Brett Steenbarger

psychology is the key to success in trading. are you match tough?

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Quantus
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Brett Steenbarger

Postby Quantus » Fri Jun 02, 2006 10:25 pm

Hello,

personally, I do like the book "The Psychology of Trading: Tools and Techniques for Minding the Markets (Wiley Trading Series)", and I'm already looking forward to his new book "Enhancing Trader Performance: Proven Strategies From the Cutting Edge of Trading Psychology", which should appear in November.

Mr. Steenbarger has a webside: www.brettsteenbarger.com

Maybe it's useful to anybody else in the forum.. :)

Greetings,

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michal.kreslik
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Postby michal.kreslik » Fri Jun 02, 2006 10:44 pm

Thanks for the suggestion, Quantus. I will soon be adding a section on recommended literature here, so maybe I will include this book in the list.

I found this book on amazon.

I know first hand that even with the best trading systems you need to be well prepared for the real trading psychologically as well. Having the top-notch technical skills is only a part of the game.

The most crucial psychological skill of all successful traders is undoubtedly an iron-clad discipline.

Michal

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Postby Quantus » Sat Jun 03, 2006 10:17 am

Hello Michal,

I do agree, as most traders prob. will, concerning your statement about discipline.

But I would say, what is maybe even more important: Finding the truth, an honestly statement for yourself - why do you (like to) trade?

Of course most would answer: to earn money. But is this true?
All people are looking for happiness in their life - and what makes people happy could be and very often is totally different. So, trading could be a compensation or area for excitement, emotional ups and downs some are addicited to, social acceptance if you are profitable and can afford many material things, a piece of material independency, social status, money as love compensation, building an illusion of security in life, interesting field of research for the mind (or sometimes just for the ego).. many different reasons. Often it's a mixture, and I guess it could be most helpful if - beside disciplined work - traders have fun and/or really like this "game"/job/art. - For some it could be easier to find happiness with different approaches, if they find out that it's not really trading what they want but..

If there is a straigth focus, not trading as compensation, but loving what you are doing, and staying relaxed most of the time (which partly could be the result of sound testing your methods and systems - to get faith in your approach and in yourself).. hopefully this results in enjoying a profitable trading career. :-)

Enjoy trading!

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Postby michal.kreslik » Sat Jun 03, 2006 2:46 pm

Quantus,

for me a definition of successful trading is:

boring business.

If you feel high when trading and you start to look like this whenever you place a trade:

Dolar_Smile

then you're not a professional (and thus, neither successful) trader, but rather a high-tech gambler :)

Michal

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Postby Quantus » Sat Jun 03, 2006 3:26 pm

Michal,

hm.. business: Yes.. but boring :?:

I think there's a difference between a calm, peaceful state of mind and boredom. But I agree with you, as mentioned before: one has to make sure before trading, that it's not for the emotional ups and downs. The opposite is much more helpful - and gives you a chance to stay long enough in the market(s) to learn as much as possible, hopefully earning money then.. 8)

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Postby bearwatch » Thu Jun 08, 2006 9:23 pm

I think my only high is seeing your trading plan working in the market and the market working your trading plan! Money is an after-thought. Just funny to see how things click together when everyone else sees it as chaos, that's the real high.

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Postby BlowFish » Mon Aug 28, 2006 7:08 pm

Quantas, I think you have a good point there for me its not just about money. I know i have attached way to much importance to succeeding at trading. It certainly has made things far harder for me.

On the subject of books one I really like is :-

Financial Risk Taking: An Introduction to the Psychology of Trading and Behavioral Finance by Mike Elvin. Sounds a high brow, its not. It deals with the psychology of trading in a very practical way. He emphasizes discipline and how to achieve that with a sound trading plan. It covers a lot including self sabotaging behavior.

Another favorite is Zen in the markets: Or confessions of a Zen trader by Edward Allen Toppel. His main argument is that it is ego that screws most of us over. He goes on to suggest simply buying when the market is going up and selling when it goes down using a simple 'switch'. By using this approach he believes you can get ego out of the equation. The book seems to have a lot of synergy with what TRO is doing here, the middle line is really a simple switch.

Cheers,
Nick.

P.S. Bretts book along with the Douglas books are very good too :-)

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Postby michal.kreslik » Mon Aug 28, 2006 8:33 pm

My personal experience is that the more hot-blooded I am when placing a trade, the higher the probability that the trade will go astray.

A commonplace, placid and serene trading yields the best results in the long run for me. Thorough backtesting and statistical assessment before placing even a single trade helps me to achieve such a calmness.

Michal Kreslik

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Postby adaseb » Thu Oct 28, 2010 10:48 am

Man this is an old thread.

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