How best to fight the mental game...

[walterw 10]

Have a wonderful weekend, All! I am going to take some time off this weekend to do an aerobics benefit. It will calm me, clear my mind and hopefully raise money for a good cause. Please take care, and try to do something wonderful for yourself and for someone you love. Time is all we really have.

 

Namaste

 

Janice

 

Good Doc enjoy ¡¡ I will try to disconect myself too... cheers Walter.

[PYenner 10]

Thanks Doc and Walter.

 

Watched my brother overwork, he is still on Prozac 7 years later.

Came close to doing the same but stopped short of Prozac.

Watching a cousin do the same thing, risk trading off health to achieve goals.

Few understand what they stand to lose, by the time they learn its a bit late.

 

Yes, addictive nature, true.

Only a deliberate persistent intervention might succeed.

It does need to go on the list sooner rather than later.

 

Thanks for the wishes.

Regards

[torero 10]

Thanks Torero

Yes, I made things worse by demo trading on a $100K demo account which is a breeze compared to a startup account.

.....

 

The size of the stake has a lot to do with it.

I am comfortable with a certain level of risk or gambling, but as the stakes get higher there comes a struggle with risk aversion.

The strangest thing of all is that when I do take some damage it bothers me less, I can sleep like a baby afterwards, weird!!

 

This is the reason why demo accounts can't be real. You have to recreate the demo account as exactly real as possible, the same stake as you would start out in the real world. The more real you make it, the more seriously you can take it and imagine yourself more in that trading.

 

I think the 2nd part about sleeping better with big damage is most likely denial and not owning up the loss. Now acknowledging it will recreate these same losses/damage account.

[PYenner 10]

Torero

 

The mistakes were ones I have made before and partly continue to make.

The denial is more in continuing to trade without fixing them all.

They will repeat until they are fixed.

 

On the large account I could avoid losses by trading with the trend and letting a trade go into drawdown until the trend rescued it. It didn't stop me trading.

 

On a small account drawdown is paralysing, it is better to take the loss sooner so you can continue trading. Of course if you call the trend wrong and allow drawdown, that is double trouble. If you overtrade that is triple trouble, so guess what I did... yeh all three at once. The only thing I did right was close out at the mental (well chosen term) limit. Yeh, the price came back 50 pips the next morning too, rats.

 

A bunch of sadly familiar mistakes, the temptation to overtrade looks to be the most persistent denial. Go to so much trouble to analyse the market to reduce the gamble and then introduce gambles of my own making.

 

On the loss of equity, I was both fearful and determined.

I have tried to trade back blown demo accounts and know it is close to impossible. Nerves took the equity down to 60% before it came up again.

 

At that level it was serious but not desperate.

 

I think the reason I could sleep was that I recognized that stupid mistakes had caused the damage, not bad luck. Mistakes can be learned from.

Blaming luck would be a greater denial.

 

Overtrading should be less tempting as the equity becomes more comfortable. Less stress, less temptation. Less temptation, less stress.

 

It has been a full on 6 month battle against the forex learning curve to get this far. To me a 5k account is not a comfortable equity, 15k has been my initial target. The platform from which to approach the future.

[PYenner 10]

Doc

 

Some comments on an earlier post, then I will try to have less to say.

 

A Type Personalities and the markets-

The over-achievers may be drawn to the markets, challenge, reward, risk, ego validation, its all there for the adventurer. Just the cocktail they go for, make it a double, no, gimme the bottle. The markets are certainly not a place for the faint hearted.

 

Superwoman hits the wall-

With hitting a wall there is a loss of abilities or options in the sense that you have to treat some areas as no-go zones for your own protection.

With falling down a hole there can be a loss of dreams, the gut felt ones that are near the core of a person. Those can take decades to replace and then only with watered down versions in comparison.

 

In both cases perspectives are gained that few have, but at a hell of a price.

 

The brilliant thing about your dream is that it has a double reward system built into it. A fuller reward than the rest of us can take from the markets.

Well done, the constructive dreams are the hardest to find and pursue, but they are the only ones that really count for much.

 

Some quotes from Eleanor Roosevelt-

 

A woman is like a tea bag- you never know how strong she is until she gets in hot water.

 

Do what you feel in your heart to be right - for you'll be criticized anyway. You'll be damned if you do, and damned if you don't.

 

Great minds discuss ideas; Average minds discuss events; Small minds discuss people.

[thetradingdoctor 10]

What great posts! Thank you for sharing!

 

I believe that traders are "called" to trading. There is something about it that is haunting and daunting. Yes- there is certainly the element of Type A, as well as obsessive compulsive ( addictive) involved. The flashing lights and blinking signals, etc can be mesmerizing and hit right at the so-called "reward" areas of the brain which produce dopamine. THere is no legal substance as rewarding as money, so that plays into it as well.

 

Hitting the wall- Every great trader hits the wall. If you haven't hit the wall, you are not really in the game. It is what you do with what happens when you hit it that matters. Some don't even though that they have hit it and continue in denial. Others are so beaten down and defeated that they either turn to more self-destructive behaviors ( as if the markets are not punishing enough!) or crawl away in defeat and self- loathing and despair. Others manage to reconstitute themselves, step away, get it together and come back fighting.

 

Life and trading are never about what happens. They are always about how we handle what happens.

 

Thanks!

 

Janice

[PYenner 10]

There is no legal substance as rewarding as money.

 

Whoa, dopamine is pretty damn good too, and its untaxed

[thetradingdoctor 10]

Money is rewarding because thoughts of receiving money release dopamine ( and likely other chemicals). We have no evidence that thoughts of receiving dopamine release dopamine.

[walterw 10]

Hi Doc : a technicall question here... can dopamine give a sensation of strength... (real one) that gives or puts you on a state of motivation that you can work more hours without feeling worn out ? and a state of optimism ? thanks Walter.

[thetradingdoctor 10]

Yes, Walter. Dopamine is one of the major chemicals that is responsibile for the feeling of being what is called "high." In fact, the street people know about dopamine which is one of the reasons they call some drugs "dope." Cocaine, which produces this sense of power, strength, stay up for hours, etc acts through release of dopamine in the brain. Hope this helps, Walter!

 

Janice

[thetradingdoctor 10]

Yes, Walter. Dopamine is one of the major chemicals that is responsibile for the feeling of being what is called "high." In fact, the street people know about dopamine which is one of the reasons they call some drugs "dope." Cocaine, which produces this sense of power, strength, stay up for hours, etc acts through release of dopamine in the brain. Hope this helps, Walter!

 

Janice

[PYenner 10]

Doc

 

The wellbeing/balanced sensation that comes with meditation is associated with alpha wave brain activity but I cant associate it with any single chemical. Do you know of which chemical or chemicals seem to be beneficially involved? May not be a simple answer.

 

Also depression tends to go with dopamine suppression, or have I got that back to front? I wonder why they dont sell dopamine instead to prozac, I don't trust that stuff, too many suicides when they come off abruptly. Might be better to stick with natural stuff imo.

[thetradingdoctor 10]

Hi Pyenner,

 

There appears to be enhancement of both alpha and gamma brain waves during meditation. The gamma waves are more difficult to see, but experients on experienced meditators ( primarily Buddhist monks- many of whom do little else but meditate) have shown a clear preponderance of gamma brain wave activity.

 

Re: antidepressant medication: The three main brain chemicals which are affected by antidepressant medications ( such as Prozac) are serotonin, epinehprine and monoamine oxidase. There is no antidepressant to my knowledge that affects dopamine selectively. Prozac and most of the newer antidepressant drugs are called selective serotonin uptake inhibitors. This means that they provide excess serotonin by blocking the normal serotonin reuptake at the connection between two nerve cells ( this connection is called a synapse and there are something like 10 quadrillion synapses in the human brain--lots of synapses!). Serotonin is known to be depleted in suicidal and depressive states, thus the use of Prozac-like drugs to treat depression. There are likely thousands of brain chemicals and our knowledge ( despite the decade of the brain and the logarithmic acceleration of technology) is still primitive in this area.

 

Hope this helps!

 

Thanks!

 

Janice

[arifwise 10]

these are all wonderful traders sharing. may all of you be bless with abundance of love, health and money.

 

being grateful with pocketed profit always - feel bless. print out the charts helps and fine tune stop-loss and profit taking. you see your profit taking signals and out you go. live your trading plan and be happy then you live longer as trader

 

What exactly is your psychology?

 

In short, your psychology refers to your emotional responses to a given situation…In trading, fear, greed, vanity, pride, hope, jealousy, denial - all these can affect investment decisions. Although your aim in the market is to maximize your profit and minimize your risk, emotions often make this easier said than done.

 

For example, traders who react emotionally, make the wrong decision – such as the common mistake of holding a losing position in the belief that someday it will become a winner.

 

This classic mistake is called loss aversion. Loss aversion refers to the tendency for people to strongly prefer avoiding losses than acquiring gains. Some studies suggest that losses are as much as twice as psychologically powerful than gains. Loss aversion compels most traders to hold a losing stock while it plummets downward. This clouded judgment clearly contradicts the trading adage “cut your losses.”

 

These investors also engage in other forms of irrational behavior, like attributing success to skill, and losses to bad luck. Worst of all, this is just the tip of the iceberg when talking about the other devastating effects of trading using your emotions.