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The unknown obvious: equity controlIt's easy to get a mili a year if you trade 100M account, that'll be 1% a year. A lil bit harder but still easy af to get a mili of you have 10M capital, that'll be 10% a year. That's how many of "skilled" and famous market participants earn dem money. You might say, "Wait, but that's really not a lot, markets can give much more for these capitals". Yes but given what they have it's all they can do. They been running very shitty bots for decades, they don't really understand how the market works & how to operate. It's especially widespread in cryptos, a lot of people got rich by accident and now they tryna run a business xD Anyways, there's a tool that helps dem all to get that 10%/y for investors money, a very obvious thing that is called equity control. Look at the chart here, is this an equity chart of some1 who've bought TSLA stock during IPO or is it price chart of TSLA stock? If you think deeper, you don't really care about the price of an asset, you care about your equity. If you buy an asset and then look at your account equity after a while, these two charts will be the same. Every strategy can be viewed as a response modifier, it takes an asset chart, for example, IBM stock, and transform it into a different equity chart, with the ultimate goal of having constant always rising equity chart. Market is fractal, the same principles propagate through all the resolutions, they also propagate to your equity chart. How can you affect an asset chart? You can buy or sell, 2 actions. How can you affect equity chart? You can reduce size (down to zero) or increase size, 2 actions. So what these "skilled" and famous participants do, they stop sending they orders to the real market when a shitty bot/trader/manager starts to loose money, but continue trading on a simulator. When this entity starts to earn money again, it gets "connected" to the real market again. How do they define earning/loosing money? They apply the same strategy/quantitative method they use on asset charts. It could be an SMA, I won't be surprised. Thing is, you can use the same concept in the right way, you can apply a good method on your equity chart to boost the performance in certain times.
NASDAQ:TSLAEducation
by gorx1
2
The myth of risk management - Hack it :) I speak to a lot of traders, new and veteran. It's surprising to see how so many are not sure how risk is calculated and what the exposure really means in terms of P&L. This obviously is a major block in the road on the way to gaining confidence necessary to avoid losses. So let's break it down - *P&L is calculated by lot size * movement. Example: If you have 100 ounces of Gold (1 lot) - That's $100 in P&L (Profit/loss) for each $1 Gold moves in value, so if the price 1890 and you are buying 1 lot , price moves by $5 higher - That's a $500 profit ($100*$) , same thing in reverse, if it would drop by $5 that's a negative of -$500 in open P&L. Leverage decides what you are technically able to open in terms of margin used. So if your leverage on Gold is 1:100 - The value of a 1 lot trade is the price of Gold multiplied by the amount of ounces , so let's say 1890*100 = $189,000 value trade, but your leverage is 1:100, so you would only need $1,890 of used margin (189,000:100) to open the trade. But if you have 1:20 as leverage, you would need 5 times more used margin to open the trade. So a common misconception is that your risk is your leverage. That's not true. Your risk is your lot size. But if you have very high leverage , than you can open very high lot size with a small account - Which is extremely dangerous and not advised. So what does an experienced , smart trader do? No matter what his leverage is, he understands the short-term and the long-term range of movement, and opens a lot size that fits the size of his account considering the range of movement. If the account size is $100,000 , and you are buying 1 lot of Gold: The weekly range is 1840-2,000 , the short-term range is 1880-1910 - Price is 1890 So the exposure is ~$1,000 in the short-term (1%) back to the short-term support 1880 , compared to $2,000 on the short-term resistance (2%) of 1910. The long-term exposure is to 1840, meaning a $5,000 exposure 5% ($100*$50) from 1890 - but 2,000 is the top of the weekly range, meaning - $110 up ($110*100) = $11,000 (11%). So didn't really matter what the leverage is 1:20 or 1:100, what matters here is the range and the lot size. Thank you for reading! ----------------------------------------------------------------------------------------------------------------------------------- If you liked my educational idea please like and follow! It would mean the world to me! I promise to answer all comments/questions - I encourage you to communicate :) Thank you so much for reading - Looking forward to reaching as many of you guys as I can :D -----------------------------------------------------------------------------------------------------------------------------------
BITSTAMP:BTCUSDEducation
by Exactus
How to continue in trading during uncertainty timeHello traders: Recently I received many messages from traders about taking many losses during this uncertain time. What's going on globally right now may have a different impact on all the different markets. Many have told me of your frustration, stress, and negative emotion on losing money and continue to feel defeated. Today I will explain a few things that you can implement into your current trading plan, approach and perspective during this period of time. First, you must acknowledge risk management. Too many traders ignore this key important aspect of trading. Especially during this time where the market can be volatile and irregular. It's in your best interest to understand how to manage your risk. You should have a plan that lists out how your approach would be. For example for my risk management right now: -1% per trade of account capital. -No more than 1 trade on the same currency, unless the first trade is secure in profit. -No more than 2 trades open during a day, max drawdown 2% per day -10-15 trades per month -3 trades maximum per week -Minimum 3:1 RR allow before entry -Will Take profit on average when in profit 3:1 RR. Second, learn to control your mindset and emotions. More often when traders approach me these days, they are telling me they are taking too many trades, chasing profits and revenge trading their losses. All these arise from the mistakes of FOMO, get rich quick mindset, enter multiple trades. IF a trader can truly understand the fact that the market will always be there tomorrow, next week, next month..etc, then it's an easier thing to deal with on a psychological level. You will no longer stress about trying to enter too many trades, worry that the market may not be available tomorrow. Third, less social media exposure. In today’s world, unfortunately in trading, most of the things you see on social media are fabricated and fake. Their sole purpose is to sell you a dream, lifestyle, and easy money concept. ITs always during this uncertain time, you will see more and more of these “gurus” who will show you how much $ they made during this time. Now, I am not saying all are fake or scam, I am sure small # of them are doing well. But, most of the things you will see in your social media feed, are likely to be photoshopped, faked, fabricated to make you believe whatever you are doing is wrong, and you tend to “compare” your result with these people. This ended up becoming very negative and stressful to continue. ITs important to understand trading is one of the toughest professions out there. IT requires so much emotion control, clear mindset, and proper psychology on a regular basis. If you are struggling, it's usually not to do with your trading strategy, but rather your approach, perspective, and perception. So, eliminate as many unrealistic things you might see, and focus on yourself and your journey. Any questions, comments or feedback welcome to let me know. Thank you
Education
by jojofang0901
38
Emotional Control in InvestmentWarren Buffett famously said, “Be greedy when the market is fearful, be fearful when the market is greedy.” Knowing fear and greed in investing is therefore a good thing. Our ancestors in the past, thanks to fear, knew how to run away from predators so as not to be killed. And also because of greedier than other animals, people know how to cultivate, store food, and then build a prosperous society like today. However, it is no coincidence that the EQ index argues that the more able a person is to control his emotions, the more likely he is to succeed in life. The same is true in stock investing. Even the skill of mastering emotions is also put on the top by experts, which is a decisive factor in winning - losing, gaining - losing. So what should we do to control emotions in investing, so that the actions of "fear" and "greed" appear at the right time and in the right place? How do emotions affect investment decisions? Let's analyze the characteristics of an investor's work. Every day, when the stock market opens, we begin to sit in front of a price list, with the numbers flashing green and red and changing every second, every minute. Looking at the boring price list, we turn our eyes to other investors, groups - group chats on social networks, to see what people are buying, selling, what is the target price, holding this code or that code for a while. How long,... Then when the price list was off, even the night had fallen, we were still thinking, lost in the discussion and analysis. And emotional trading also emerges from here. For example, if we are happy, we are blind to the risks. If we are afraid, we miss good opportunities. If we're angry, we're willing to take great risks to try to undo the consequences (revenge trading). Living in that variable environment, if we do not have enough bravery and knowledge, it is easy to buy and sell irrationally and lack discipline. And so the account also "exploded" itself. If we do not have enough bravery and knowledge, it is easy to trade irrationally and lack discipline. How to control emotions in investing? Shaping an investment method for yourself When investing in stocks, in many cases, you have to make decisions continuously, and you have to decide quickly. But to make quick and accurate decisions, it is necessary to analyze and process information, set investment goals, plan allocations, etc. There is a lot of work to do, to make a decision. good. To make things simpler, you need to have an investment system, or investment method. This helps you to perform actions according to a pre-programmed logic sequence. It will be the directional compass, so that every time you need to make a decision, you just need to check the conditions of the system and follow it. For example, you can stick to a periodic investment plan (SIP - Systematic investment plan). By continuously investing small amounts, you take advantage of long-term cost averaging (DCA). Thanks to the habit of investing periodically over a long period of time in familiar assets, you will be more prudent in risky speculative decisions. Have yourself an investment system that helps you perform actions according to a pre-programmed logic sequence Building investment knowledge After reading the above idea, many of you will probably think: "I don't know anything about investing, how can I build my own investment method?" That leads to the second element that you need to focus on developing, which is building investment knowledge. Referring to investment knowledge, you will probably think of PE, EPS, valuation methods, ... (if according to fundamental analysis), or MA, RSI, technical indicators, wave counting ,... (if according to technical analysis). This is not wrong, but if you don't look at the investment method, the above knowledge can become a fragment of knowledge. Such knowledge must be systematized from the perspective of a specific investment method and way of thinking. You can find these knowledge in the section To make things easier, you can look to investment advisors, brokers, even fund managers who you know for sure have their own investment systems. However, when receiving investment advice, no matter what method it is, be sure to learn from an expert the important components of an investment method: Clear, objective (non-emotional) logic to make buying/selling decisions. Investment history follows the above logic, applied in Vietnam market. Principles of portfolio allocation, appropriate investment size. Risk management principles should clearly state what we will do when a risk occurs. In addition, investment knowledge is not only professional knowledge but also general understanding. For example, you should know in advance that no method is all-encompassing; a potentially high-return opportunity also carries a high degree of risk; It's not like businesses and the whole economy can grow by tens of percent per year, but you just invested in stocks and want to earn 5 times 10 times,... Don't stand on this mountain looking at that mountain 16 years of experience in the stock market gives me the opportunity to meet a lot of people. Many of my clients confided to me: “I just need to make a steady profit of a few dozen percent per year.” However, they weren't happy when they only held a 35% increase, while a certain X doubled. But there are also lucky people, who bought the correct X code and doubled it, but still regretted: "If I know that, I will buy more". In this case, instead of comparing the actual profit with the original target, they compare it with someone else's profit, or the profit it could have been. No matter how much they say, they will have a reason to regret anyway. The solution to not falling into this situation is to return to your own investment goals and methods. If this still isn't strong enough, try linking that goal to the important things in your life. In software development, there is a concept called user story, written in the format: “Is…, I want… to……”. I love this style of writing because it focuses on the subject and the goal. Applying investment, for example, we can write the following: “As a father, I want to invest to have money for my daughter to study abroad at the age of 18.” I believe if you always remember this , you will be less emotional, less reckless and stick to your investment plan more, because you know this determines your daughter's future.As a father, you cannot bring your child's future to life. can bet. As another example, we could write: “As the breadwinner of the family, I want to invest to have a sustainable passive income source, so that my family doesn't have to worry about finances when I get old.” If you develop If you can express this, you must have remembered your responsibilities, your goal of financial peace of mind.Emotional decisions make you insecure, so there is no chance to dominate. Enjoy the emotions of investing in a controlled manner. Conclude Having emotions is a natural mechanism of all living things, including humans. Therefore, if emotions become too dominant, we should not reject them to the extreme, but should only moderate and control them to an appropriate intensity to facilitate work. Experiencing the emotions of investing is like climbing to the top of Fansipan. Climbing to the top may not be fun, if we don't experience the cold, the slippery pain when climbing the slope, the times we have to struggle with the mud, we have to swing into each bamboo grove to go. Investment is similar. Accept and enjoy emotions, but don't let them hinder us from reaching our destination, let them overwhelm our goals, and erase our motivation.
HOSE:APHEducation
by fxtactix
Betting mindset in investmentInvesting is an activity that always comes with risks. Every time we have to think about a fixed investment, sooner or later we have to ask ourselves what are the risks associated with this investment? Investing is an environment where the certainty of the future is purely a product of the imagination, but unfortunately this is the product that is being sold most to the inexperienced class of investors who are just starting out. learn about the market. It is not difficult for us to come across many stock investment courses online that promise to give investors the formula to beat the market, technical tools that always guarantee profitability, or simply the best words. the bullshit of the brokers' heads. In investing, as in life, there is nothing an investor can do that can give a sense of certainty that the end result will be what you want, uncertainty in the future will always be a constant. Numbers never change, especially in the investment environment, and investors have no choice but to learn to accept this fact. Therefore, once imbued with this principle, smart investors will also know that the most reliable fraud warning signal in investment is the opposite of the above truth - the promise to guarantee profits. profits in the future. In multi-level language, it is a commitment of X% profit in a fixed period of time Y. Every time you hear the four words "profit commitment" from someone who is talking nonsense about an investment project, you better hold your wallet tightly Because the future is always associated with uncertainty, learning how to deal with uncertainty in investing is learning how to think probabilistically in the most objective way. In other words, the most famous investors in the world are basically people who think like professional Poker players! How to properly receive new information? Thomas Bayes was an English pastor who lived in the early 18th century. For those who have specialized in statistical probability or machine learning, Bayes is not an unfamiliar name - he is the father to of today's famous Bayes theorem. In Nate Silver's famous book Signal and noises, the author gives a perfect example of how to think in the Bayesian style: Let's assume that there is a man who has just been given life in a world of which he has no knowledge at all. Seeing the sun rise for the first time in his life, he screamed in panic and sought refuge from its sunlight. He didn't know if this "sunrise" phenomenon was normal or just a madness in the world. However, day by day when he saw the sunrise, he became more and more certain that this was a constant phenomenon, not a coincidence. The first day when he saw the sunrise, he was not sure if the sun would be seen again tomorrow. However, this probability number will gradually increase (but will never reach 100%) with the number of days in the future he continues to see the sun rise. Bayes' theorem is very simple: when we make a prediction about the probability of something happening in the future, it is a never-ending process where the number of probabilities is continuously updated with each Every time a new piece of data comes in, we have to change our prediction. We never start this number with 0% or 100% because Bayesian thinking doesn't allow you to say something will or will never happen. Bayesian thinking is a constantly evolving system, with each new data update bringing our probabilistic predictions closer and closer to the Truth. Bayes' theorem is an assertion that all we know about the future is a guess based on probability, and this number will never be fixed but will always change over time as new information becomes available. appears to force us to update our conjecture. In the ironic way we often hear, one thing for sure about the future is that nothing is certain. Bayesian thinking forces us to admit that our understanding of the world is very shallow, and that we are constantly updating information in the hope that our numbers come closer and closer to Accuracy (but it will never 100%). To do this, we must first admit to ourselves that we are not really sure about anything in the future. To get closer and closer to the Truth, open-minded thinking is essential, and confirmation bias is a dangerous enemy that needs to be eliminated. Consciously or unconsciously, professional poker players and investors alike employ the best of Bayesian thinking in their work. They always think about possible future events as probabilistic numbers, constantly update this number with new data in real time, and are ready to bet big when the probability is extremely beneficial to itself. Like playing Poker, smart investors are always ready to bet big when the odds of winning are very high, although this number has never reached 100%. Similarities Between Investing and Poker Legendary Poker player Doyle Brunson, who is known as the Godfather of Poker, once said a sentence that changed the entire opinion of the writer in the early days of participating in this game: Poker is not just a game of winning or losing. Basically, Poker is the art of making the most accurate decisions in any uncertain situation. You have to know when to bet more, when to discard, and when to All-in. Like all novice players when learning about Poker, the writer only thinks about Poker purely through the lens of winning money or losing money without looking into other aspects of the game. Most new poker players think that Poker is just gambling and that the ultimate aim of this game is to try to win as much money as possible. In fact, the above goal is not necessarily wrong, but if you focus on pure winning and losing, the player's skills can never develop to new heights. Poker is a sport where skill and luck both play a role in determining the final outcome of the player, and the player's skill is always proportional to the efficiency of the final decision-making process. in the entire game. Most realistically, the highest level of poker players are always the ones who are able to make the most accurate decisions in extremely uncertain situations. What is the best decision in uncertain situations? The simple answer is that decisions are based purely on probabilities of what might happen in the future. In Poker, a hand can play out in many different ways with different proportions of probability, and so a player's skill is shown when they are most likely to sniff correctly. whether the probability is in your favor or not. To put it simply, every time a player places chips on the table, the true essence of that bet is a decision about a possible future scenario in the hand. The higher a player's confidence in the prospect of the future in their favor, the higher the stakes will be. In other words, the number of bets represents the player's level of confidence in the possible outcome of the hand (the writer does not include the case of bluffing, that is a completely different category of Poker). ). The more confident players are in their ability to win in the future, the more willing they are to bet big. And so the player who is able to estimate his probability of winning most accurately, the more optimal the final decision-making process. However, professional Poker players are also wise enough to understand that 80% win rate also means 20% lose rate, on average they will have 4 wins for every 5 hands of the same hand. and lost 1 time. And if the other 20% happens to lead to the loss of their bets, they don't really care about it, they basically understand that they made the correct decision but luck smiled. smile at your opponent. Professional Poker players fully accept the uncertainty of the game, they understand that even if they can make all the correct decisions in a hand, there is still a chance that they could lose money due to the uncertainty of the game. influence of the element of luck, but they also know that in the long run the people who are most likely to make the most correct decisions based on probability will always be the final winners in the game called Poker. The investment process is similar to the decision-making process in Poker. Uncertainty is always part of the game, a smart investment has the potential to lose money, and a stupid investment decision has the potential to pay off, at least in the short term. But smart investors are never short-term players, what they really aim for is the long-term end result. It is only when the market goes through a period of excitement and begins to enter a period of depression that we really know who is the real fox in the market. Small bets, big bets, and discards If you have a 90% win in a hand of Poker, the most obvious thing is that you want as much stake on the table as possible. But if you are the opponent, who only has 10% of winnings and understands the rules of Poker like you, why should they accept to place more money with only 10% winning rate? Or let the writer take another example that is easier to understand, if you are an English football fan, you know that Liverpool are one of the strongest teams this season, and their opponent tomorrow is Norwich City , one of the weakest team. Everyone knows that Liverpool have a high win rate and everyone wants to bet on the possibility that Liverpool will win tomorrow, but if so, who will be on the other end of the bet, who will be the fool? bet on the possibility that Norwich City will win? The obvious answer is that it completely depends on the level of the odds, if the bet on Liverpool bets 3 to 2 while the bet on Norwich City places 1 to 100 then the player doesn't really have a choice at this point. Choose obvious attraction. Liverpool has a higher chance of winning, but placing 3 only eats 2, while Norwich City of course has a very high loss rate, but placing 1 will eat up to 100, at this time, the player really understands that there is no meal. which is free on the betting market. Football betting, the odds are very clear in each ball game but this information is completely hidden in Poker and investing. Poker players and investors must estimate this ratio for themselves and make the final reasonable decision. In Poker, if you only have a 10% win, the only reason you would be willing to put more money into the hand is when the amount you win when that 10% happens has to be greater than the odds of placing 1 to 10. This means that if you had to put an extra $100 on the hand with a 10% win rate, you would only do this when the winnings were greater than $1000. On an average of 10 similar hands, you will win 1 and lose 9 times, so you want to make sure that the 10% chance of winning is greater than the total loss in the remaining 9 games. This is a basic concept in Poker, but to put it into practice in investment, there are specific difficulties as follows: 1. You cannot know the exact win rate in each investment. 2. You also don't know exactly how much profit you can make if the deal goes through. In Poker there are some basic math tricks for Poker players to calculate roughly what their probability of winning is in each hand, but this is a luxury in the investment world. It is difficult for investors to give a specific number for the probability of success as well as the rate of return for each potential investment, the most likely thing they can do is give a range. estimates, and the more experienced the investor, the more likely he is to give an estimate that is closest to reality. And like professional poker players, experienced investors are always ready to bet big when the probability of winning as well as the potential profit rate is extremely favorable for them. Basically, the action to invest money in the market is similar to the action of placing chips on the Poker table, which is an expression of confidence in the player's ability to win in the future. The greater the confidence, the bigger the stake, and vice versa. As the Godfather of Poker Doyle Brunson once said, "Basically, Poker is the art of making the best decisions in any uncertain situation. You have to know when to put more money, when to discard, and when to discard. Which should be All-in". In Poker, the hand you are playing is similar to the investment you are considering to lose money in the market, the question that the wise player must always answer is: Is this an attractive deal with the odds of winning as well as the odds being extremely favorable for you? 1. If the answer is an absolute affirmation, you bet big. 2. If the answer is probably maybe, you bet small. 3. If the answer is no, you simply discard. In life nothing is certain, but this also does not mean that everything is 50/50 as many people mistakenly believe, in reality there will always be things with a higher probability of happening. with other things, but always remember that a low probability does not mean it will never happen, things no matter how small the probability, as long as the sample set is large enough, nothing is a problem. cannot happen. For successful investing, the betting mindset is one of the most important skills in investing simply because the Bayesian model is one of the best tools an investor can use to deal with volatility. future determination. Learn to accept the uncertainty of the future as well as the irrefutable probabilistic nature of the investment game, and investors will begin to have a more rational mental model when thinking about prospects. of potential future investments.
HOSE:APHEducation
by fxtactix
The Psychology Of Trading, Fine Line Between Success And FailureMost traders experience similar thoughts patterns and emotions on the charts. your psychology and your mind-set represent 70% of your trading performance. So smart thinking and discipline is more important than your strategy. That's why controlling it is what makes you profitable and successful. Range of emotions that can impact your trading: 1- Doubt: It comes after some losing trades you start doubting your knowledge and everything you know. Fight that feeling as much as you can trust your judgment and trust yourself. 2- Fear: Also comes after some losing trades and risking too much. the best way to fight this emotion is that you should be comfortable with what you are risking and if you feel uncomfortable LOWER YOUR LOT SIZE. 3- Revenge: An emotion that exist since the stone age. after your stop loss is hit you want to take a revenge from the market and get back your money. Well you should not take it personally at all and you should convince yourself that in the market anything can happen. "Main Tip" WHILE TRADING LEAVE YOUR EMOTIONS AT THE DOOR
Education
by FX_Elite_Club
2
Buying vs Selling Pt2- Who's really in CONTROL?Part 2 here is all about CONTROL . As I said in part 1, people tend to equate green candles with buying and red with selling but the default coloring is wrong and does not reflect the actual actions of smart money. Like color, a common misconception is that if the day is red and way down, people are selling off. The reality is most of the time the market is down because buyers are in control . Think about the stock market the same way you might think about a housing market for a moment. Have you ever heard "it's a seller's market" or "a buyer's market"? What's going on in those markets? Usually in a sellers market, the homeowner lists their house, gets a ton of bids, and chooses the highest bidder. They may even decide they listed too low or change their mind. In a buyers market they may not be so fortunate to get a lot of bids and the bids that come in may be below their asking price. Depending on their motivation, the homeowner in a buyers market might sell for below their asking because they are in a dire situation where they need the money or are spooked that prices are going to continue to fall. In a lot of cases, that's not too far from stock markets. Think about the last month or so with the COVID-19 pandemic and look at this chart- Who's really in control here? You always hear people saying, "Sellers at it again" when we have these -7% trading halts. The reality is closer to this though, who really wants to BUY in a time like this? Sellers have lost control. Through much of the crash you could not sell your shares for yesterday's price because the buyers on the other end of the table said no thanks, I think I can get a better price to buy at later. Here's an example of the December 2018 correction and some insight as to the balance of control- Until you understand it better, thinking of control and phases this way seems counter-intuitive. Why is the price RISING if people are SELLING? Or why would price be FALLING if we're supposedly BUYING? I like to look at it in terms of these phases (on main chart)- Buyers Collect -> Chase -> Sellers Profit -> Panic Most of us are dumb money, retail traders. Oh, and we're HUMAN. We struggle emotionally with harvesting profits because we get greedy and our heart starts pounding when we see heavy volume and giant red candles. Combining color and control on a couple intraday examples-
AMEX:SPYEducation
by chrism665
14
Self-discipline - what's that?Whilst I am on a roll, I'm pushing out loads of questions and thoughts that have occupied me for the last two years. All this is well ' Beyond Technical Analysis '! In too many trading/training videos out there, I've heard the words 'discipline' and 'self-discipline'. These are so commonly used words that many take their meaning for granted, or as something very elementary. I know - because I was one of those people who thought I knew what the words meant. However, there is also a thing called self-deception which works against self-discipline. Self-deception at its heart, is the ability of the mind to justify anything! Quite simply - it's dangerous. The Collins Dictionary defines self-discipline as, " controlling of oneself or one's desires, actions, habits ... .. the act of disciplining or power to discipline one's own feelings, desires... with the intention of improving oneself. " It's easier now to see how this connects to trading environments. A sound trader needs a lot of personal self-control over actions, habits, feelings and desires. I add 'thinking processes'. Certainly there must be a routine that improves one abilities, as the markets are not static. Their behaviour changes so one needs to improve to match those changes. The obvious question for many (especially new traders) is, " How do I become more disciplined? " I'm afraid there is no magic formula that I can prescribe. I can only share a few personal experiences that drove me to become more disciplined. It's like a weird sandwich: A firm and unshakeable desire to make myself consistently profitable. Pain i.e. painful mistakes. Non-acceptance that if others could do it, I couldn't. Pain drives people - let's not debate that. By pain I include from the worse kinds of suffering to the more subtle kinds. One can include things like frustration, anger and disappointment. Pain stood like a distasteful filling between the two sides of my sandwich. I just couldn't ignore it. If I wanted to make this thing right I had to fix the pain; all sources of it. I was/am my own pain. My enemies arise from within me to cause me pain. My mind plays tricks on me in trading environments. To deal with the sources of pain I had to deal with my own mind, else just give up. I'm no quitter! So whilst I do not claim near-perfect discipline now, I have been addressing the trickery of my own mind - those inner enemies - that thwart my thinking processes. After all, if I don't the whole sandwich (three bullet points above) become nothing - and I'd have to join the 90-odd percent of people who give up on trading in the first couple years. Am I saying that pain is a necessary ingredient for everybody to reach a greater self-disciplined state? Well yes I am! In every walk of life people have to suffer some sort of discomfort in achieving their goals. If you wanted to become a top-rated lawyer, you would have to suffer the 'pain' of years of study, and the trauma of being beaten in court rooms. If you want to get to the North Pole on foot, that involves pain and personal sacrifice. But nobody gets to the North Pole alive, with poor discipline. I shan't go on to mention other areas where people suffer extreme discomfort in order to achieve their goals. If there are take away points to consider, traders should to find out what they are about and anchor themselves on what they want and what they won't have. Then, systematically whittle away at all obstacles by robust self-refection. It takes time - and bargain for pain! Do the time - take the pain. Don't blow up a live account.
Education
by Captain_Walker