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Can't teach old...

Can't teach old dogs new tricks

5/2/2007 11:02:15 AM

BrianTran

155 posts

Can't teach old dogs new tricks

One problem about learning to become successful in forex requires endless changes to oneself. Not only about money management tactics, conscious with savings and spending, about risk-taking such as to make $2 one has risk something, and of course one's mental and psychological reorganization.

We're talking about kick habits that are lethal to trading and adopt new ones to become successful. What are they? Patience is first one. We live in the world where everything is now instant: instant coffee, dinner, delivery, etc. And it gets worse. This is a trap in trading, impatience lead to overtrading because we cannot wait for the signal to come to us but we have to "take action" right now. This leads to one loss, then another, then another.

Another "bad" habit is the money counting. Every nickel and dime we make we're counting in our head. Every nickel and dime we're losing is running through our head. So better to make that dime than lose it. We close out good positions and let the bads ones continue. Trading is about letting the good positions become better positions and let the bad NOT become worse. Ask any experienced and profitable trader where the real meat of the profits come from.

There are countless other habits. We'll go through them throughout this thread.

The sum is greater than its parts.

5/3/2007 9:04:40 AM

BrianTran

155 posts

Re: Can't teach old dogs new tricks

This need to be in control - To all the executives, managers, directors, and entrepreneurs who leave behind their former professions and way of working and take on trading, it's a slap in the face. Making informed decisions on what strategy to execute, which is what trading is. Managing and running a company and employees to the way you want and simulate that into trading, a disaster.

Control has two parts: those you can control and those you cannot control. If they understand between these two points, it wold be an easier transition.

Areas you can control such as how much to risk and how to lose, as well as when to participate in the market and when not. We can control what strategy to choose to use, and control what tools and instruments we choose to participate. These are choices we can control. But that control ends there because once the positions are taken, the market takes over. This is the point of control where many people cannot cope with. The control of the market or expecting the market to behave to our strategy can be difficult to manage. So it's a slap in the face when we have to deal with a loss because we control the market to do what we wanted.

Learning to let go of what cannot be control can release us from the frustration and anxiety that haunts many traders. Reducing stress and emotion can prompt the trader to make better judgment and follow the trading plan better. This is a habit that much to adopted and assimilated with practice and patience.

The sum is greater than its parts.

5/4/2007 7:58:38 AM

BrianTran

155 posts

Re: Can't teach old dogs new tricks

Cannot admit to be wrong -- It's not a common trait but the ego does play this trick in everyday life. Bringing this habit to trading with an attitude that you know better than most and you're right because you've been proven in the past. In trading, this is just one opinion, ONE, against many you may have a different opinion, en masse. Admit wrong-doing is difficult, but a mature sign as an human adult. This trait is blessed by the market because admit wrong-doing can immediately alleviate your problem with taking a loss quickly and move on the next trade.

When one wants to be right, he would wait for the market to prove him right, so he let the market take his trade to the cleaners while the anguish and stress cut him up on the inside. Being right hurts. This habit many times are stronger than the habit of wanting to make money.

Being in a relationship is difficult because one has to give and take, compromise, and admit being wrong when the evidence is obvious. The relationship with the market is no different. It gives and takes and you will have a healthier relationship when you admit when it's so and make up and move on.

The sum is greater than its parts.

5/9/2007 10:59:20 AM

BrianTran

155 posts

Re: Can't teach old dogs new tricks

An absolutist's view of the market - This attitude and behavior brings almost bi-polar (not clinically speaking but in the milder sense) position where the emotions and perspective move from one extreme to the other. This may derive from either perfectionism or inability to adapt. He either feels he's the best trader in the world or the worst trader in the world; the markets loves him or hates; he's an outstanding winner or a complete loser. There is no middle ground.

This attitude results in the violent swing in gains and losses in the equity performance. An absolute negative attitude would bring further drawdowns while a positive attitude (feeling of invincibility) will also take him from periods to sustained gains to drawdowns.

The only remedy is to steady the emotions and attitude. Although they will never go away, they can be subdued and be kept under control. That is, if either attitude resurfaces, the mind must stop and redirect attention to the market and not at the attitude. These attitudes will distort reality on how the market looks. Exaggerated confidence can put a trade against the trend and thinking the market will turn his way to because he's optimistic that the market will do so. Not so. Viewing the market from a neutral perception is already difficult but adding in other attitudes and emotions can be devastating. Change that and the trader will have a better idea where profits should be coming from.

The sum is greater than its parts.

5/10/2007 12:44:04 PM

BrianTran

155 posts

Re: Can't teach old dogs new tricks

Self-destruct -- cycle of negativism. When things go wrong, we start blaming ourselves and name-calling ourselves that we would be insulted if another person name-calling us but why don't we get insulted when we name-calling ourselves? Self-sabotage starts when we didn't expect the outcome of an event or situation. We lost control of the outcome, such as our favorite team losing the game, a loss of a job or potential client to a rival company.

What do we do? Some people blame externally the situations that caused the outcome while others blame themselves for not being prepared enough, not competent enough. But there others that sum up their entire being from this single outcome by calling ourselves "losers." This all-or-nothing attitude transforms into a self-destruct mode and trading with it guarantees a loss after loss.

To turn that around, redirect that attitude in a different. One loss cannot mean the person is a loser. Rationalize the thought process to orient the emotions. Stop trading until that attitude is reduced or changed. Next time, a setup comes along, direct the new attitude and the acceptance of a loss should ease the conflict and self-destruct mode. Right attitude brings a winning attitude that brings to seeing the right setups and not take precarious impulsive setups.

The sum is greater than its parts.

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