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Psychology

Trading Tips for consistency 1- Find one repetable pattern on a specific timeframe and track it on excel to know the exact % win rate. 2- patterns are more powerful than technical indicators, imho indicators should be only used for signal entries and nothin more than that. Remember all indicators are lagging indicators so patterns remains more powerful. 3- the ability to master oneself and stay disciplined to wait and wait for your specific setup to CONFIRM. 4- DONT anticipate you must wait for CONFIRMATION only. 5- max loss per trade. Risk management is the king of the game and you must have a pre defined max risk per trade BEFORE you even enter into a trade. 6- use HARD STOPS. As soon as you enter into a trade you must set your hard stop immediately. 7- if new imho u must use max risk of 2% of ur equity on each trade as a max risk, if you are exprienced then you are allowed to use more. 8- Journal your trades, take screenshots of your charts with entries nd exits, as well as joirnal your thoughts before you trade, during and after you exit the trade. Remember this game is 80% psychology so tracking your emotions is KEY to success as a trader. I wish you all success 🙏 The Bear 🐻
Education
by ShortTrades
How to make money: Profit from mass hysteriasA little update on my last post as I have had more confirmation of my claims since then. About people irrational minds. Sounds all textbook all of this "mass hysteria" and people might think real life isn't that stupi but it is. After telling someone his not hearing of the word CoronaVirus did not make it worse than the flu and ebola, I was just mocked for "making a stupid comparison" because "you didn't hear of ebola before it was discovered" and "if WE (not only him) have not heard the word CoronaVirus before 2019 it is obviously because the name was not invented" FUN FACT: EbolaVIRUSSES were discovered in 1976. CoronaVIRUSSES were discovered in the 1960s. And Ebola killed WAY MORE than Corona, the flu is also way worse. Funny how SARS was "the mightiest zombie apocalypse virus" with Severe in its name, in 2002, and now these idiots out there don't even remember it and think "the coronavirus" was just discovered. They will forget about this current one in 3 months at most LOL. These people have no clue. They ignore what virusses are, they ignore that Corona is 60 years old, they ignore how lethal it is, they ignore that it is a common cold, they ignore that it goes away when it gets hotter, they ignore literally everything about it. You got PLEBES hitting the table with their fist and DEMANDING worldwide vaccines for all. The brainwashed populace that cannot think for themselves are scared. They think the world is ending or some sh**. Oh apparently this time according to "experts" "60% of the world could get infected". Yaaaaaawn, yeye sure. Yet another irrelevant tiny fart in the winds of history that a part of the population is reacting too, and medias (and stock market bears) are profitting off with their flashy titles and *breaking news*. What can only be described as either complete noobs, trolls, or idiots, called for a top. The "end of the bull market". The "mighty corona virus bear market". Well US indices are already past ath. You know, this timeframe is typically my time frame. My trades, the winners (losers go much faster), most of them, end up lasting 3 days to 2 weeks, with the occasional lucky huge winner that will last longer of course, up to 2 months. I think it is the best and easiest when one has "better than average foresight". I do not know how to predict the direction a company will go for the next 1 year or more, all I can do is buy cheap and hold. I can try guess generic trends and generic fundamentals, but I cannot predict what will happen in a whole year, 365 days, I have no idea what price a currency of company will be at in 365 days, the whims of the market. I've had my 1rst theory on stocks that was the dow would climb to 32k+ in "the future" (2nd one was 2018 was the top). And low timeframes like under a day is mostly just noise, and fees ruin it, and no one ever made consistent big returns from it, only people to claim they do are "educators". Of course this is just the start, it takes way more than just thinking for yourself and not being a brainwashed sheep, but the basis is this. Go against (or might profit from it) the public mood / emotions / irrational thoughts, and make sure to stick to the public attention span of around 2 weeks. All this "CoronaVirus" FUD was, was an opportunity to buy indices on a pullback. MA50 + Trendline. The T1 would be ath. From here my favorite course of action is to trail my stop and try staying in as long as possible. Trailing is an entire discipline to master it depends on alot of things including asking oneself "if I place my Stop Loss here what is the risk to reward if this was a new trade" and also includes using obviously previous resistances as support, seing how the price is moving, etc. There are other good ones, like "12 years left" "global cooling consensus - er I mean global warming - er I mean global climate change", but the most famous ones are not 2 weeks things, and no idea how long the hysteria lasts, so it's not a free piggy bank robbery like the never ending flow of 2 week long stories on the news. I hope the media format always stays the same and idiots stay idiots. And I am pretty sure it will. People have behaved like gnus (wildebeests) before the existence of tv media, and now that less and less people watch tv and they instead spend time on social networks (twitter youtube seem to be the main ones they get their info from) nothing has changed, still 2 weeks stories and mass delusions everywhere. Thx for the money, kiss kiss. The stock market will probably keep going up (this is not me saying it goes up in a straight line) till the Europe trade war starts. From wikipedia for the format: Rank Country Exports Imports Total Balance - European Union 283,269 434,633 717,902 -151,363 1 China 129,894 505,470 635,364 -375,576 He probably adds Nato in it, and unlike china they are certain to argue about the climate change "not up for debate" dogma. And europe are allies. It's going to be a huge thing. Maybe 3 years of sideways then a parabolic move up, then Trump presidency ends and the big crash. In that time Trump could get assassinated by very angry page tearing lefties, a civil war could break, US biggest allies could start having bad relations with it, the US might have a hostile takeover by communists, europe trade deal could go well rapidly, could go well but after a long time, coumld go bad rapidly, could go bad slowly. I just see it as impossible to call what will happen the next 4 to 5 years, I just know what direction it is supposed to go AND I know what to watch for what to expect. Long live profitting of short term delusions. They can laugh at us, they can insult us, they can argue with us, they can keep trying to have the last word, they can always be right in hindsight, they will always outnumber us, but we will always take their money.
TVC:SPXEducation
by MrRenev
9
Psychology in trading. Manipulation of consciousness Bitcoin 666Bitcoin's main trend is upward. Which formed the ascending channel . Always trade with the trend. Decide in which trend you are trading and on which timeframe. Decide on strategy and risk management. Your first enemy is a lack of experience and knowledge. Your second enemy is greed and a sense of lost profits. You always have time to make money, the market will not run away from you, but money in the absence of experience and knowledge will run away. On a bull trend it is better to always work on the bull side; on a bearish trend , on a bearish side. Always follow the trend! Going against the trend is the same thing that falls under the locomotive and hoping that it will not overeat you, but will bounce off of you! There should be a strategy and plan. At the same time, your strategy and plan should be plastic from market situations. You need to not only know the rules of technical analysis , but also understand what and how and why it works. Knowledge of technical analysis and the psychology of the crowd will make you in trading - God. If you are like everyone else, then the result will be like everyone else. Those people who rely on quick profits without effort and time are doomed to give their modest deposit more smart and hardworking. For the minority to earn money, the majority need to lose money in the market. The more the majority plays according to the rules imposed by the minority, the more money is lost. Consequently, a minority earns. To earn, you need someone to lose! When a minority needs it, the rules of technical analysis stop working. The faith of the majority imposed by the minority destroys the mountains and minor minority deposits. In the game against the crowd, only time decides the question of when the average zeroing of the deposit in the average person will occur. Those traders who are sure that success depends on only one successful purchase, retention of the asset for a short time, and then sales are many times more expensive - are doomed to zero the deposit. This is what the majority think, which means that this is an erroneous opinion. Thanks to this majority faith, the minority earns. Trading is not only work - it is creativity and relaxation! Remember, trading is a game of probabilities . Who trades from the situation created in the market - earns. Who trades on the basis of what he wants - receives a loss. The crowd trades out of their desires, not market probabilities. The crowd always loses. Thanks to the thinking and desires of the crowd, we earn. There are no accidents, there are random patterns that must be understood and used. Coincidences are planned actions disguised as randomness. 369-27-669-27 3075-1170-1666-444-27-01-20 310-130-23-13-06-02-2020-13 371-27-671-27 Money is not the meaning of life, but a tool for life!!! Appreciate the time of your life in this world - this is really a limited resource . Time will pass, life will go. Have you been born in this world for a cut paper of money that you will never have in your desired quantity? Think it over. Also think about patterns. Why is it that everyone who wants to have a lot of money remains very poor. And the opposite is true - who does not pursue the amount of money, but does good deeds, receives fantastic amounts in a short time that the “supplicant” and “wait for money” will never receive for all their wretched existence. How to give such is not safe. The crowd with their desires is crazy and selfish. To give to such is tantamount to destroying them. The world is honest. Who creates - he receives. Most want to receive - but do not give anything in return. This is the secret of poverty. Understand the world, understand yourself - life will become meaningful, understandable and easy.
BNC:BLXEducation
by SpartaBTC
5
Trading mechanism & Trading psychologyHi pros! today we will make the balance sheet of all the lessons we got through the 1000$ to 20K challenge. This is important because I think they already said to you : "trading is 90% psychology and 10% Technical analysis" , indeed it is. Because a trader with the best technical analysis but poor trading psychology and mechanism will got very low performance or will stay a break even trader or even worst ! a loser :( Why do you need psychology and mechanism to trade well? because it's like if you are in a car but you don't have break, or it's like jumping from an helicopter without parachute. You are going to a complete disaster. Market psychology is essential for the good health of your trading account and also your physical/mental health (yes to keep losing and losing put you in a very bad mood and can be potentially) I will resume all and go deeper on psychology and mechanism on this text to get the best potential of this lesson, the chart is only partial. It's good to print them and have them always on your desk while your trade So lets begin ! 1) maximum % loss reached per day = no more trade Taking losses put you angry, emotionally weak and provoke reaction most of the time. you will be in a mind to recover your losses. But learn when to stop is the best thing to do if you want to survive. You'll have to deal with losses literally everyday of your trading career. learn to tame/manage them and you'll be always safe. tips: cover your losses with your winning trade (by taking half) when you can. If you can't wait for the next day to trade. 2) adding to winners and don't touching at losers This is the simplified sentence of "let run your winning trade and cut your losses". this mean don't cut your loss manually because you'll always use SL. This means don't bother you with losses (again), just try to add some trade on your winning trade when you already took half. This is a good potential wealth accident 3) dont look at the price when you take a trade Don't stay blocked in front of your pc, go for other activity and keep an eye on the trade but not every seconds of every minutes of every hours ;) 4) don't chase the price (wait for a real opportunity, a real good plan), including fight the trend (don't force the market) High quality trade gives you High quality potential of win. Focus on the quality of your setup and then market will surely give you your wage. 5) Find the most profitable SL on each market to have a too short SL put you in losses more often, and when you have a too large SL you wait too much to take your win. Find the optimal SL for each market (ex: personally I use around 200 pips SL on each of my forex trade. Sometimes a little less, sometimes a little more but I try to have the optimal SL that gives me the optimal potential of winning rate. 6) no emotions, you win it's good, you lose it's ok The market isn't your psycholog, you'll trade very bad and make a lot of errors if you have emotions while taking loss and wins (try to avoid them, emotions is human but get outside of the market when you feel your emotion taking control of you trading). Don't rationalise every losses. (try to find the errors to upgrade your trading style but understand that sometimes market is simply irrational) 7) don't take a trade on the same market immediatly after taking some loss. refers to rule 2 and 4. wait some hours or some days. Focus on finding other opportunities,you'll always find opportunity on the market. don't torture yourself if you don't took a trade at time or if you lose it and can't retry 8) avoid following other ideas ideally make yours to become a better trader. 9) trade like a robot (no bad / sad moon, no angry, no revenge trade) refers to rule 6. Even a small thing (like a dispute with a friend) can make you sink into the wall. Be totally calm and without aftertoughts 10)stay humble or the market will humble you be satisfied with what you got by the market. if you did your average weekly performance be satisfied, if you make more be satisfied, if you make less be satisfied. 11)Make the choice to don't trade is also trading when you feel bad about a trade (not sure) and you don't take it you preserve your capital. so you avoid loss. but don't be extreme and avoid every trade. it's exceptional 12) follow the trend trend continuation trader have best result then countertrend traders. refers to rule 4, don't try to find every tops and bottom, If you found a reversal it's ok but don't focus on them. principally use trend continuation method. If you have something to add on this chart tell me and i'll be glad to add it. comment if you have some question, i'll be happy to answer with my little experience
Education
by jeanneymar011001
The Secrets to Forex & Miller's Planet (pt.3)You must read the preceding parts first. This one is a real doozy. Watch your reading comprehension levels go up in realtime. ------------------------------ "Very, very few people could appreciate the bubble. That's the nature of bubbles – they're mass delusions." - Buffett Last time we talked about how people who speculate are inherently delusional and are all in the process of losing; usually just money. The only way to 'win at losing' is to survive the delusion game by understanding the players and their psychology; not by guessing if price will be higher or lower in 10 years. When you survive, you are rewarded; all the money from big losers goes to the remaining players at the table. That's the derivatives, near zero-sum market in a nutshell. Sometimes players take their winnings and walk away, sometimes new players join the table. But in the end, 'the bucks are all that matter, everything else is just conversation.' The charts, the econ news, the geopolitical shocks... they only matter insofar as they influence the psychology of the players at the table. This is why you have to align your trading philosophy with player psychology first, and at the same time, reduce your risk presence when you take 'bets' in the market. Think of 'reducing risk presence' as surviving or holding on and think of 'surviving' as taking a piece of the pie from the losers when they hit zero. Remember, markets existed long before Adam Smith 'invented' capitalism. The original merchants and traders achieved longterm profitability by two methods: collusion, or by navigating wars, famine, oppression... Things haven't changed as much as you might think. Chapter 1: The Margin of Psychology Now, after the 2 parts, you've probably had enough of this distilled pseudo-academic fluff and you're ready for the valuable details. Too bad chief, here's another fluffy paragraph. Again, get used to losing. In the last part, I ended it by questioning if disorder can be consistent enough to be orderly. Now, we don't have to assume an orderly interpretation of disorder. It's proven by the presence of profitable traders/investors. The household names like Buffett and Soros. They operated, to a degree, on something investors call a 'margin of safety.' Which is: 'the intrinsic value versus the current or last price offer.' This is similar to what I've been presenting all along, only I disregard this Plato-like intrinsic value notion; please refer to my part 2 sectioned 'Emergence of Estimation' and read through 'Fact, Fiction, & Forecast' if you want the full take on this. Using fair value, or the center of price gravity, or more simply: 'resilient value;' especially when we are talking about derivatives and forex, serves as a better frame of mind. Because.. value only exists in the mind in a near zero-sum game. But thanks to psychology, there is some element of order present in the otherwise disorderly markets. You can worry about the ethical issues of big zero-sum money games later, after you can afford to read Das Kapital on your yacht. Chapter 2: Counting Cost I have spent a long time trying to find reliable patterns or orderly events in derivative markets. I have used or tested over 3000 indicators, experts, or scripts. So many that my MT4 terminal stopped showing them and I had to start an indicator genocide worthy of a binding UN resolution. Countless all-nighters across both small and large forums evaluating both the popular and wildly unconventional strategies and theories of forex. Books, videos, etc. 4, 5, 6 years and on. The stranger and more contrarian the idea, the more interested I became. More interesting to me than the idea itself was the line of thinking that created the idea in the first place. Why did retail traders think this way? Why did commercial traders think this other way? I was able to both regard and disregard the most qualified, and do the same for the least qualified. It's not a surprising lesson, but you have to go out of your comfort zones and destroy your biases to learn valuable things. Peter Thiel's contrarian thinking runs on this kinda stuff. Think about what has happened in the past several years. Contrarian thinking can turn idiots into geniuses these days. Chapter 3: Hidden vs Too Close to See Eventually, I stopped looking for a hidden far-off solution and started looking closer. You ever search your house to find your lost car keys only to later realize it was in your jacket pocket all along? Too poor to have a house, a car, or a jacket? Well, then keep reading. So I started looking at the in-betweens. What's as close as possible to the decision making agent itself? The first finding is that charts rarely have clear patterns, but human minds often do. From then on, research became straightforward and fruitful. How do I turn that theory into something that makes money, or at least doesn't lose money? I found the major candidates, the independent variables that create these flashes of order, these predictable events or parameters. It's not perfectly rigid, but its the next best thing in the highly volatile world of forex. Chapter 4: Executing 66 Orders First off, it's not as simple as a single mind's biases resulting in huge moves on a chart. To use a basic military analogy, you have to think in terms of a chain of command. From a few big 'minds' to many small 'minds.' Or, you have to follow the killchain step by step. From psychological origination to execution. Obviously, execution is when the order is filled and liable to p&l. We have lots of charting and analytical tools for market movement and execution. But what is the origination? How do you properly connect them? Can you chart or summarize origination and its 'plane?' So far I've talked a lot about psychology, but not much about specific biases relevant to forex. Or how a collection of 'psychologies' in the 'real world' might constitute a broader social factor, which, as a unit of analysis, goes on to influence markets in predictable ways. Does a commercial fund have biases? Does a central bank have biases? Does Wall Street have different biases than the City? Four broad but related questions: What is psychological origination and why do social factors matter? Based on the above, how do you setup or build an 'orderly' chart to find that resilient value? How do you use that knowledge to better manage risk and reduce uncertainty? And by extension, how exactly does that make you a more profitable trader? These questions will be fully addressed across the next several parts (maybe 7 or 8 more). I'm going to skip a deep dive into the first question for now, so you don't get too bogged down on the abstract thinking stuff, and instead mix it a bit with something familiar and more visual in question 2. For the rest of this article, we gotta talk timeframes and contracts first. Chapter 5: Murph's Law Time matters in forex. It matters a lot, and in ways some of you probably have yet to consider. In markets and finance, time shapes the parameters of most contracts. I would use a long analogy from Interstellar and Miller's planet (just watch the movie), but the key here is that: SOME RISK IS NEARLY GUARANTEED (written into the contract) while SOME RISK IS TIED TO SPECULATION ONLY. It's the difference between limited risk that is insured by the past versus unlimited risk that exists only via the future (you can have both as well). Up until now, we have dealt with the second, and not the first. Forex standards and practices (de facto contract rules), give us the first. Let me introduce timeframes, and then return to this so everything connects neatly. There are many different approaches to categorizing timeframes. By the common candlebar duration (1h, 4h, D; in other words it's categorized specifically by the 24hr clock); group A , or by abstract accumulation (like renko or heatmaps or orderbook data); group B . Now, the latter is a loose fit for a timeframe concept, it can be discrete and confusing, but you can argue 'realtime' or 'all-time' as a timeframe in itself. I won't be discussing realtime very much, and I strongly recommend you read the disclaimer far below if you are a crypto trader or have access to prime data or level two data in general. IF you are a forex trader that fits into group B, let's say a Renko trader, then you need not worry about the indicators or models I present. However, I've only known one successful Renko trader, and he had custom designed analytics. So good luck with Renko, gentlemen. I will focus on the group A category of timeframes: OHLC, Henken, line, etc. Everything that follows will be based on those. Chapter 6: Don't Fail Science Class The more you think of markets by real life principles, the clearer everything becomes. Which is why I want to explain timeframes by analogy. You could argue that markets share some basic similarities, at least from a layman's impression, to classical and quantum mechanics. The smaller the timeframe, the more random and chaotic they appear. And vice-versa. The center of price gravity at higher timeframes is more resilient to chaotic bits of new information. It's more certain . To use Bohm's term, you could argue its 'enfolding' or 'enfolded.' That while the general state of things is a chaotic flowing river, whirlpools with a set of persistent parameters can still exist in those rivers. All this really means is that different timeframes/sessions/days require different indicators and/or applications of those indicators. In addition, a full risk management approach takes into account the pairs/currencies chosen as well since their behavior may vary (choosing the river), and the nature of the contract itself (does it have a waterfall or extend forever?). Simple summary: some things are more certain at long-term timeframes and some things are more uncertain at short-term timeframes . Most of you will already know this. Chapter 7: Slaves to the Timezones When I'm talking about short-term timeframes and long-term timeframes, I mean intra-day versus weekly or monthly. Technically you could trade something like the 4h or daily within a single day. (but to avoid confusion, I want to focus on timeframes as the periods from which you open and close positions, not the duration of the candlebar). In other words, opening and closing positions within the 24 hour period (from open to market close). Versus. Positions held across multiple days/weeks. This is very important because they are effectively different types of market contracts because of the risk of rollover. (unless you have an Islamic account) In general: IF YOU ARE HOLDING POSITIONS ACROSS MULTIPLE WEEKS, you need to have either a genius technical or fundamental system OR, you need to be designing your trades with carry conditions in mind. 99% of you will fit the latter. Inevitably, this means your long term risk management must be quite different than short term risk management; particularly in the weighting of seasonality models and interest rates. I'll explain this stuff in the next article, but for now, make a selection: Imagine owning a stock that pays you a dividend (😏), now imagine owning a stock that pays no dividend (😴), and now imagine owning a stock where you pay the company a dividend (😂). Keep your "obvious" selection in mind, because it's gonna upset retail paradigms when I tell you why you're trading the wrong pairs on the wrong timeframes. See you next time. ------------------------------------ DISCLAIMER: Now, I should've mentioned this earlier but IF you are a cryptocurrency trader, and some of you reading this may very well be, let this be clear: I did not design these articles for your consumption. Though crypto is arguably a currency, it's core mechanics are different, as is the psychology of the players involved and the market structure. The legal, tax, and broader financial components vary (the nature of the contracts, the timezone/session influences). Indeed, regulation is the main fundamental in cryptocurrency right now, making it a market potentially susceptible to a near-total collapse (at least for blocks of investors) depending on the providence of your broker or income tax obligations.
Education
by CountofCoins
My Trading StrategyFirst of all it is always best to have a trading strategy before entering a trade as I have made many mistakes in the past with margin trading and I found this way is the most effortless and least straining psychologically method. As I believe this is a huge growth industry, currently I use a Ledger, which are readily available and a great way to store your currency. Replacing the popular margin trading with the more stable 'growth over time method' is safer and won't have you checking your phone every two minutes, checking prices.. For reference currently I plan on holding my cryptocurrency for 20+ years, and passing the ledger onto my family or my kids, for their benefit at the time. I put the most emphasis on the psychological aspect as most trading does take a toll on your wellbeing and state of mind, while simply riding the ups and downs of the market is very satisfying. Constructive criticism / feedback encouraged! Buy and HODL!
BITFINEX:ETHUSDEducation
by Bixley
6
EURJPY psychology can we accept that 1% loss ? so this breakdown shows 2 outcomes and what is possible in both situation and your trading psychology behind both sets up ? can you accept this 1% loss knowing that this trade shows and lines up with the higher time frames ? and seeing how we got there with some strong momentum would this put you of this trade ? biggest issue behind trading falls from your emotions we wouldn't take this trade if we haven't risk correctly or we haven't respected what the markets give us or we revenge trade after taking loss after loss accept any outcome and train your mind to cut your looses and ride your winners happy trading :)
Education
by LucasMatthew
GBPAUD trading corrections and understanding the middle sectionhi guys so a quick lesson on trading corrections if we can confirm a middle section within a pattern this has a higher probability on what price will do next we then filter on the lower time frames for a tighter entry we only trade in probability and we accept any outcome with any trade we place and having the right psychology we make you a better trading in the long run :) hope you all have a great new year guys and girls stay safe :)
Education
by LucasMatthew
The Secrets to Forex & Why You're the Wrong Type of Loser (pt.1)This is a 'many-part' educational series to help turn smooth brains into folded brains. The series reveals the true power of the social and psychological factors shaping markets. This is abstracted from 7,000 hours of research in markets and finance and is a synthesized thesis between my research, John Boyd's work on strategy and adaptability, and David Bohm's theories on emergent behavior. The endstate for the reader will be vastly improved risk management, and novel methods for reducing uncertainty. Part 1: Why 85%+ of Retail Traders are the Wrong Type of Loser The true holy grail of markets.. the risk-free rate of return asset, doesn't exist (even perpetuity coupons aren't risk-free). Risk or uncertainty permeates all aspects of our reality. Managing risk is a fundamental component of all business, law, politics, military affairs, sports, etc. It is essential to any form of competition (which markets are). Virtually every element of any strategy employed anywhere involves risk management. It's more than just money... its everything; your relationships, your happiness, your experiences. Your ability to manage risk and uncertainty will positively correlate to your future quality of life. Why? Because we can't see the future, but we live into the future. Thus, no matter your wealth or political power, uncertainty is still your master. Fear of uncertainty drives your psychology, the psychology of other individuals, organizations, and even nations. And what these entities do, affect you. Even at subconscious levels. Those that fight uncertainty, do so at varying levels of competence. In the world of derivatives, and for our interests its sub-class: forex, speculation against uncertainty shapes most of the price discovery experience visualized on your favorite candlebar chart. What happens on your chart on higher timeframes is the result of speculation; even those with carry trade positions are still speculating about rates and central bank decisions. The only people who aren't speculating are insider trading, which is illegal. It's illegal to not speculate... Make no mistake, in the world of speculation, those that fight the best battles, are the ones who fear uncertainty the most and go to the greatest lengths to conquer it. But we already determined that you can't conquer it, you can't see the future. So what does a 'best battle' or 'meeting halfway' even look like in trading? What do you call a loser that doesn't always lose? Let me stop for a second. You're probably thinking: 'this is obvious, no one wants to lose money, everyone is afraid of what they don't know, the future is unknowable, etc' 'How does this help me make money?' First, you need to understand what you are in this game called Markets. In this oddly balanced game, those with the most to lose often have the biggest say. And vice versa. You are the vice versa, the retail trader. Retail traders comprise 4 categories that often overlap, ie: people who usually do not have a professional background in investing/trading, or a professionally relevant education, or professional connections as a major client or data access, or a high networth. Your competitors are the opposite (they are all those things and more): the winners, the market makers, the whales, the money printers, the ones with the biggest say, the old money, the 'smart' money, whatever cringy title you want to give them. Commercials/institutions/fund managers/portfolio managers/pension managers/etc.. These guys are speculating about the future, just like you. But their speculation is what shapes price discovery and market movement, YOURS DOES NOT. This means that whatever you think the market does or should be, DOES NOT MATTER. Your fibonacci, does not matter. Your head and shoulders shampoo/pattern, does not matter. Your sup/res lines, do not matter. Your moon cycles, do not matter. Your RSI/MACD cross, does not matter. The only thing that matters, is what these commercials/institutions think. That's it. If they think that this head and shoulder on the 4h EURUSD matters, then it matters. If they think the moon cycle this month matters, then it matters. If they think communism is good for business, then it matters... etc. It's exactly as irrational as you might think. Now, with their fiduciary responsibilities, they do have to justify their picks. So moon rune interpretation is usually off the table. But guess what. These guys, despite their immense wealth, their research teams stocked with specialists with PhDs, and all the instant access to prime data in the world.. they still lose. They lose all the time, and they lose big. Eye wateringly big. The vast majority are barely winning 60% of the time, if even that... That's why many are offloading into 'less competitive' money-making opportunities; like underwriting, checking accounts, or alternative investments. Competition itself is too much of a risk for their uncertainty appetite. You have to applaud their level of greed. But to stay on target. Whether your technical system is profitable or not is often a factor of the fitness of your indicators with whatever strategy the commercial is using to execute entry implementation (or combination of models or commercial strategies). And when a few of their models/strategies are losing, it makes it even harder to win at this game (or in those instances, your system might win, whilst you rejoice at the amazing ability of your moon cycles to predict the future). But let's back this up, did some of you notice something off? 60%~ ... That's actually not bad. A trader who's experienced at losing (and yet making a profit in the long run) would kill for an average position win rate like that. Instead of thinking, "how do I avoid losers entirely" Stop wasting whatever brainpower you have. Start thinking, "how do I minimize my losers?" The losing positions are always going to happen, no matter your system. All edges fade, and even a mythical system that won 90% of the time will weaken over months or years. But if you learn to master the art of 'losing,' the overall win rate of your positions can AFFORD to be low. In many cases, it could even be less than 50%, and you could still make a living as a trader/investor. The best and brightest, the commercials and institutions, are barely going 60%. What makes you think you can do better? Does it mean all hope is lost? Not even close. It simply means that you need to focus less on your directional/positional bias strategy (the winrate), and more on your risk management strategy. You have to become the right type of retail trading loser, the 15%~ or so that retail brokers survey as profitable. These guys are losing 40%, 50%, 60%, even 70% of the time, and some of the them are still making big money. It's counter-intuitive but they are the guys winning at losing, and turning that into a living. Your ability to survive losers.. to adapt to uncertainty , is the first secret and the most important step into the weird world of profitable derivative trading. Okay, so you might be thinking: "Again, obvious. Isn't that just 2%? Isn't that just low margin? Only trade Majors? 100 pip SL?" If those were the first things you thought, then we still have a very long way to go. Fortunately, this is just the introduction. See you next week for part 2: 'time as the dominant parameter, fair value, and the 'center of gravity.
Education
by CountofCoins
Trading MindsetWELCOME TO WORLD OF TRADING Hi everyone, what I am about to talk right now is concerned with trading psychology. Everything that I am about to say right now is also a crucial aspect of my psychology and mindset that is fueling me to write this for you guys. Hence, we can deduce one thing from this. Psychology is the most important factor in deciding your future as trader. I will be honest upfront with you guys. So you’ve been introduced to the world of trading by your friend, family or anyone that doesn’t matter, so you’ve been told how the guy next door is making thousands of dollars with just few hours of work while you out there hustling yourself to exhaustion and making just about to survive your month doesn’t seen fair right? And exactly this guy has results to show for it to make you believe how if he can do it anyone can. Or you’ve seen couple of stories, Instagram post, Facebook post promising exponential gains in a few hours. With that said I want to address 2 main problems associated with trading which I believe are significantly important to understand before you step out there or if you’re already out there and struggling. 1) Holy grail in trading (a way or a method that will promise you returns on daily basis) Holy grail in trading what is it and does it exist? To answer this question, I want you to ask yourself a question first: why you are trading and what do u want to achieve from it Now that you’ve asked yourself that kindly note if the answer to these questions is (firstly: I want to accumulate wealth as soon as possible and drive a luxurious car next month. Secondly: I only want to find a way in trading that works 100% and gives me return on my investment daily) If these are you believes I am afraid to say you have work to do on yourself not on your system of approach of trading. Financial markets are a world of chaos there are millions of possibilities out there every day (imagine you just focus on 1 possibility consistently every day, where will that take you in the next coming years think about it) There are successful traders out there, trading and making living out it (the so-called narrative only 5% of people can make money in the markets) where’s the difference? The difference lies not on support was breached, trend line was broken or respected but on their mentality and mind set these people very well understand how market moves and work but be cautious they will never follow the market: no one in world has the intellect and memory to remember each and every tick movement of the market these people are focused on themselves and their performance in the market. They know exactly when to trade and when to stop trading. The approach of such people is not irregular but systematic and disciplined. To sum it up financial world is a world of chaos with billions of possibilities (FOCUS ON THE ONE THAT MAKES SENSE TO YOU AND COINCIDES WITH YOUR PERSONALITY AND ROUTINE) anyone can trade Weather your doctor or an engineer or just a high school student provided you are consistent, disciplined and motivated (YES UNDERSTANDING OF MARKET MOVEMENT IS VERY CRITICAL BUT YOU DON’T HAVE TO FOLLOW AND TRADE EVERY MOVE). 2) More importantly your Mind set (psychology) Now if you remember I asked you 2 question in the beginning 1st paragraph. If you focus on the fundamentals of that question, they are based on you and your way thinking (NOT ON YOUR METHOD OF TRADING LIKE I STRESSED EARLIER THERE ARE BILLIONS OF WAY OF MAKING MONEY IN THE MARKET STICK TO SOMETHING U BELIEVE IN ) I myself have been trading for almost 1 year am I a millionaire? No, I am not (and I say it proudly) I too was introduced in a conventional way just like many of you are. But trading (IS NOT A GET RICH QUICK SCHEME) (THIS NEEDS TO BE OUT THERE) but rather a skill set and unregulated chaotic state of mind that needs correction and discipline of execution which will I guarantee you results which brings me to my final and most important point YOU ARE THE MOST IMPORTANT PART OF YOUR TRADING JOURNEY Focus on yourself (yes u do need to understand the dynamics of market and its movement but alone with that I’m sorry to say you can’t achieve what u hope to achieve Let’s do some simple math’s in term of percentage shall we to give you an idea what I’m talking about Account size USD % return on investment USD ROI Account size X10 USD % return Usd ROI 1000 2 20 10,000 2 200 10000 2 200 100,000 2 2000 100000 2 2000 1,000,000 2 20,000 Don’t exhaust yourself trying to get rich fast as possible that won’t work at least not in the long run focus on getting solid return percentages first weekly, monthly, yearly consistently and get a job to build yourself step by step don’t rush the process and always believe in yourself give me a like if you agree
Education
by Danialhassan
1
Tired of Losing?"The Market cannot hurt Me. I can only hurt my Self!" - Josh Ridenour There is a Time for Losing - The 29th verse of the Tao Te Ching is about how there is a time for everything in life. A time for being ahead, a time for being behind. In the market, there is also a time for everything. A time for large profits, small profits, break even trades, losers, and consecutive losers which lead to a draw down. It is easy to get caught up in the heat of the moment depending on where you currently are. But it does not really matter what part of the cycle you are in, it is all part of a traders life and the cycle of a trading performance. Stop Predicting! It is a false belief to believe prices and markets can be predicted. If it were possible eventually the majority of market participants would figure it out and there would be no one left on the other side of the trade, and the market would cease to exist entirely. If it were possible to predict markets, you could avoid losing trades and only take winners. Anyone who has been trading for very long knows this is simply not the case. The problem with making predictions is you then shut your mind off from the information the market gives you. Instead of being open to what is happening, your mind becomes rigid and can only take in what confirms your beliefs. This prevents you from being able to flow with the market, and open your self to the opportunity in front of you. The best traders admit when they are wrong, get out, and even reverse if necessary. If you dont believe this - listen to a stock analyst on Mad Money or any other TV show about stocks. They are often so confident in what they say that they might even convince you! But there is a reason why he is on TV talking about markets, and not trading them. If he could trade the markets and make money he would have no reason to go on TV as the financial rewards are miles apart. In fact, analysts make the worst traders because they are so caught up in their thoughts and beliefs about market direction that they cannot trade effectively! Cease efforts "Wu Wei" In Eastern Philosophy there is a term "Wu Wei." It cannot be fully understood or explained in words, only experienced. At the essence of its meaning is to "Let be" to "allow" or "flow like water down a stream." The point is to stop resisting, and stop trying so hard. The harder you grasp at something, the harder you try to succeed, the more you fail. If you are constantly trying to make money, and constantly trading, you are probably not making a consistent return. Rather than trying so hard, let trading come naturally. Profitable trading is effortless. It does not require thought, only action. In fact, I try to do as little as possible, and trade as little as possible. My most profitable weeks I hardly trade at all! This has become a fundamental aspect of my trading system. Instead of constantly trying to make money all the time, I simply wait for a pot of gold to be in front of me before I do anything. Then, I take it. Again if you dont believe me; try as hard as you can tomorrow to make as much money as possible and see what happens! Stop Trying to Remove or Control Emotions - Most traders who have been trading for a while come to the idea that emotions prevent them from success and are standing in their way. I know, as I have been there. And so we try as hard as we can to remove emotions from our trading. There is a problem with this concept. You are a human right? As long as you are human, you will have emotions; no matter how hard you try to remove them. It is simply not possible. So removing emotions or attempting to do so is the wrong approach. Instead; use your emotions to your advantage! They are warning signs; listen to them. Then there is the negative internal dialogue which the market often brings out. After a series of losing trades, many traders get upset and feel bad. They blame the market for taking from them, and feel like a loser. How do you think a trader will perform after feeling this way for a few days or longer? His performance suffers as he tries to take back what was once his and he compounds his mistakes by trading out of a negative mindset. You have to learn to recognize and become aware of your internal dialogue. It is very important to your trading career, and your every day life. Most of us live our lives without the slightest idea as to what we are doing to our selves. Your mental structure is a choice. This is what I mean when I say "The Market cannot hurt me, I can only hurt my Self." My Trading Psychology book "A Traders Mentality - The Path of Self Discovery and Being a Trader" is all about these ideas and how to free your mind and better your trading performance. If you found this helpful, please like! Feel free to comment or ask questions.
Education
by tradersmentality
The Hardest Part of Trading (Not what you Think)Seeking More information - When first introduced to markets, every beginner immediately thinks he must learn the rules of the market in order to succeed. He initially believes there is a "holy grail" a system, a leader, or a mathematical equation like Fibonacci levels. He believes these will protect him in the market, and will lead him to a profit once he understands them. The problem is, there are no set rules which work consistently in the market. If there were, the institutions and everyone else would simply use them. What would happen then? Well, there would be no one or institution to take the opposite trade, and the market would cease to exist altogether. And so the new trader changes from one system to another, from one guru to another, and constantly thinks he must learn more information in order to succeed. What he believes to be preventing his success is a lack of knowledge, a lack of information. But you see, the more information you have does not necessarily lead to better decisions. There is a lot of evidence to support the contrary, and suggests that too many choices actually impair decision making skills. On top of this, most of the information in the trading world is quite simply wrong. There are 10 x more scam artists who claim to "know" and will take your money to teach you how to trade than there are profitable traders. These people do not understand markets them selves, and cannot make money in the market, so instead they prey on new market entrants. This is the primary reason I started my trading website; to provide high value information at a low cost. And to give those who are serious about trading an actual chance to make it in the markets. Dealing with Uncertainty - The reason most traders seek new information is because they are afraid of uncertainty and want certainty. They seek something to protect them in the market. Something to protect them from themselves. A system that will guarantee a profit. But there is no such thing. Markets constantly change and evolve through the market cycle. And there is no system that works across all three parts of the market cycle. The sooner you realize this, the closer you will be to making a profit. It is very hard to learn how to deal with uncertainty. But you do it every day. When you wake up in the morning are you certain you will live through the end of the day? No, and you can never be completely certain of this. Certainty is an illusion. There is no certainty in this life. The only certainty is... uncertainty! Patience and Discipline (Ability to Do Nothing) - Every profitable trader uses these two terms (patience and discipline) when asked how they are profitable. When a beginner hears this, he rarely understands what this means. Discipline means doing something even when you dont want to do it, or doing something you dont want to do. Patience means waiting for your turn, or waiting for something to happen. In other words, when the time is not right you must do nothing. This stokes a fear in most people, especially in today's give me distractions, social media world. They say "Well what am i supposed to do if i am doing nothing?" Doing nothing seems contrary to getting what you want, getting somewhere. In and outside of the trading world everyone believes in order to be a "trader" you must trade - constantly. This is why most lose money. Because they do not understand that there is a time for doing nothing. And that time is most of the time! See more on understanding markets (Price Action Trading) and yourself (Trading Psychology) at my website below. If you found this helpful please like! Feel free to comment or ask questions.
SP:SPXEducation
by tradersmentality
How to Trade to Win"Those who lose - trade not to lose. Those who are successful - trade to Win." Losing Vs Winning Most traders are more focused on not losing than they are on winning. Do you understand what this means? This means you are acting not in your best interest, but against your self. By focusing on how much you can or might lose, or on not losing, you increase the likelihood of making mistakes which ultimately lead to a losing traders equation, and a negative equity curve. Profitable traders do not care about losing. They understand it is part of winning. They focus on winning. What is the best move in this moment? Should I get out or continue to hold based on what the market is telling me? Winning traders accept the risk totally and completely; before getting into the trade. In other words, they have already lost what is on the line. Therefore they act in their own best interest, not based on their thoughts about what they could lose, but based on what the market is telling them to do in this moment. Other than this psychological difference, here are a few other key components on How to Trade To Win. Defined Edge - Every trader who is making money in the market has some form of edge which he employs. Even if his edge is purely intuitive. This is extreme and rare however, and most traders have clearly defined their edge and will only trade that edge. This removes randomness. Many beginners think they are going to study the market and be able to trade the market no matter what it is doing (trade intuitively). This is simply not the case for most. The purpose of studying the market is to identify opportunities in form of an edge. An edge is a setup or context which repeats itself over time. It might occur once a day, once a week, or once a month. It does not matter. All that matters is that you only trade your clearly defined edge, and leave the randomness behind. For more information, you can read about the edge I use in every market I trade. We also describe how you can develop your own edge, and trade it in any market. Stop Doing, Relax Efforts - If you are losing in the market, chances are you are doing too much. Many beginners, and even experienced traders think they must be trading in order to be a successful trader. This leads to random trading, over trading, and mistakes which compound themselves. You end up digging a hole, and instead of looking for a way out, you look for a different shovel. The harder you try to make a profit, the more you do, the more actions you make, and the more you lose. The market rewards those who are observant, disciplined, and most importantly patient. The market takes from those who try too hard, and do too much. If you dont believe me, try as hard as you can to make money, and see how you do! By relaxing your efforts, you relax your mind. In turn relax your actions and decision making. You do not have to trade every day to be a profitable trader. It sounds paradoxical doesn't it? How can I make money trading if I dont trade? By only trading when it is appropriate like when your edge is present, you better your odds of success. Profitable trading does not come from trading constantly. Profitable trading comes from the act of non-doing, and out of a state of emptiness. Profitable trading is effortless, it comes out of waiting for just the right moment before taking action. And then waiting some more while the market proves you right or wrong. Profitable trading is not forced; it just happens. Active VS Passive Trading - This is very similar to the previous topic. Active trading is a trader who is constantly in the market, trading whatever he see's or feels right. This trader is often wrong, and when he is right he makes the mistake of exiting too early due to fear. This leads to a negative traders equation as he continues to struggle to do the right thing. An Active Trader mentality is one which does not believe in "non-doing." He believes he must, and can, do something. He is afraid of missing out and is often swayed by thoughts and emotions. So he continues trading never looking back, and at the end of the month cannot figure out why his account is in the red. A Passive Trader is the opposite. He passes on more trades than he takes. He does not care about what he misses out on. He only cares about what he takes and the actions he makes in the market. He does not force trades, he just watches the market until he knows what to do. Or he waits and waits until his edge finally sets up. He is passive in his efforts, rather than active. He does not care if he doesn't trade today, this week, or even this month. Trading is not what is important to him; winning is. He knows that profits come from sitting, waiting. Because he is willing to wait, he is peaceful. And profits continue to come into his account, effortlessly. For more information on developing this type of mentality, see below. We also detail how to understand markets through price action, how to create, define, and employ an edge, and how to develop your traders mentality to succeed in markets. If you found this helpful please like! Feel free to comment or ask questions
Education
by tradersmentality
Unethical trading representations (educational)This topic has not to my knowledge been covered on Tradingview before now. I specifically explore ' unethical trading representations' and explain in the limited time what that means as a concept. To be absolutely clear, I am not asserting that every paid-for service or representation is unethical or illegal. What I am saying is that new traders and the inexperienced are like 'fresh meat' for these schemes, that aim for a small percentage of them. The impact assessment - whether or not new traders pay for 'inner circle' access in these things, is of real importance. Nothing said in this post refers to any identifiable individual, group or entity. New traders especially need to be hyper-vigilant and cautious before parting with their money. But even if not parting with money, the potential negative impact is of importance. I declare a personal bias, that I have been stung by three of these early in my trading career.
Education
by Captain_Walker
MOST IMPORTANT TRADE LESSONS!Lesson 9 Trading Psychology is Important When you look at the market you should see your self. The market is a collection of buyers and sellers. You are a participant in that marketplace, and therefore you are the market. How can you understand the market without understanding yourself? The mental landscape of a trader is extremely important and very valuable to a profitable trader. Those that do not understand this, are likely not making money in the market. Most people wanting to be traders never stop to consider this, and they think it is more knowledge about markets they need to make money. Most of the time it is what is going on in their mind that needs work. If you think you are going to wake up one day and be a profitable trader without working on your self, you are mistaken. If you think you are going to read a few books or watch 100 videos on trading and walk into the market the following week and make money, the traders who know the value of internal work will thank you for your money! Of course you must first understand markets, price action, the traders equation, and how to read a chart. But after that you must move on and dive into your trading psychology . It is not understanding markets that brings money into your account. It is your understanding of your perceptions of the market, awareness of your internal dialogue, thoughts, and emotions, along with your knowledge of the market. Ultimately it is your actions that are generated from these that dictate whether or not you will make money. If you do not understand what is happening within your mind at any given time, you are unlikely to achieve consistency long term. Sure you may pick a few good trades. Anyone can find themselves in a winning trade, even those who know nothing about markets. But will they continue to perform well over a month or a year? It is very unlikely. Trading psychology is vital to trading, whether you choose to accept it or not. The market is a paradox, a contradiction. If your mind is tied up and you are unaware, you will make poor actions in the market. Your mind must be free. Free to flow with the market, regardless of what you want or expected. You must be able to bring your mind back to the market and the necessary action right now. If not, you will be stuck within thoughts of what happened 5 minutes ago, or held by anger and frustration for what the market should be doing. If you do not devote time to understanding your mental landscape you will never grow, and never escape the mental turmoil which the market can cause, no matter how much time you devote to understanding what markets do.. For more information on how to develop this awareness or understand your self on a deeper level, see trading psychology. Lesson 10 Allow for windfall profits Many traders believe they must hold for a reward of twice their risk or believe they have high probability and so exit at one times the risk before the market takes it back. These concepts and ideas are more likely to hurt your performance than benefit it. The truth is, the market offers what it offers, and that's it. Sure sometimes its exactly 1x the risk or twice the risk. Other times it is much more. Cutting a winning trade just because it is reasonable, does not make it the best choice. In fact, when you are in a position with exceptional follow through, you must allow it to flourish. In other words, you must allow it to grow into a windfall profit. It only takes 1 out of 10 of these types of trades to create a positive net result. If you cut this 1 trade short because the market has gone to twice your risk, you are only hurting yourself and your numbers. This is like cutting a flower when it is just starting to bud. You do not allow the flower to bloom , and prevent the beauty which will soon appear. Instead you must nourish the plant, give it water, and allow it to grow into what it can be. Cutting a winning trade short is a self inflicted wound. This is often due to fear such as fear of a reversal, or fear of giving back profits. Thoughts of getting back what you previously lost, or hanging on to what you have right now is what leads to these poor actions. Being unwilling to allow for a pullback against the position which is necessary to allow it to grow. So how do you know when to hold and when to exit? That takes experience. What is important is your willingness to learn, and openness to allow a great trade to flourish. However there are signs which can help you identify which trades are likely to turn into a windfall profit, and those that you should take what the market offers you. For clarity and more information on this see Investing Guide. *If you find this analysis helpful please like! Feel free to comment or ask questions.
COINBASE:BTCUSDEducation
by tradersmentality
Lessons from an Experienced Trader #3Lesson 7 Trade Outcome is Random The outcome of any given trade is random, no matter how strong your edge is. It is impossible to predict whether a trade will result in a loss, decent profit, or a windfall profit. Contrary to what most Price Action traders and price analysts believe, you cannot and will never be able to predict the market. Most amateur traders fail to recognize this fact, or deny this reality altogether. They believe eventually, they will be able to avoid losing trades and pick winners. They do not understand the outcome of any given trade is random, and therefore impossible to know before hand. Consider weather prediction as an example. Meteorologists have highly sophisticated weather models and algorithms to predict weather behavior, just like traders and institutions in the market. Yet the weathermen cannot accurately predict what will occur. They can say "There is a 60% chance of rain today if you live in X." But they cannot say exactly when or where rain will fall. It is the same in the market. You may have a good idea of what may occur, and even be right! However, there is still a reasonable chance (usually around 40%) that you are wrong, and the exact opposite will occur. The market is always right. It does not matter what you think or believe should or will happen. All that matters is what is happening. Just because a trade looks good or an edge is strong, does not mean it will result in a profit. There is still an opposing probability that it will fail. The point is that you will never know beyond a reasonable doubt what the market will do next. You may have a hunch, or a strong edge, but that will only get you so far. Therefore the only thing to do is to always take your edge, because you never know if this will be the windfall profit you are looking for, a small profit, or a loss. And quite frankly, it does not matter! Lesson 8 Market Outcome Does Not Matter The outcome of any single trade does not matter. It is very common for traders to become attached to the outcome of this individual trade. This is what leads to emotions, anger and frustration with trading and the market. We get stuck in the mindset that we have to win X amount of profit like 2X risk on this trade, or have to make money every day to be a profitable trader. This is not the case at all. In fact you only have to win one 1 or 2 really good trades out of 10 to maintain a consistent performance. Any single trade is irrelevant to a trading system or strategy. It is the cumulative result over a series of trades that results in a profit. This is why it is so important to know and only trade your edge, otherwise you introduce randomness into your performance, and are unable to produce consistency. *If you find this analysis helpful please like! Feel free to comment or ask questions.
AEducation
by tradersmentality
2
Lessons from an Experienced Trader #3Lesson 7 Trade Outcome is Random The outcome of any given trade is random, no matter how strong your edge is. It is impossible to predict whether a trade will result in a loss, decent profit, or a windfall profit. Contrary to what most Price Action traders and price analysts believe, you cannot and will never be able to predict the market. Most amateur traders fail to recognize this fact, or deny this reality altogether. They believe eventually, they will be able to avoid losing trades and pick winners. They do not understand the outcome of any given trade is random, and therefore impossible to know before hand. Consider weather prediction as an example. Meteorologists have highly sophisticated weather models and algorithms to predict weather behavior, just like traders and institutions in the market. Yet the weathermen cannot accurately predict what will occur. They can say "There is a 60% chance of rain today if you live in X." But they cannot say exactly when or where rain will fall. It is the same in the market. You may have a good idea of what may occur, and even be right! However, there is still a reasonable chance (usually around 40%) that you are wrong, and the exact opposite will occur. The market is always right. It does not matter what you think or believe should or will happen. All that matters is what is happening. Just because a trade looks good or an edge is strong, does not mean it will result in a profit. There is still an opposing probability that it will fail. The point is that you will never know beyond a reasonable doubt what the market will do next. You may have a hunch, or a strong edge, but that will only get you so far. Therefore the only thing to do is to always take your edge, because you never know if this will be the windfall profit you are looking for, a small profit, or a loss. And quite frankly, it does not matter! Lesson 8 Market Outcome Does Not Matter The outcome of any single trade does not matter. It is very common for traders to become attached to the outcome of this individual trade. This is what leads to emotions, anger and frustration with trading and the market. We get stuck in the mindset that we have to win X amount of profit like 2X risk on this trade, or have to make money every day to be a profitable trader. This is not the case at all. In fact you only have to win one 1 or 2 really good trades out of 10 to maintain a consistent performance. Any single trade is irrelevant to a trading system or strategy. It is the cumulative result over a series of trades that results in a profit. This is why it is so important to know and only trade your edge, otherwise you introduce randomness into your performance, and are unable to produce consistency. *If you find this analysis helpful please like! Feel free to comment or ask questions.
Education
by tradersmentality
Overcoming Emotions and Zen TradingOvercoming Emotions Most traders want to "overcome" their emotions. They view thoughts and emotions as the enemy which prevents them from succeeding in the market. This is a false perception. Yes emotions and thoughts can lead to actions in the market, but they are impossible to remove. So long as you are human you will have emotions and thoughts. There is an alternative to removing them, and that is to use them to your advantage in the market. By practicing mindfulness, which is awareness of thoughts, emotions, and perceptions, you can learn to recognize how these affect your trading performance. By recognizing and being aware of them, you have a chance to change the outcome. For instance if you consistently enter poor trades due to fear of missing out. When you become aware of this fear you can learn to stop yourself from entering and avoid the poor trades that hurt your performance. There is a direct correlation between how you feel about yourself or the market, and how you perform. If you are worried about money you will overly focus on risk or prices going against your position even if only slightly, and likely make a mistake by exiting too soon. Or you do not want to take the loss and will hold the trade too long, hoping the market will let you off the hook with a smaller loss. What is Zen Trading about? Zen trading is a mindset of flowing with the market without hesitation, being aware of and trading along side emotions, and making actions intuitively rather than forcefully. A Zen trader remains in a relaxed, effortless state of mind; without any internal struggle. He does not attach his self worth to his performance at any given time, and is unhindered by market outcomes. He acts on his edge when it is present without hesitating, and takes what the market gives him when it is time to do so. He trusts himself, his strategy, and the market to provide him with a consistent performance over time; whether or not he makes money on this trade, today, or this week. He is aware of the bigger picture; the Tao or life, and knows there is more to life than trading or money. Trading is not his life. It is simply something he does to earn a living, and he seeks to maintain a Zen spirit in his trading and actions in the market. *If you find this analysis helpful please like! Feel free to comment or ask questions.
COINBASE:BTCUSDEducation
by tradersmentality
Lessons from an Experienced Trader #2Lesson 4 Know what you want in the market Contrary to what most believe, successful traders do not actually trade constantly. Attempting to trade constantly leads to increased commission costs, random trading, and compound mistakes. In fact, successful traders spend most of their time doing absolutely nothing! How long does it take to enter an order? A click of the button. A few seconds. Maybe a few minutes at most to create bracket orders. So what do Professional Traders do the rest of the time? They wait. They wait until the market offers what they want or are looking for. Then after entering they wait some more to see if they are right. They wait for the market to provide them with the information to either hold, or exit. They allow themselves to Be, the trade to Be, the market to Be and do what it is going to do. They do not force actions or attempt to make the market do what they want. They wait until the action comes about on its own, until it is natural, a reflex. If you do not know what it is in the market that you are looking for, you will fold under pressure and confusion. A Professional Trader knows exactly what he wants (not just to make money), he knows what he is looking for in the market, and is willingness to wait for it to arrive. By doing so, he is rewarded and paid by the market for his patience and willing to do nothing. Even if this means not trading for hours, days, or even weeks depending on the time frame. It is far better to do nothing and avoid unnecessary losses, than to try and create tensions, forced actions, and lose money. You have to ask yourself "What is more important? The actual act of trading, or making money?" Lesson 5 Define your edge An edge is what you have defined as being what you want from the market in the previous lesson. This can be anything from a specific setup, to just plain context like a strong market. If you do not know what your edge is, you will struggle to perform consistently due to randomness. Many new traders, especially those who follow price action, believe they should be able to trade the market no matter what the context is. If you think you are just going to walk in to the market, trade based on whatever the market is doing and make money; you are fooling yourself. Doing so will lead you to trade randomly, entering willy nilly at the market, and make many mistakes which will cost you your profitability. Do you walk into Walmart or Aldi's without knowing what you want to buy until you get there? No, you have a list of items, or at least an idea of what you need before you go. Do you start a business because you woke up this morning and thought it would be nice to own a car wash? Hopefully not. You first identify an opportunity, and then create a business model after a lot of research. Then finally you open the business. Of course everyone thinks or says "well so and so does this and that, and he seems to be making money." Sure, maybe he is, maybe not. If he is, he has defined his edge and is simply employing it. What someone else does has absolutely nothing to do with what you should be doing. Once you have defined your edge, you must wait for it to arrive. If the market is not offering what you want or what your edge calls for, you do nothing until it is. If your edge is a trend trading method and the market is in a trading range, you do not trade until the market is trending. If you have not clearly defined your edge, you should not trade. If you do not know what it is in the market you want and are looking for, you have no business in the market. Simple as that. If you chose to do so, you are putting yourself at unnecessary risk and trading randomly. Yes this sounds harsh, but it is the reality of the market. The market will not give you anything, especially if you don't even know what it is that you want!
COINBASE:BTCUSDEducation
by tradersmentality
Lessons from an Experienced Trader Lessons from an experienced trader. Lesson 1. Never scalp. Although scalping seems to be the most profitable and best method in today's market, it is certainly not. Scalping is the hardest method to achieve a consistent performance. High frequency trading firms scalp, but they have many advantages over the retail trader including direct access to exchanges, highly developed algorithms with no emotions, and extremely low costs to name a few. When you are scalping you are competing against these firms or trying to manually do what they do with a computer. This above is only one problem. The bigger issue is the risk involved. When scalping, you must use a wide stop and be willing to scale in. One bad trade will erase 20 or more good trades. You must be extremely proficient at reading price charts, and be able to act without hesitation. This is virtually impossible for anyone who has not been trading for at least 3 years and has done extensive work on himself to develop the ability to flow with the market, constantly, without any internal conflict. And worst of all, scalping leads to bad habits. Once you get into the mindset of "get out quick" it is very hard to correct down the road. This makes swing trading more difficult later on after you realize it is a better method. Lesson 2. Swing Trade the best setups Swing trading is much more forgiving than scalping, offers a larger reward, and allows for a smaller risk (usually). This makes it much easier to make money long term. When swing trading you only have to win on around 40% of your trades to make a profit. If you can develop the patience to wait for strong setups, you can increase the winning percentage to anywhere from 50-70% and greatly increase your traders equation. A swing trading approach is also more forgiving when it comes to reading price charts. Some of those who discuss Price Action would lead you to believe you can predict what the markets are going to do next. This is simply not true, no matter how good you are at reading a chart. There is always a degree of randomness in the market, with any edge, any setup, or any context. When swing trading, you can afford to be wrong and make mistakes. So what setups should a swing trader take? Well, it depends if you want to always in trade or swing trade with signal bar stops. Either is fine, although an always in approach takes more practice and is harder to get right until you are good at reading charts. An always in trader has two choices. One to take every logical reversal (hardest to accomplish), and constantly reverse when necessary. Or two; wait for the always in direction to be clear and enter any in any fashion until the market flips. The second method is easier, although still tough, and slightly less profitable. An always in trader does not trade when prices are in a trading range. The reward is simply too low, and there are too many reversals to take and that fail, resulting in repeated losses and increased commission costs. What about a swing trader? A swing trader typically uses a signal bar stop, but can also use a swing stop to increase his probability. A swing trader does not have to take every trade he sees (unlike the first always in trader). In fact, it is best to wait for the best and clearest setups. What setups are these? High 2's, Low 2's (large) reversals and flags, Wedge reversals and flags, failed breakouts, and failed reversals. The first two are much easier to identify correctly for someone with less experience. The later two often trick newer traders, or fail once or twice before succeeding, making it a bit harder to get right. Lesson 3. Work on your self Like discussed before, most new traders and even those who have been around but haven't reached consistency believe that eventually you can read prices well enough to predict what will happen next. It does not matter how long you have traded, you will never predict the market. If it were possible to do so, the market would cease to exist! So instead of only focusing on reading charts and price action, you must work on your self. You must understand your strengths and weaknesses. You must be aware of your emotions and how they affect your performance. If you do not believe your emotions are directly related to your performance, you will not achieve consistency long term. We are all humans, a computer cannot do what I do. And you cannot remove emotions, no matter how hard you try to do so. So what is the alternative? Develop awareness of them, and use them to your advantage! It is as plain and simple as this. Trading requires you to understand your self, on a deep and internal level. You must be in tune with your self and the market. If you chose to ignore this fact, you may succeed temporarily, but it is only a matter of time before your performance diminishes. In order to make a lot of money, you must feel you deserve it. If you do not work on yourself, this simply will not happen. Does a professional athlete become a star by waiting around for his coach to tell him what to do? No. He dedicates himself in every possible way to his sport, including conditioning his mind to outperform his competition. Rather than waiting 2 or 3 years before realizing this, start working on your self from the very beginning. Not only will you become a better trader faster, you will become a better person; a better you.
AEducation
by tradersmentality
4
Introduction to Trading PsychologyIntroduction to Trading Psychology Learning to read a price chart takes a while, but is relatively straight forward. It is obvious learning how to read a price chart alone is not what leads to consistent profits. So, what is it that separates the very few successful traders from the so many failures? Is it their strategy, their money management skills, IQ, were they born with a different skill set than most, do they work harder than most, or are they just plain lucky? All of this sounds plausible, but are they really the driving factor behind consistent profits? The short answer is no, none of the above. Perhaps we have been looking for the answer in the wrong place all along. In fact, most traders never even consider the possibility that it is their attitude or mental habits which prevent their success. What truly separates the winners from the losers has nothing to do with external factors, but rather what goes on internally while observing and engaging the market, or in other words; a trader's mentality.
Education
by tradersmentality