Aliassmith Psychology 101 and other stuff

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aliassmith
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Postby aliassmith » Thu Feb 10, 2011 2:47 pm

Was going to post this in dchappy's thread, but I'll do it here.

Question to think about :idea:

What has been the biggest factor in your trading that caused you to lose
the most?

I find personally that GREED was my biggest demon. I always kept thinking
to myself that price will keep going my direction some more. The thing is it
didn't keep going most of the time. I would be up 30 pips and then take a
loss. :oops:

I guess I should wrap this up with the "art" of taking profit is as important
or more important than the "science" of entry and greed can distract you
if you continue to woulda, shoulda, coulda.
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1992 DREAM TEAM
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Postby 1992 DREAM TEAM » Thu Feb 10, 2011 9:38 pm

aliassmith -

I am new to trading and this forum. While I don't have a lot of experience losing money trading (nor winning), I do know a thing or two about losing money playing poker! GREED was not the problem as much as IGNORANCE. In fact, greed is probably a good thing (in accomplishing the goal) because it's motivational. When I'm in a situation and I keep pushing even though I know I'm unlikely to come out ahead in the end, it's not the greed that's the problem, it's the ignorance (and most of the time, willful ignorance) of past experience. Greed is easily balanced if you can maintain perspective.

The fact that you can even get out when you know you are ahead makes me want to laugh and cry at the same time. I spent the last 4 years playing cards for a living and if you want to think about sitting in front of a screen all day, imagine playing a couple thousand hands a day on 8 tables at the same time trying to eek out a few big blinds every hundred hands! Not only that but you spend all your time waiting for nubs to show up and basically break even (or worse) against other regulars. The fact that the player pool is so small at the upper levels is what drove me to trading. But I digress...

IGNORANCE is the real demon! Keep your fire under control, don't put it out.

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Sandra
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Postby Sandra » Fri Feb 11, 2011 12:27 am

im with ya on this one alias,

that was my problem.....when i backtracked and looked at my trade...i realized my entries were not the problem....example.....last month..my success rate was 87 percent...but i only won on 32 percent of my trades....

taking profit and not giving it back is the key....be proud of closing a trade in the green....even if its one pip!


This month im at a 88 percent success rate with a 81 win percent....i am up 70.3 percent on my account!

I will never give back profit again!!!!!

Keep trying you will get it, and your not the only one out there that just has this last hurdle to cover..... alot of methods work in trading....money management is the Holy GRail!!!!!!

Sandra

aliassmith
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Postby aliassmith » Fri Feb 11, 2011 2:27 pm

1992 DREAM TEAM wrote:aliassmith -

I am new to trading and this forum. While I don't have a lot of experience losing money trading (nor winning), I do know a thing or two about losing money playing poker! GREED was not the problem as much as IGNORANCE. In fact, greed is probably a good thing (in accomplishing the goal) because it's motivational. When I'm in a situation and I keep pushing even though I know I'm unlikely to come out ahead in the end, it's not the greed that's the problem, it's the ignorance (and most of the time, willful ignorance) of past experience. Greed is easily balanced if you can maintain perspective.

The fact that you can even get out when you know you are ahead makes me want to laugh and cry at the same time. I spent the last 4 years playing cards for a living and if you want to think about sitting in front of a screen all day, imagine playing a couple thousand hands a day on 8 tables at the same time trying to eek out a few big blinds every hundred hands! Not only that but you spend all your time waiting for nubs to show up and basically break even (or worse) against other regulars. The fact that the player pool is so small at the upper levels is what drove me to trading. But I digress...

IGNORANCE is the real demon! Keep your fire under control, don't put it out.


So you think it is more about ignorance? If I know what I am doing but
refuse to take my money and run, it doesn't seem like ignorance fits
the bill. I stayed in because I "wanted" more not because I "expected"
more.
Trade Your Way as Long as It Makes Money!

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Postby aliassmith » Fri Feb 11, 2011 2:31 pm

Sandra wrote:im with ya on this one alias,

that was my problem.....when i backtracked and looked at my trade...i realized my entries were not the problem....example.....last month..my success rate was 87 percent...but i only won on 32 percent of my trades....

taking profit and not giving it back is the key....be proud of closing a trade in the green....even if its one pip!


This month im at a 88 percent success rate with a 81 win percent....i am up 70.3 percent on my account!

I will never give back profit again!!!!!

Keep trying you will get it, and your not the only one out there that just has this last hurdle to cover..... alot of methods work in trading....money management is the Holy GRail!!!!!!

Sandra


So what do you mean by success rate vs. win percent? I would think they
would be the same. Nice on that 70% gain. :D
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Postby Sandra » Fri Feb 11, 2011 5:19 pm

Hey Aliass,

By success rate I mean, that they were successfull entries with some profit...
My mind switches over to percents when I look at actual gains and losses...
So yes your right they are the same...just my line of thinking...I split into two parts....
1 getting the successfull percents on entries....
2 getting the money in the bank as percents....

I got tired of looking at succesfull entries turn into losing trades...


Sandra :P

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Postby aliassmith » Sat Feb 12, 2011 3:19 pm

Sandra wrote:Hey Aliass,

By success rate I mean, that they were successfull entries with some profit...
My mind switches over to percents when I look at actual gains and losses...
So yes your right they are the same...just my line of thinking...I split into two parts....
1 getting the successfull percents on entries....
2 getting the money in the bank as percents....

I got tired of looking at succesfull entries turn into losing trades...


Sandra :P


Ok I see what you are looking at. I basically go "my account grew by x%".
That is the only measure I currently use. My risk is based on my equity and my gains are based on my equity also. Although I have done calculus I
prefer to keep it simple. 8)
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Postby 1992 DREAM TEAM » Sun Feb 13, 2011 7:53 am

aliassmith wrote:So you think it is more about ignorance? If I know what I am doing but
refuse to take my money and run, it doesn't seem like ignorance fits
the bill. I stayed in because I "wanted" more not because I "expected"
more.


Hi alias -

I should have asked first, what does greed mean to you? When you found yourself thinking that price would keep moving with you, did you know that you were being greedy at the time?

I am saying that if I know I am being too greedy then I can either ignore the fact that I am too greedy and be doomed to repeat my mistake over and over again, or I could become less ignorant (or more aware, same thing), realize that being greedy is -EV, and make the appropriate correction. For me, it would be easier to use greed as a signal to watch out than try to suppress it entirely. But if I am being greedy without knowing it, then is that even really greed or just inexperience?

So whatever the mistake is, whether it be greed, fear, lack of experience, unexplainable irrational decisions, the faster I become less ignorant of my mistakes, the faster I correct them. I guess that is common sense but that is what I focus on to refine my decision making.

I guess if you are talking about greed like simply "I want more" then a rational mind will take the choice that pays off most efficiently. But if greed is a conscious effort to deny discipline, past experience, or even statistical data then it's really just ignoring better judgement.

IMHO all problems stem from some level of ignorance. So the goal is to be aware. Like I said, I don't know much about trading, so none of this may be relevant.

In terms of exits, it seems to me that it would be best to eliminate emotion from the equation entirely and just stick to a gameplan like TRO outlined somewhere in the rat threads.

I just hope I am on the right track LOL!

Thanks for the thought-provoking post.

:D

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Postby aliassmith » Sun Feb 13, 2011 6:47 pm

1992 DREAM TEAM wrote:
aliassmith wrote:So you think it is more about ignorance? If I know what I am doing but
refuse to take my money and run, it doesn't seem like ignorance fits
the bill. I stayed in because I "wanted" more not because I "expected"
more.


Hi alias -

I should have asked first, what does greed mean to you? When you found yourself thinking that price would keep moving with you, did you know that you were being greedy at the time?

I am saying that if I know I am being too greedy then I can either ignore the fact that I am too greedy and be doomed to repeat my mistake over and over again, or I could become less ignorant (or more aware, same thing), realize that being greedy is -EV, and make the appropriate correction. For me, it would be easier to use greed as a signal to watch out than try to suppress it entirely. But if I am being greedy without knowing it, then is that even really greed or just inexperience?

So whatever the mistake is, whether it be greed, fear, lack of experience, unexplainable irrational decisions, the faster I become less ignorant of my mistakes, the faster I correct them. I guess that is common sense but that is what I focus on to refine my decision making.

I guess if you are talking about greed like simply "I want more" then a rational mind will take the choice that pays off most efficiently. But if greed is a conscious effort to deny discipline, past experience, or even statistical data then it's really just ignoring better judgement.

IMHO all problems stem from some level of ignorance. So the goal is to be aware. Like I said, I don't know much about trading, so none of this may be relevant.

In terms of exits, it seems to me that it would be best to eliminate emotion from the equation entirely and just stick to a gameplan like TRO outlined somewhere in the rat threads.

I just hope I am on the right track LOL!

Thanks for the thought-provoking post.

:D


Just so you know I am not trying to attack/flame you, sometimes written
words can come across as such.

Ignorance:
1. lack of knowledge: lack of knowledge or education
2. unawareness: unawareness of something, often of something important

I put that definition so you understand where my belief system comes
from.

I believe the difference you and I have is you believe that the rational
mind will beat out emotion. I think it can of course, but without
conditioning, emotions can and will trump rationality.

"it would be best to eliminate emotion from the equation entirely" I agree
although this is a matter of conditioning.

Many people look for work-a-rounds to over come emotions. For example
"I"ll set this SL and TP and put myself in hand cuffs so I can't change
anything".

When I was a boy learning to ride a bike I was afraid of falling off and
getting hurt. I am confident that this is many people's experience. I could
not learn to overcome my emotion without riding the bike a few feet at a
time. Maybe actually falling off the bike and getting back on again. I
adapted as a human.

My point is I prefer to adapt to my emotional restraints and look at my
account balance all the time. I listen to my sub-conscience when it is time
to reduce risk. Emotions can be conditioned a small step at a time.

Anyway I am sharing "my" beliefs in hopes it will help others and of course
we all don't see things the same. :)
Trade Your Way as Long as It Makes Money!

aliassmith
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Postby aliassmith » Sun Feb 13, 2011 6:54 pm

I received this question in a PM. I figured I would answer it here as it
may help others.

You often us the terms "order stack" and "order stack areas". Can you define what you mean by this?

An order stack area is where I believe orders are bunched up and will
cause price to reverse. If you study many types of trades and how people
place and adjust their stop loss/entry orders you can get an edge from
this information.
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