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Inside the Mind

When I impulsively take the first type of countertrend trades (i.e. missed a good trend), here’s what is going through my mind:

  1. Woah, the move has already gone quite a distance.
  2. Sigh, I should’ve taken that entry earlier. I shouldn’t have followed my trading plan so strictly.
  3. Should I get in now? No, I cannot get in any more, I cannot chase the market, it’s too risky, I have no logical stop nearby, you don’t know when it might reverse down quickly.
  4. I have already missed the move. I need to wait to enter in the opposite direction when the trend ends.
  5. The trend has gone too far, it must turn soon
  6. Look! There’s a bit of resistance, the trend is about to turn, go short! (for an uptrend)

And the countertrend trade is made! Below are what I think are the psychological process at work:

  1. Observation
  2. Regret
    • Trading is always full of regrets. You always think you can do better.
  3. Indecision, uncertainty, anxiety
    • Fear of losing out starts to take hold.
    • When you don’t have a well-defined trading plan that caters for all scenarios, or if you don’t believe in your trading plan, you will face indecision and anxiety.
  4. Resignation
    • I  accepting that I can no longer enter in the direction of the trend.

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12 Reflections on Life and Markets

I’ve never seen a trader succeed whose explicit or implicit goal was to not lose. The trader who trades to not lose is like the person who lives to avoid death: both become spiritual hypochondriacs.

No union was ever destroyed by a failure of romance. It is the loss of respect, not love, which ends a relationship.

Love, once present, never dies. It must be killed.

Sometimes we select markets–and trading styles–much as we choose romantic partners: by their ability to validate our deepest-held images of ourselves. Our choices generally succeed, for better or for worse.

Many a trader fears boredom more than loss, thereby experiencing the two in sequence.

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1+14 Mental Behavior of Traders

  1. Boredom: The trader wants some “action” so they put on a trade. Trades are for when entry signals are hit not to alleviate boredom.

  2. Pessimism: The trader starts to have a negative attitude about losing money. Be positive if you are learning form losses becasue you are paying tuition for this education.
  3. Frustration: Frustration comes from expectations not being met. Don’t focus on your P& L, focus on executing your trading plan.
  4. Overwhelm: Focus and simplicity are the keys to profits, complexity and lots of information are the road to be overwhelmed and unprofitable.
  5. Disappointment: Disappointment should not come from losing trades, disappointment should only come because of a lack of discipline in trading your plan.
  6. Doubt:Only trade a system AFTER you have thoroughly researched, back tested, or studied it in real time. Trade only with proven faith in a system, naive hope quickly leads to doubt and failure. (more…)

Inside the Mind

When I impulsively take the first type of countertrend trades (i.e. missed a good trend), here’s what is going through my mind:

  1. Woah, the move has already gone quite a distance.
  2. Sigh, I should’ve taken that entry earlier. I shouldn’t have followed my trading plan so strictly.
  3. Should I get in now? No, I cannot get in any more, I cannot chase the market, it’s too risky, I have no logical stop nearby, you don’t know when it might reverse down quickly.
  4. I have already missed the move. I need to wait to enter in the opposite direction when the trend ends.
  5. The trend has gone too far, it must turn soon
  6. Look! There’s a bit of resistance, the trend is about to turn, go short! (for an uptrend)

And the countertrend trade is made! Below are what I think are the psychological process at work: (more…)

Apply Will Power in Trading

Much of successful trading has to do with having the discipline, the willpower, to follow the trading plan. And much of a good trading plan goes counter to a human’s natural reactions to the market. Hence the greater your willpower, i.e. the better you are able to have self-control or self-regulation, the better your trading.

Below are some key points from the article and Roy Baumeister’s YouTube videos, and my thoughts on how they apply to trading.

The Nature of Willpower

  • Willpower is a limited resource that gets depleted when you use it.
    • I typically find that my trading at the early part of the session is good. I would follow my trading plan well and profits usually follows. However towards the later part of the morning, I start to make mistakes and go counter to my trading plan, that’s when my results suffer.
    • Be aware of when you have run out of juice. I find that once I start make a few consecutive trades that violate my trading plan, I recognize that my willpower has been depleted, I am not making good decisions, so I go take a break, or stop trading for the day entirely.
    • Some traders recommend not trading for more than 3 hours a day. Yes you may miss a run away market after you stop trading, but recall your experiences when the market trended very well the entire day but yet you lost money. To extract money from the marketsrequires willpower to make the right trading decisions. When you are not able to follow your trading plan, the probabilities favor you giving money to the markets instead, regardless of the market situation.
  • When your willpower is depleted, you feel your emotions more intensely (more…)

Ten Trading Terms Used By Technical Analysts -Sound Like Sex Acts

In no particular order….

  • Blowoff Top
  • Bottom Bounce
  • Shorting Against The Box
  • The Piledriver 
  • Inverse Hammer
  • Kissing The Trendline
  • Rolling A Position Forward
  • Getting “Cramered”
  • Churning
  • Spread Trading

Above Terms u had Read many times written by Technical Analysts & Blue Channels Anchors + Analysts

What's The Price of Your Dreams ? MAKE THE GAME WINNABLE

  • “There is only one thing that makes a dream impossible to achieve: the fear of failure.”  -Paulo Coelho
  • You win by living on your own terms–as well and as fully as you can, for as long as you can.
  • If you’re chasing someone else’s goal, you always lose.
  • Most people overestimate what they can do in a year, and they massively underestimate what they can accomplish in a decade or two.

Improve Cognitive Performance-3 Simple Steps

Here are three simple practices that can improve alertness, concentration, and overall cognitive performance:

1)  Hydration – Thanks to Henry Carstens for pointing this one out.  A lack of proper hydration has been found to negatively impact mood among women and decrease alertness and concentration among men.  A wide range of studies link dehydration to declines in short-term memory, concentration, alertness, visuomotor tracking, motor skills, and computational performance.  Water is essential for feeding the brain.


2)  Power Naps – Sleep is a restorative.  Although sleeping on the job has a negative connotation, research finds that power naps improve creativity, memory, energy level, and general cognitive functioning.  Naps also improve decision-making and problem-solving, with naps of different lengths offering different benefits.  A 20-30 minute nap is ideal for improving alertness.    

3)  Moving Around – Prolonged sitting carries a number of health risks.  Standing at the desk for a portion of the day can also increase energy and improve mood.  Exercise during the day improves sleep quality, energy level, and mood.


So what does that tell us?  The traditional way of working as a trader–sitting at the desk all day, hunched over and focused on screens, guzzling coffee and soda–is bad for our cognitive performance and bad for our health.  If you’re a world-class athlete, you will do everything possible to maintain your body in peak condition.  If you’re a world-class trader, keeping your brain in peak condition is equally important.  It makes little sense to spend time looking for more and better trade setups when our minds are poorly maintained to act upon those.

The Good Psychopath’s Guide to Success-Dutton & McNab :Book Review

the goodAccording to a controversial 2011 study by researchers at the University of St. Gallen, traders are more reckless and more manipulative than psychopaths. The traders in the study were intent on getting more than their opponents; in fact, “they spent a lot of energy trying to damage their opponents.” They behaved as though their neighbor had the same car, “and they took after it with a baseball bat so they could look better themselves.”

I suppose Kevin Dutton and Andy McNab would characterize these traders as bad psychopaths. They possess some character traits that could propel them to great profits, but if left unchecked these traits may lead to financial implosion instead.

The Good Psychopath’s Guide to Success: How to use your inner psychopath to get the most out of life (Apostrophe Books, 2014) is co-authored by a (good) psychopath and a psychologist. McNab is an SAS (British Special Air Service) legend who, as he himself claims, is “considered to be one of the top thirty writers of all time”—I assume by someone whose education was tragically cut short. Dutton, a research fellow at Oxford, has spent a lifetime studying psychopaths. The book, reflecting the penchants of the authors, illustrates self-help principles with rough and tumble adventure tales.

A psychopath has a distinct subset of personality characteristics, including ruthlessness, fearlessness, impulsivity, self-confidence, focus, coolness under pressure, mental toughness, charm, charisma, reduced empathy, and a lack of conscience. Depending on how these traits are dialed up, down, or omitted, the psychopath can be either good or bad.

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Apollo Robbins: The art of misdirection (Mind Blowing Video )

Pickpocketing is a triumph of craft: a distracting touch with one hand, while the other hand gets to work, and the next thing you know … where’s my wallet? Apollo Robbins is a modern master of picking pockets, possessor of a subtle understanding of human attention, a taste for classic crime, and something he calls “grift sense” — which, as he told the New Yorker , is “stepping outside yourself and seeing through the other person’s eyes, thinking through the other person’s mind, but it’s happening on a subconscious level.”
 
Robbins makes a living as an entertainer, speaker and television personality, and he also is the founder of Whizmob Inc., a collective of misdirection experts — including reformed criminals — that schools military and law enforcement leaders in fraud and scam tactics. Robbins has also collaborated with academics in his quest to understand how awareness and attention can be manipulated. He’s co-author of a 2011 paper that explores something he noticed in his countless hours of practice: people’s eyes are more easily misdirected to follow a curve than a straight line. (more…)