Zen and the Art of Poker

[DbPhoenix]

RULE #19: Make sure you know when you're on a cold streak... You’re not aware of your condition. You’re not stepping back from it and seeing it -- and, more important, not acting on this information. As a result, as cold as you are, you often find yourself right back in there on the next hand, fighting, struggling, betting...

You need to be two people-- one is the guy who is doing it, and the second is the guy who steps back and watches the other guy from a slight distance and evaluates whether the first guy is too tired, too upset, too unfocused, too much on tilt, etc, to be sitting at the poker table, trading, or whatever. Most important, this second guy must have the AUTHORITY to pull the first guy out of the chair if he doesn't like what he sees. (William)

The first step in the process of creating consistency is to start noticing what you’re thinking, saying, and doing. Why? Because everything we think, say, or do as a trader contributes to and therefore reinforces some belief in our mental system. Because the process of becoming consistent is psychological in nature, it shouldn’t come as a surprise that you’ll have to start paying attention to your various psychological processes.

The idea is eventually to learn to become an objective observer of your own thoughts, words, and deeds. Your first line of defense against committing a trading error is to catch yourself thinking about it. Of course, the last line of defense is to catch yourself in the act. If you don’t commit yourself to becoming an observer to these processes, your realizations will always come after the experience, usually when you are in a state of deep regret and frustration. (Mark Douglas)

[zdo]

	Quote:	DbPhoenix;34551[I
	]... Because the process of becoming consistent is psychological in nature, it shouldn’t come as a surprise that you’ll have to start paying attention to your various psychological processes. "The idea is eventually to learn to become an objective observer of your own thoughts, words, and deeds... If you don’t commit yourself to becoming an observer to these processes, your realizations will always come after the experience, usually when you are in a state of deep regret and frustration. [/i]"(Mark Douglas)

An excellent ‘rationale’ for practicing real time vipassana

[DbPhoenix]

	Quote:	zdo
	Zen and Art of Poker Ipersonally am starting to question even this neutral level of 'learning from mistakes'...

Depends partly on whether or not the trader has accepted the fact of loss, regardless of how well he follows his plan, assuming that that plan is based on a consistently profitable strategy. If it isn't, and he doesn't, and he hasn't, then he isn't going to learn much if anything from his mistakes.

	Quote:
	"... poker players [traders] sometimes ask, “What do you do in this particular situation?” There is really no correct answer to that question because it is the wrong question… The right question is: “What do you consider in this particular situation before determining what to do?” – David Sklansky, ‘The Theory of Poker’ So good before the fact journaling is 'what is being considered in this particular situation before determining what to do?" and good after the fact journaling is 'what else could have been considered to improve that trade and its management?' etc (PS Thanks to idax and dbP for the digests of these books)

This is why I like Wyckoff's approach: gathering data, weighing the evidence, making the best decision one can based on that evidence, understanding that things don't always work out the way they're "supposed" to, regardless of how diligent one is. T

[zdo]

db Thanks for keeping us all inside the normal box

[crabbydog]

	Quote:	zeon
	That wasn't really my question and your reply sounds more like a personal attack than anything else... Ofcourse I know that 14 losing trades in a row isn't "normal", which I why I stopped trading.

Depending on the kind of trading you do 14 losers in a row may well be quite possible in a profitable system. If you have say 30% winners and you make 4 points in each winer and 1 on each loser you will have a nicely profitable system (many trend following systems work much like this) but the losing runs could easily reach 14 or more and a drawdown of 50% or more is also quite possible.

If you have analysed your trading approach thoroughly in advance you would know this and be prepared for it mentally an duse money management to keep profitable and keep drawdowns acceptable to you.

[traderpsyches]

	Quote:	DbPhoenix
	[b]RULE #19: Make sure you know when you're on a cold streak... Y The idea is eventually to learn to become an objective observer of your own thoughts, words, and deeds. Your first line of defense against committing a trading error is to catch yourself thinking about it. Of course, the last line of defense is to catch yourself in the act. If you don’t commit yourself to becoming an observer to these processes, your realizations will always come after the experience, usually when you are in a state of deep regret and frustration. (Mark Douglas) [/i]

This is great stuff - the only thing I would add is to become an objective observer of what feelings you have - ... because they are there - underlying the thinking and the doing. By bringing the feelings to the surface, it become much easier to interrupt their ability to drive the auto-trade which is really a function of acting out a feeling rather than noticing it. ..jmho.