the kind of world we appear to live in, are determined by our self-image . Self-image explains why positive thinking is so undependable. It explains why willpower is so ineffective and difficult to maintain. Because all the willpower and positive thinking in theworld cannot produce change and success if they don’t match our self-image . Our self-image is constantly programming our creative mechanism. If your self-image is that you are a failure, your servo-mechanism will find a way to deliver that result to you. If your self-image is that you are a victim of circumstance, that will be reflected in your life. If, on the other hand, your self-image is that you are capable and successful, your creative mechanism will produce those results. The science of Psycho-Cybernetics teaches you to change and to create a self-image that is strong, caring, productive and capable. A self-image that is realistic and reasonable, and expresses your best self, your true self. IMAGINATION – THE TOOL OF CHANGE You built your current self-image from the vivid and detailed mental pictures and feelings you’ve experienced in connection with the events of your life, especially in childhood. And you’ll use the same powerful tool, your creative imagination , to construct the kind of self-image that expresses the best of you. You will use your imagination to create images and feelings of success, satisfaction, accomplishment and strength, and with these new positive images you will re-program your servo-mechanism so that it begins to produce results in accordance with your new self-image . You’ll learn to use your imagination in a relaxed, playful way, never straining, never trying too hard. This process will take time – you didn’t construct your current self-image overnight. But soon the new programming will begin to take. You will feel yourself beginning to think, to feel, and to act in accordance with your new successful image of yourself. Eventually, this new self-image will become second nature, completely natural and spontaneous, and it will bring you success, satisfaction, enhanced relationships and happiness quite automatically for the rest of your life. In Trading if you have a clear picture of yourself as a successful trader, that will go much farther than you can imagine in getting you to become and remain a successful, profitable trader. You will need to learn how to see that picture clearly in your mind. It is the only way to achieve success. THE SUCCESS MECHANISM AND THE FAILURE MECHANISM We’ve previously discussed the servo-mechanism , the goal seeking mechanism that is inside of all us. We know the servo-mechanism works like an electronic computer to help us reach our goals. But the servo-mechanism can either be a success mechanism or a failure mechanism. When it is working as a success mechanism, it is helping us to reach the goals we want to help us improve our lives. As you already know, we use our creative imagination to vividly picture these goals, and our success mechanism helps us to accomplish these goals. On the other hand, if we vividly picture the things we are trying to avoid, the troubles we are having and, in general, our worries, then it only makes sense that we will receive more of the same negative things in our lives. Like we said a little while ago, our servo-mechanism is completely impartial. It takes what we vividly picture and works extremely hard in making those pictures reality. If you picture positive goals, it will work like a success mechanism and help you to reach those goals. But if you picture negative things (like many people do most of the time), it will work just as hard at making those negative pictures come true, and that is the failure mechanism at work. In regards to trading, if you are constantly making trading mistakes and not acting in your own best interest, then it seems obvious that the failure mechanism is at work. On the other hand, if you are acting in your own best interest and avoiding most trading mistakes, then it would seem as equally obvious that your success mechanism is hard at work. In Psycho-Cybernetics , Dr. Maltz lists the basic principles by which your success mechanism operates: FORGIVENESS One of the biggest problems I see with traders is that they refuse to forgive themselves for trading mistakes. This causes a much bigger problem than most people realize. You see, when you make a trading mistake, you need to forgive yourself for making that mistake. But the thing is many people do not forgive themselves for their mistakes. In fact, they do quite the opposite. They beat themselves up and continually picture what they did wrong in vivid detail. This is the very worst thing you can do after making a mistake, trading or otherwise. Forgiveness is a key concept in Psycho-Cybernetics . As we’ve just learned about how our subconscious works, we know that if we continually picture in vivid detail something, it causes that picture to come true for us. Or it at least makes it much more likely for it to come true. So it only makes sense that if we make a mistake, we must forget that mistake and forgive ourselves completely. If, on the other hand, we don’t forgive ourselves and relive the mistake in our minds again and again, what do you think is going to happen? It’s obvious that we will repeat the mistake. This happens because our subconscious does not care whether we give it good or bad information, it simply sees the clear pictures we give it and tries to act it out in our lives. Obviously, it can only act this picture out if it’s within our capabilities. And I think we all know that making trading mistakes is quite within our capabilities. This is the reason it is so important to forgive ourselves when we make a mistake or an error. If we don’t, we are likely to relive the mistake in our minds and then most likely project it onto our trading. This will cause big problems. If you think back, I’m sure can you think of times where you made mistakes and beat yourself up for it. Not forgiving yourself, no matter what the mistake, will bring out the worst emotions. Remorse, regret, self-doubt, and guilt all come with not forgiving ourselves for a past mistake. You’ve heard it all before. I’m sure you’ve been told to forget a past losing trade and move on to the next one. Emotions are used correctly and appropriately when it applies to something in the present time. Since we cannot live in the past, we can’t appropriately react emotionally to the past. As Dr. Maltz says, “ The past can be simply written off, closed, forgotten, insofar as our emotional reactions are concerned ." We do not need to take an emotional position one way or theother regarding detours that might have taken us off course in the past. The important thing is our present direction and our present goal. We need to recognize our own errors as mistakes. Otherwise, we could not correct our course and steering or guidance would be impossible. But it is futile and fatal to hate or condemn ourselves for our mistakes. One of the biggest reasons people get into losing streaks while trading is because they confuse their losing trades with themselves. In other words, we conclude that because we had a losing trade or a series of losing trades, we are a losing trader. But the important thing to remember here is we are not our losing trades. Losing trades are part of trading. There isn’t a single trader in the world who doesn’t have losing trades. The only way to avoid them is not to trade in the first place. You cannot be a successful trader until you take mistakes and losing trades for what they really are. They are simply by-products in the trading game and need to be used to gain learning and understanding. But in no way do they define us as a person. But that is where the big problem comes in. Many people let their losing trades and mistakes define them. If they’re having trouble and have had a series of losing trades, they start to think of themselves as a loser. They continually think of themselves in that way. As we know from before, this kind of thinking will just bring on more of the same. Forgiving yourself completely is the only way to avoid this trouble. You are not your mistakes and losing trades. You must put the past behind you and go forward. Holding a grudge against yourself only hurts yourself. Forgive yourself, it’s the only way to be successful . ---END--- Thank For Reading This, Haha, Pretty Long Journey Isn't It? I hope You Find Something Useful In Here, I Will Upload Again In 2 Weeks (Pretty Busy Times) Have a Nice Weekend and Wish You Profitable Weeks!! ☺️. Main Source : "The Secret To Emotion Free Trading" By Larry Levi "Psycho-Cybernetics" By Maxwell Maltz Images : PngAAA Spongebob Series ChaosFissure Matkraken MarcSimonetti Zvyrke fabianrensch JPPestServices
AMEX:SPYEducation
by Zestiria
11
Trading needs to be treated like a business 🧑‍💼This is spoken about a lot but what does it mean?⁠ In starting a business you would need funding and a business plan, right?⁠ ⁠ You would have realistic goals mapped out and be focused on your cashflow.⁠ ⁠ You wouldn't blow your 'cash' in recruiting too fast, or buying too much stock or spending too much on marketing.⁠ ⁠ Yet, in trading most don't have a plan. Or focus on protecting their cash.⁠ ⁠ They also don't think long term in line with their plan.⁠ ⁠ They over estimate their expectations short term and in doing so mess up what they could achieve long term. ⁠ You just wouldn't do this in business right? No one would open or run a business you knew nothing about. Most come in to trading thinking this will be easy! It's not and we all come in knowing nothing. So again would you start any other business with no training or idea? Most can keep the trading cash flow topped up as we all start out on this journey having another job to fund trading. There is no such thing as a sure-fire way to make money online. However, if you seriously want to make money out of forex trading it needs treating like a business. In a lot of ways, being a trader is like being an entrepreneur. It takes more than just knowledge and a killer idea. It also takes hard work, discipline and mental preparation. The reason it’s a good idea to treat forex trading like a business is because as a trader, your account is your own business. Trading isn't about the quick money it's about being consistent. That consistency comes from having a plan and sticking to it much like you would a business plan. Treat losses as a cost of business and factor them into the plan. The business plan for you the trader will be the strategy and risk management you opt to run. Set realistic targets and goals this will ensure suitability, Much how good businesses set up there own goals and aims for coming year with out being to risky. If you lack on the knowledge front in certain areas invest in education and training, No successful business neglects training and learning. Invest in resources that will help your business grow. Yes TradingView is free but having a higher package and more data help me just as an example. There is no other business in the world like trading where the over heads and start up cost are low, So if paid resources can kick you on to next level factor them in as a cost of business. Keep treating trading as a hobby and it becomes an expensive one. Start treating trading as a business with the ethos and cultures applied the same as those of successful businesses and that profit starts to come naturally. Thanks for taking the time to read my idea. Hope you all have a good weekend Darren 👍 ⁠
Editors' picks
Education
by pow_removetheguesswork
60
SHIBUSDT - Dunning Kruger Effect with PepeHi Traders, Investors and Speculators 📉📈 Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. Daytime job - Math Teacher. 👩‍🏫 In today's analysis, we're taking a look at the Dunning Kruger Effect. Dunning-Kruger effect, in psychology, is a cognitive bias whereby people with limited knowledge or competence (in a given intellectual or social domain) greatly overestimate their own knowledge or competence in that domain relative to objective criteria or to the performance of their peers or of people in general. This happens in trading all the time. In fact, we probably all started there if we're being honest. So - What causes the Dunning-Kruger effect? Confidence is so highly prized that many people would rather pretend to be smart or skilled than risk looking inadequate and losing face. Even smart people can be affected by the Dunning-Kruger effect because having intelligence isn’t the same thing as learning and developing a specific skill. Many individuals mistakenly believe that their experience and skills in one particular area are transferable to another. Many people would describe themselves as above average in intelligence, humor, and a variety of skills. They can’t accurately judge their own competence, because they lack metacognition, or the ability to step back and examine oneself objectively. In fact, those who are the least skilled are also the most likely to overestimate their abilities. This also relates to their ability to judge how well they are doing their work, hobbies, etc. The Dunning-Kruger effect results in what’s known as a double curse : Not only do people perform poorly, but they are not self-aware enough to judge themselves accurately—and are thus unlikely to learn and grow. So how can we prevent ourselves from falling into this trap? Here's a few things to keep in mind: To avoid falling prey to the Dunning-Kruger effect, you should honestly and routinely question your knowledge base and the conclusions you draw, rather than blindly accepting them. As David Dunning proposes, people can be their own devil’s advocates, by challenging themselves to probe how they might possibly be wrong. Individuals could also escape the trap by seeking others whose expertise can help cover their own blind spots, such as turning to a colleague or friend for advice or constructive criticism. Continuing to study a specific subject will also bring one’s capacity into a clearer focus. Practice these habits to ultimately escape the double curse: - Continuous learning. This will keep your mindset open to new possibilities, whilst increasing your knowledge over time. - Pay attention to who's talking about what. Is the accountant talking about bodybuilding? - Don't be overconfident. This is self explanatory. I hope you enjoyed this post today! Please give us a thumbs up 👌 _________________ 👀 Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎 👍Hit like & Follow 🔔 We thank you for your support ! CryptoCheck
Education
by CryptoCheck-
42
ETH/USD Main trend. Accumulation/Distribution. Pivot pointsThe chart shows the main trend (most of it) of this cryptocurrency. The timeframe is 1 week. Most people "trade" and do not understand the profit values of the price from the real set zones (not hamsters). Also shown are the recruitment zones (horizontal channel) and partial reset zones (until the triangle decoupling) of previously gained positions of large market participants. The last video explained this in detail and showed it on the example of this coin. Even taking into account that this triangle (1.5 years) is a position reset. That doesn't mean that this formation must necessarily break down. But, this is something to keep in mind, especially the +3600%. Volatility narrowing, that is, the end of triangle formation is a “doubt zone”—the “market fuel” (small and medium market participants) for the impulse is clamped down. That is, the decoupling of the triangle and the direction of further trend development. The price is clamped into a triangle. A formation of this magnitude will only unravel due to future world shocks, especially financial ones. Who knows, maybe this time there will be no correlation at all, as the time of "coming out of the shadows" approaches. Always trade within your working range (for example 1 day), always understand where the price is in the main trend. Based on this understanding, limit the risks, and make a decision about reducing (partial liquidation) or, on the contrary, about adding to the position. Locally on the 1-day timeframe a wedge is formed on the decline. I've shown all the decoupling options for this trading situation in detail in this trading idea, as well as in the video. ETH/USDT Local trend. Channel. Wedge. Pivot zones. Under idea fixed my previous trading as well as training/trading ideas where I accompanied the price in updates for quite a long period. Note the exact values and more. You can use the material in them as educational, based on reality. Remember, the basis of trading is not guessing (that's what everyone wants to do), but your trading strategy and risk management based on your knowledge and experience. Those who want to guess tend to lose money. Do not be such characters in the market, that is, its fuel. I wish all smart people a big profit, and wish all stupid people to wake up from the dream of stupidity.
Education
by SpartaBTC
6
✍️WEEKLY QUOTE: Can we change our beliefs about the market?✍️..Each time I experienced a conflicting thought and was able to successfully refocus on my objective, with enough conviction to get me into my running shoes and out the door, I added energy to the belief that "I am a runner." And, just as important, I inadvertently drew energy away from all of the beliefs that would argue otherwise. ..Beliefs can be changed, and if it's possible to change one belief, then it's possible to change any belief if you understand that you really aren't changing them, but are only transferring energy from one concept to another. Therefore, two completely contradictory beliefs can exist in your mental system, side by side. But if you've drawn the energy out of one belief and completely energized the other, no contradiction exists from a functional perspective; only the belief that the energy will have the capacity to act as a force on your state of mind, on your perception and interpretation of information, and your behavior. ..Remember that consistency is not the same as the ability to put on a winning trade, or even a string of winning trades for that matter, because putting on a winning trade requires absolutely no skill. All you have to do is guess correctly, which is no different than guessing the outcome of a coin toss, whereas consistency is a state of mind that, once achieved, won't allow you to "be" any other way. You won't have to try to be consistent because it will be a natural function of your identity In fact, if you have to try, it's an indication that you haven't completely integrated the principles of consistent success as dominant, unconflicted beliefs. For example, predefining your risk is a step in the process of "being consistent." If it takes any special effort to predefine your risk, if you have to consciously remind yourself to do it if you experience any conflicting thoughts (in essence, trying to talk you out of doing it), or if you find yourself in a trade where you haven't predefined your risk, then this principle is not dominant, functioning part of your identity. It isn't "who you are." If it were, it wouldn't even occur to you not to predefine your risk. If and when all of the sources of conflict have been deactivated, there's no longer a potential for you to "be" any other way. What was once a struggle will become virtually effortless. At that point, it may seem to other people that you are so disciplined (because you can do something they find difficult, if not impossible), but the reality is that you aren't being disciplined at all; you are simply functioning from a different set of beliefs that compel you to behave in a way that is consistent with your desires, goals, or objectives From Trading in the Zone by M. Douglas
COINBASE:ETHUSDEducation
by Yelli_trades
4
The Art Of Do Nothing In TradingSociety… it conditions us to continually chase money, power, and a faster, wilder pace of life. Don’t slow down, and God forbid don’t pause, don’t reflect. Keep chasing or you fall behind. Over-schedule, overthink, overwork… this is the mantra. This is supposed to be what progress is. This is supposed to be what success is. Early, we learn to believe that this is absolutely normal, and in due time it becomes an addiction. We can’t sit still for a moment. Just like any addict, sitting still and doing nothing makes us feel unproductive. We feel we’re losing time, so we become agitated. In trading, patience and the ability to sit still is not only a virtue, it’s gold. Doing nothing can be one of the most productive things you can do. But as one would expect, being the addicts that we are, the moment the trading session opens, we feel the urge to become more productive all of a sudden. It’s like our minds will not let us enjoy doing nothing. We have to analyze, anticipate, worry, stress, tweak, especially when we’re not supposed to THE REASON… You have thoughts, right? Have you ever noticed that those thoughts tend to occur constantly? Have you ever noticed that some of those thoughts are visual?– you have memories (past), plans (future), imaginations (fantasy) just popping up like that in that space you call mind. Have you ever noticed that you have sensations all over your body–in it and on it; pleasant, unpleasant; some physical, some emotional? Have you ever noticed that all these experiences–thoughts and sensations–are continuous? You’re constantly pulled to mental states and body states, and, most of the time, you’re not aware that you are. You’re automatically in the stories, you believe them, and they urge you to act in a certain way. Which you do. Have you ever noticed that too? Then, next thing you know, you’re entering your trades at the wrong time; you’re exiting at the wrong time; you’re removing your stop-loss; you’re increasing or decreasing your position size… essentially, you’re going against your trading rules. This is a problem because this lack of awareness of your urges is costing you money. Trading is mostly a waiting game where you have to strike only when the time is right. If you want action that happens on your own terms, you’re in the wrong field. As a trader, you simply can’t afford to lack self-awareness. The market does not hurry, it moves at its own rhythm, on its own time. And self-awareness helps you cultivate patience and ‘do nothing’ as that happens. This ability to let the market do its thing saves you time and energy. It allows trades to come to you. It puts a stop to the chasing. It embraces the natural order and evolution of things. But best of all, this is a learnable skill. Absolutely! Let’s try a little exercise… THE DO-NOTHING TECHNIQUE Posture : Right where you are. When : While waiting for your entry signal; while waiting for your exit signal. Instructions : Just allow your mind to do its thing. It will generate stories and your body will generate feelings urging you to behave in a certain way. Your aim is to tolerate being there with yourself without trying to change or control anything. Just be there. Let your attention go anywhere it wants. You can fantasize about the perfect trade that yields you 1000% return; you can worry about missing out on an incredible opportunity; you can fear a loss; you can think about nothing or everything. But notice it. Notice where your mind goes. Tune in to that part of you that simply notices what you’re thinking and feeling instead of being automatically captured by those different states. That observing quality of your mind notices things in a neutral way. Notice how it’s not entangled or captured by the different stories and mental and bodily states. It simply observes. Pure, neutral, unencumbered… And that’s it. That’s the whole technique! Now, the do-nothing technique is more readily applicable for day traders since they have to be in front of their screen during the entire process, from trade selection to exit. But swing traders and position traders can also make use of it. In fact, you can use it anywhere, anytime, in and out of the market. This technique helps you tolerate whatever your body and mind do, which helps you overcome impatience. Impatience is you trying to force things to happen by thinking them more strongly or more often, without paying very much attention to where things actually are at. On the other hand, when you’re patient, you’re a keen observer of what’s happening. You notice when there’s an opportunity for something to happen, and when there isn’t yet. You notice that things develop through different cycles, and different things happen at different points in the cycle. In other words, you drop the need to create action on your own terms, you only respond to the action in a systematic way whenever it appears. Now, a few tips… Tip #1 –This Takes Practice It’s OK if you find it hard to do the do-nothing technique at first, but this is where you start from. By the way, Tom Basso (hedge fund manager interviewed in The New Market Wizards uses a very similar technique. Tip #2 –You Are Intentionally Doing Nothing You do not even have to approach this as a meditation technique, although you are free to do so. Notice what your attitudes are, and do not defend yourself against anything. Whether you are bored, happy, tired, excited, anxious, fearful, greedy, restless, you welcome it all. Your goal is to just observe yourself experiencing those different states. You cannot fail at this. Tip #3 –Notice The Urge To Take Action If you have a lot of noise in your head, you may find yourself wanting to take action in some form – entering (or exiting) before you even get a trade signal. As said, all that “noise” or mental rehearsal is not a problem and is not to be resisted. When you resist the noise, it only gets louder. But just this act of noticing the noise is extremely powerful because it allows you to see what’s going on in your mind and body as if from a third-person perspective. This begets objectivity and you can then say “ Okay, this thought, or feeling, or urge is not in line with my trading rules, so I will not act on them .” The Bottom Line The Do-Nothing technique is simply about interrupting your impulsive behaviors. It’s cultivating a calm acceptance that things in life can and will often happen in a different order than the one you could be holding in mind. It’s keeping a good attitude while waiting for your pitch. And this all starts with awareness. Stay Safe & Good Luck Wish You Have Profitable Weeks!! Have Nice Days!
Editors' picks
AMEX:SPYEducation
by Zestiria
285
✍️WEEKLY QUOTE: How to be rigid and flexible at the same time?✍️ In what way does a trader have to learn how to be rigid and flexible at the same time? The answer is: We have to be rigid in our rules and flexible in our expectations 🟢We need to be rigid in our rules so that we gain a sense of self-trust that can, and will always, protect us in an environment that has few, if any, boundaries. We need to be flexible in our expectations so we can perceive, with the greatest degree of clarity and objectivity, what the market is communicating to us from its perspective. At this point, it probably goes without saying that the typical trader does just the opposite: He is flexible in his rules and rigid in his expectations. Interestingly enough, the more rigid the expectation, the more he has to either bend, violate, or break his rules in order to accommodate his unwillingness to give up what he wants in favor of what the market is offering. 🟢To eliminate the emotional risk of trading, you have to neutralize your expectations about what the market will or will not do at any given moment or in any given situation. You can do this by being willing to think from the market's perspective. Remember, the market is always communicating in probabilities. At the collective level, your edge may look perfect in every respect; but at the individual level, every trader who has the potential to act as a force on price movement can negate the positive outcome of that edge. To think in probabilities, you have to create a mental framework or mindset that is consistent with the underlying principles of a probabilistic environment. 💡 A probabilistic mindset consists of five fundamental truths.💡 1. Anything can happen. 2. You don't need to know what is going to happen next in order to make money. 3. There is a random distribution between wins and losses for any given set of variables that define an edge. 4. An edge is nothing more than an indication of a higher probability of one thing happening over another. 5. Every moment in the market is unique. From Trading in the Zone, by M. Douglas ❤️Please, support this post with like and comments!❤️
OANDA:XAUUSDEducation
by Yelli_trades
4
YOU SHOULD KNOW THISYOU SHOULD KNOW THIS Hello everyone! Today I would like to remind you of a couple of things, the understanding of which will definitely take you to a new level. Let's go! 1. 99% of newbies come to trading with a desire to make quick money and that's the problem. Trading is a long game. It's worth understanding right away and remembering. In trading, it is impossible to consistently make a double-digit increase in capital and at the same time follow reasonable risk management. 2. Without reasonable risk management, sooner or later you will lose ALL your capital. All professional traders follow risk management and as a rule do not risk more than 1% of the capital in one transaction. 3. Small capital will be a problem. As a rule, 90% of small capitals are burned in the forex market in the first week. All because it is difficult to follow the rules of risk management with a small account, largely because the profit will be scanty, and the time spent will be too much. Over time, you will get tired of wasting time and getting nothing in return, and you will start taking risks, thereby bringing your account to $ 0. 4. You will not be able to correctly predict the exact direction of the market every time. If you think it's possible, the market will kill you. No one can know the future and nitko cannot predict all market movements. But the good news is, you don't have to be right in every trade. 5. The right risk-to-profit ratio will take you to the top. In the market, it is enough to be right in 40% of cases if your RR in transactions is equal to 1:4. Only 4 deals out of 10 will help your account grow steadily. And the higher the RR, the better for your score, but don't flirt. Understand these principles now, and your trading will become more profitable today. Good luck. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
15
Trading Insights #2: The Truth About Technical AnalysisDebriefing In the first part of our Trading Insights Series, we went over the essential nature of probability and random distribution as it relates to trading. If you have not yet read part one, you should start there (Probability & Random Distribution.) Intro If you’re an aspiring trader, then you’re probably familiar enough with technical analysis to muster up a definition of some kind. Despite the widespread familiarity with the concept, technical analysis is often misrepresented. This entry to the series does not focus on developing trading variables or strategies, rather, it emphasizes certain concepts relating to technical analysis. We believe the concepts herein are imperative to understand before you can successfully create or execute a trading system. What Technical Analysis Is & Isn’t Traders use technical analysis to gain an edge on the market or achieve a positive expectancy. In other words, technical analysis aids your ability to tip the odds in your favor. Yet, technical analysis does not tell you what the market is going to do next. Anyone who puts forward this idea is grossly misrepresenting an otherwise excellent analytical tool. To know what the market is going to do next would require you to read the minds of the people who have the financial capability to significantly move prices. The people who can move the market in significant ways do not think like you or me and have their own goals and agendas that guide their actions. These individuals are often called “whales”, or “dynamic players”, and have substantial financial and mental capabilities that retail traders do not possess. Many of the reasons these individuals make trades would not even cross your mind, and they do things you would never consider as possibilities. In addition to the direct actions of “whales”, the modern market is heavily influenced by automated bots and trading algorithms. These bots are able to act quicker than humans and are programmed to react to information that big players deem important. Despite the fact bots contribute heavily to price action, these bots are created and used by "whales" and "dynamic players". The code within these bots is complex and continually updated. The cascading effect of all the "whales" who trade, and the bots they create, is the real force that moves the market in meaningful ways. Retail traders are extremely limited in their ability to move prices, and this ability decreases as the market cap of the company increases. For retail traders to have any large effect on prices requires an enormous flood of market orders that can take out all of the orders at higher or lower prices. Even when retail traders are able to affect prices, the impact is generally minimal. It is estimated that retail traders in the USA account for approximately 10% of all trading volume on the Russell 3000 index, for a total of about 38 billion dollars per day. That’s no small amount, but still only accounts for 10% of all trading volume. On a fairly normal day, to move TSLA from $944 to $998 required 22 million shares to trade hands. That’s a total of about 21 billion dollars. It would require over half of all retail traders that participate in the Russell 3000 put their entire buying power on TSLA, while also having the willingness to buy at the asking price, to achieve this feat. I think everyone can agree this situation is entirely unlikely. When we consider the sheer amount of stocks available to trade and then divide that 38 billion dollars among all popular tickers, we quickly realize how limited retail traders are in their ability to significantly move prices. Every long trade you make is dependent on "whales" willing to buy at a higher price and move the market up. Obviously, in a short trade, it’s the reverse. The Truth About Technical Analysis The intent of technical analysis is to identify behavior patterns in the collective consciousness of the market. In other words, the interaction of all market participants produces patterns you can use in your favor. A pattern is simply a clue that one outcome is slightly more likely than another outcome. Conversely, as many will find surprising, a pattern can indicate that the preferred outcome is equal to or slightly less likely than the undesired outcome, but the positive results of the pattern outweigh the negative results by a fair margin. In other words, the dollar amount from the winning instances is significantly higher than the amount lost on losing trades. Each instance of a pattern or technical signal is a unique occurrence, and the result of any pattern is unrelated to the previous instance of that pattern. The market does not move because of patterns, or due to signals from technical indicators. Patterns and indicators are, for the most part, not self-fulfilling prophecies. Patterns form because the people with the capability to significantly move prices (not you) leave traces of their behavior. A certain number of "whales" may use technical patterns in their bots and analysis, yet the way they use patterns and the reasons behind their actions are almost never transparent and certainly differ from the reasons you take a trade. When you end up in a winning trade it is not because your strategy told you what was going to happen next, and it is most certainly not because a few lines crossed on a visual chart. These technical signals will draw in retail traders who try to make money without moving prices, but in order for the market to move substantially, far greater forces are required. Nearly every profitable trade you make is because "whales" entered the market with the conviction and resources to move prices in the direction of your trade. In real terms, each behavior pattern has an unknown outcome and can result in an undesired result because the traders present at each instance of a pattern vary and may not be willing to act in the same way as they previously did. Random Distribution & Technical Analysis As we explored in part one, the outcome of flipping a coin is subject to numerous factors beyond our control, making each flip unrelated to the previous flip, even if we can rig the coin to favor a certain outcome. Market patterns work in the exact same way, with the caveat that behavior patterns are subject to even more forces beyond what we can control. As already stated, "whales" and "dynamic players" have the ability to significantly move prices and have their own agendas and intentions. Even amongst these large traders, there are vastly different perspectives and goals. This creates a substantial number of unknown forces acting on each trade you make. If trading was as simple as analyzing economic information and putting on a trade, all economists would be incredibly wealthy, yet they are not. Trading is not black and white. You may make correct predictions from time to time, but it does not mean the reasons behind your predictions were correct. While market patterns help tip the odds of earning money in your favor, they do not tell you what the market is going to do next. All of this adds up to the fact that, with any behavior pattern, the winning occurrences are randomly distributed through a set of occurrences.
NASDAQ:TSLAEducation
by Level8Trading
Specific Trendline to Determine the Direction of any MarketHow to identify the specific points for trendline to determine the direction of the market? In this example, I am using the Nasdaq index. You can use this trendline technique to any markets because its principles in this tutorial are applicable throughout whether to an individual stock, indices or even commodities. I am going to introduce the primary and secondary trendlines, I hope after this tutorial, it will bring greater clarity in how you can deploy them. Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. This method I just shared, it can be applied to any market and any timeframe, be it the minute chart or the weekly chart. Micro E-Mini Nasdaq 0.25 = US$0.50 1.00 = US$2
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CME_MINI:MNQ1!Education
by konhow
14
Weekly Quote | 7 Rules of a Consistent WinnerHello trader, here's a quote from the great book "Trading in the Zone". Hope you'll find some inspiration or maybe even practical advice here. I'm a consistent winner because: 1. I objectively identify my edges. 2. I predefine the risk of every trade. 3. I completely accept risk ($ risk, risk of not being right, not being perfect, being wrong, losing money, missing out, and leaving money on the table). If not - I am willing to let go of the trade. 4. I act on my edges without reservation or hesitation. 5. I pay myself as the market makes money available to me (take partials). 6. I continually monitor my susceptibility for making errors (emotional pain or euphoria). 7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them. Best Regards, Dima
OANDA:XAGUSDEducation
by Yelli_trades
2
📌Prospect theory; what is it? Humans are not psychologically good traders by nature ! Have you ever wondered, why trading with real money is overwhelming for you?! The reason should be sought in the psychological aspect of the case. If you lose amount money in the market, you must gain several times ,so the feeling of happiness overcomes the pain of your initial loss! although all traders, even successful traders, have tasted loss and it is an inevitable part of the trading journey !But the successful traders have learned how to control the psychologically of it and not be limited by the feelings of a loss! Prospect theory : also called loss-aversion theory is a theory of behavioral economics and behavioral finance that was developed by Daniel Kahneman and Amos Tversky in 1979. .Daniel Kahneman the author of ' Thinking, Fast and Slow ' book is a Nobel Laureate in Economics who is a psychologist by training. He won the prize mostly for his work in decision making, specifically Prospect Theory. This book distills a lifetime of work on the engine of human thinking, highlighting our cognitive biases and showing both the brilliance and limitations of the human mind. This summary attempts to capture some of the more interesting findings. Based on results from controlled studies ,he describes how individuals assess their loss and gain perspectives in an asymmetric manner (see loss aversion). For example, for some individuals, the pain from losing $1,000 could only be compensated by the pleasure of earning $2,000 or even more. Thus, contrary to the expected utility theory (which models the decision that perfectly rational agents would make), prospect theory aims to describe the actual behavior of people. In the original formulation of the theory, the term prospect referred to the predictable results of a lottery. However, prospect theory can also be applied to the prediction of other forms of behaviors and decisions. Prospect theory: stems from Loss aversion, where the observation is that agents asymmetrically feel losses greater than that of an equivalent gain. It centralises around the idea that people conclude their utility from "gains" and "losses" relative to a certain reference point. This "reference point" is different for each person and relative to their individual situation. Thus, rather than making decisions like a rational agent (i.e using expected utility theory and choosing the maximum value), decisions are made in relativity not in absolutes. Consider two scenarios; 100% chance to gain $450 or 50% chance to gain $1000 100% chance to lose $500 or 50% chance to lose $1100 Prospect theory suggests that; When faced with a risky choice leading to gains agents are risk averse, preferring the certain outcome with a lower expected utility (concave value function). Agents will choose the certain $450 even though the expected utility of the risky gain is higher When faced with a risky choice leading to losses agents are risk seeking, preferring the outcome that has a lower expected utility but the potential to avoid losses (convex value function). Agents will choose the 50% chance to lose $1100 even though the expected utility is lower, due to the chance that they lose nothing at all These two examples are thus in contradiction with the expected utility theory, which only considers choices with the maximum utility. Also, the concavity for gains and convexity for losses implies diminishing marginal utility with increasing gains/losses. In other words, someone who has more money has a lower desire for a fixed amount of gain (and lower aversion to a fixed amount of loss) than someone who has less money. source: wikipedia Well, with these concepts , we conclude that Losses loom larger than gains! the Psychological value of a loss equal or even less than previous profit, can really affect our mindset , and feeling for trade, actually trading bots are better than us in this aspect, or better to say ;humans should have a proper trading system , also should cultivate our discipline and diligence to be a good trader(psychologically ) ! this article is For informational purposes only!
Education
by PRO_SMART_Trader
9
Secret of trading mentality Hello traders 👋 Trading Mentality First of all, ask yourself this question. ❓ How did trading impact your life ❓ It is important to remember trading could help you reach financial freedom or could easily destroy your life. Everyone knows 90% of the time people lose their money while trading. But it doesn't stop them from trading. Once you start trading it's hard to give that up. Therefore, for anyone who is sure about starting their trading journey. Please pay attention to the following friendly advices. What to keep in mind when you trade ❓ Technical analysis and indicators are tool to help you do presumptions about trade, not a gaurantee that you will have successfull trades. For example, it is possible that you will have 9 out of 10 successfull trades and lose everything on the 10th trade. So what I'm trying to say is, instead of trying too hard to do presumptions. It is also important to prepare your trading mentality. What is trading mentality ❓ Anyone who trades studied more than enough about stop lose, risk management and technical analysis. Even though traders studied and uses all of the above, they still lose they money. Traders shouldn't be paying more than necessary attention to these. When traders start making profit, they start to release dopamine chemical in their brain. This chemical makes you feel good about your confidience, mentality and makes you forget about your fear of losing. For instance, when you fund your account with $500 and you want to make that incease to $10,000. You will start to think irrationally, make wrong decisions and lose. When you start losing, it negatively impact you financially. You can lose one month worth of salary clicking one button. More you lose more you become stressed and desperate to trade not to feel defeated. When start trading, your brian starts release dopamine again. You body feel more relaxed and feel less negative thoughts.You brain fill with happy thoughts. You will oversee your studies which you spent so much time on and lose money again. If it keeps go on, your life will go down rather than up. How to prepare for all this? Of course controlling your mentality. Next lesson will be on how to control your mentality. Trader, Doctor B.Yertunts
Education
by YertuntsTrader
2
Finding your optimal performance 🏃‍♂️Most traders spend a good bit of time looking at charts. Well here is a chart we traders should all take a look at. The chart shown is the Yerkes-Dodson Law. The Yerkes-Dodson law is a proposition that people perform best at intermediate levels of arousal, and that performance is lower at high or low levels of arousal. The theory behind this is visually represented by the graphic in this idea. No arousal levels or a bored/laidback approach to life will mean no stress but no real performance in what you are trying to achieve or do. However when arousal and stress gets too high by pushing to hard, performance starts to decrease. It's about finding the right balance to achieve an optimal performance. A certain level of stress about what you are trying to achieve motivates you to study, learn or train in order to do your best. A sportsperson has to get bumped up before an event as well as train hard, But getting to worked up and training to hard could cause a decrease in performance when it comes to the event. Pushing not hard enough to pass an exam will lead to a fail as you haven't studied or don't care, But also pushing to hard could lead to a fail as you've let stress and anxiety take over forgetting everything you studied. Moderate levels of arousal is best for overall performance. This theory can be applied to your trading. Take a non interested approach or bored approach and you performance in this area will be affected. Less potential profits etc. Get to focused on your trading or trade to hard could lead to poor performance along with a load of stress in your life. You as an individual will have to self reflect and determine where you fit on the curve in the idea graphic. If you fell more success, achievement and happiness can be had, by all means crack on and go for it! However, if you are getting to a point where you feel you might have reached your limit, it could well be time to dial it back a bit. Don’t push to hard for it that you go down the opposite side of the curve. This theory can be applied to every aspect in your life by using it to balance all aspects of your life will also help your trading as well as work, relationships and everything else we all go through day to day. Thanks for taking time to read this. Darren 🙌
Education
by pow_removetheguesswork
'Trading Psychology: 'The 3 Levels of your Game'Hello Traders, As we know trading is one of the most challenging professions in the world and not only do you have to do your research and own due diligence on a technical aspect, you must ensure your mind/emotions are on point as it is the most common reason traders lose money in this industry. I wanted to share a bit of information from a mental and emotional standpoint about breaking down the 3 levels of your Psychology Game. . No matter how skilled one trader is, everyone has an area that could improve and everyone will make mistakes. The 3 main mistakes we as traders make are: To summarize this chart, the differences between 'B' and 'C' game is that in the 'B' game you have the impulse or thought to make a 'C' game mistake, like closing a trade too early or forcing a trade. Instead you retain the presence of mind and emotional control to avoid it. In your 'C' Game, your emotions are too strong and you cannot stop yourself from forcing trades or cutting profits short. While in the 'A' game, the impulse or thought doesn't happen, or its too small you barely notice. Your goal to as a trader is to eliminate and correct your performance errors that cause your 'C' game. You cannot by escape how much of the gravitational force 'C' game has by focusing on improving just your trading skills and knowledge. You will continue to make the same errors (possibly different ones, but errors are errors) which will create a level of excess negative emotion in your mind. Creating and plan of emotions to examine & review on a daily basis will help you correct your failures and fill you with a different type of emotions, happy ones. By writing down your thoughts of what is going on before, after and during, you start breaking down the backend of your trading and your decision-making becomes much easier and more confident. Creating a plan of your emotions could come with a variety of things, some of the most common ones to watch out for are: -Trigger (eg. Swing trading forex) -Thoughts (eg. I can't believe I got stopped out, it has to go up!) -Emotions (eg. I want revenge on any trade that I lost which I know I should have won!) -Behaviors (eg. Overly focused on one position) -Actions (eg. Constantly looking at P/L) -Changes to your decision-making (eg. I need to get my money back, I need to trade more) -Changes to your perception of the market opportunities or running positions (eg. Your going off prediction rather then reaction) -Trading Mistakes (eg. I'm taking the same trade over and over, until its clear I'm getting no where) Journaling down these emotions and also reviewing them on a day to day, trade to trade, basis, will help your trading game improve and make you become much more successful. I hope this has given a brief insight on how trading psychology plays a huge role in our careers, please leave a comment and share what level of game you are! If you felt this has shared some good information, please hit the like button and follow me for more of these! Thanks Trade Safe!
COINBASE:BTCUSDEducation
by ktlfx
1
Think like a PRO and trade at ANY markets🔥Hi friends! Do you want to know what zones I marked on the chart? Put 🚀 and read to the end. In this educational idea I will explain a few traders secrets that will help you stay profitable in any market for the long term. Take Bitcoin as an example and you'll be surprised how often the same mistake is repeated by beginners and understand how professional traders take advantage of it. 📊 But first, let's find out why the psychology of the crowd drives the market Fortunately for professional traders, human psychology has not changed in centuries. Bubbles in financial markets now appear just as they did before the Great Depression🔻in the early 20th century, when stocks rose by hundreds of percent in a month, and just as they did during the Tulip Fever🌷in the 17th century, when the price of tulips really soared to the moon due to the huge demand for the flower. 🚩 This shows the similarity in the thoughts of people in the 17th, 20th, 21st centuries. It is these faults in human psychology that allow the patterns in trading to work and professional traders to be profitable over the long term. Just don't tell anyone about it!) 📊 Why do people tend to panic during a fall and get greedy during a rise? The fact is that our brain tends to paint wishful thinking in our imagination. When a cryptocurrency is rising, the imagination thinks that the price will rise forever, and you get excited just thinking about the possible earning. And the happiness hormones just keep surging. The opposite is the situation with the fall. When markets fall, our brain tries to protect us from more losses and forces us to sell cryptocurrency. 📊 What help the big players to control the psychology of the crowd? Of course, it's the media. Remember when news of the US recession was at its peak and it seemed like a crisis was imminent. Just at the bottom of the market, when Bitcoin fell to $17k and the SnP500 to $361. I may surprise you, but in 2018, 2020 people had identical thoughts and all thought Bitcoin would fall to $1000. The crypto market can fall lower to 10-12k of course, but just interesting to know did any of my subscribers buy cryptocurrency back then or at 17-19k❓Write in the comments./b] 📊 What are the areas on the chart? I marked 2 areas: 🔥The 1st area (white) is the areawhere the majority of traders, especially newbies, want to buy cryptocurrency. I call this " Bitcoin will rise to 1 million" zone. 🔥The 2nd area (green) is the area where most traders sell the cryptocurrency they bought at a higher price. Most importantly, it is where most traders believe that the fall will continue even lower and do not buy, expecting a fall. I call this "Bitcoin will fall to zero" zone. ✅How can you use the psychology of the crowd to your advantage? I can tell you from my own example that a clear strategy and working with indicators helps me. For example DOM and Footprint, where I can see huge whale orders and open a trade in the same direction as a big player. A large order is a clear signal✅, not a psychological speculation because of the news. A few days ago I showed in one of my ideas how Bitcoin rebounded from a large whale order. Bitcoin then grow by 4-5% in just a few hours. I also use trading systems such as Greenwich or Pump Tracker to identify Bitcoin and altcoins bottoms and ATH. You can see ideas about them on TradingView and their live results✅ It may surprise you! 🏁Summary. This knowledges are usefull for any market: crypto, stocks, ForEx, bonds etc. Human psychology and thinking are the same, but each market has its own specifics. Perhaps I will talk about this in the next educational ideas. Friends, was the idea useful to you? Have you noticed such psychological zones? Do you agree with this idea or do you think Bitcoin will fall below $17k? Write in the comments. 💻Friends, press the "like"👍 button, write comments and share with your friends - it will be the best THANK YOU. P.S. Personally, I open an entry if the price shows it according to my strategy. Always do your analysis before making a trade.
Education
by Yuriy_Bishko
15