[DugDug]

welcome aboard the most frustrating, rewarding, disagreeable time of your life Snitzer.

hint number one: - delve in read all you like, explore, go crazy, test, try, win, loose.....but what ever you do ensure that you keep yourself grounded and do what makes sense to you - so long as its grounded in reality - otherwise you can easily get lost in the thrill of learning and searching for ways to dissect and understand the market, as opposed to just listening to it and letting it work for you.

[scg84]

This is one of the best threads I've read. Not enough emphasis has been placed on the pyschology of trading. It makes me interested to study it further.

Myself - overcoming the delusional behaviour. Maybe I should ramp up the anit psychotics!
I'm scared to resign to the fact that I wont suceed hugely and that I cant do it in 6 months... but I'm not the sort of person to quit after 6 months anyway.

Regardless, I think that just stems from the natural instinct to suceed and could also be viewed as a positive in some cases. As long as we try and try again, and improve and learn about ourselves, success is probable.

After I had a big loss, I went back to the drawing board and decided to learn as much as I could and apply it. This week I was trading my over complicated system with not much luck. The entry/exit signals all conflicted, I was convinced that in a trade any resistance to a profit would result in a loss and it turned out quite bad. Talking with a few quys while doing this (traders with years experience) made me think - I'm making this way harder than it is.

So back to the drawing board, this time with a plan that is clear, unambiguous. But most importantly, I realise the importance to follow your plan and trust that its either right or wrong. The only way to know is to trade it with discipline. When I get something that works, I will know.


This thread should be posted in the beginners forum. Its much better than everyone saying - You will loose for years before you make money, with no explanation.

Thanks again for posting this.

[kingfisher3210]

Originally Posted by thetradingdoctor »

So You Think You Can Trade?

Janice Dorn, M.D., Ph.D.

You can have anything you want if you want it desperately enough. You must want it with an exuberance that erupts through the skin and joins the energy that created the world… Martha Graham (1894-1991; fierce, innovative dancer and choreographer)

OK. I fudged the title from the TV sensation du jour: So You Think You Can Dance?

Having been a dancer since age 5, I actually thought I could dance! That was before I watched these amazing young dancers battling it out week after week; one by one, falling down, getting up, getting safe and getting booted. The field continues to narrow until, one day soon, the winner will be chosen. These people have talent, training and experience. So what separates the winners from the losers? Passion. Pure, unbridled passion. That is what separates the winners from the losers in dancing, life and trading.

Why do so many people think they can do something with confidence, courage and competence when they cannot? The so-called overconfidence bias and other heuristic biases are topics for another day. Today, I would like to focus on the Learning Ladder of Trading.

One day, you get up and realize that you are in a dead-end job, and just sick and tired of being sick and tired. Your buddy has been trading the markets for a few years and doing OK…not great...but getting by. Your buddy's buddy just set up a trading account, paid thousands for software, books and courses, but is not making any money. In fact, he has lost half of his initial stake. Yet, you hear others touting returns of 100-1000% gains a year, and the siren call of greed coupled with the idea that if they can do it, you can do it better, is too tempting to resist. I mean, how difficult can it be? You just buy the right books, get the best software, go to the right seminars, subscribe to the hottest newsletter, and--with the click, click of your mouse--buy low and sell high or buy high and sell higher or sell high and buy lower. No problem. Piece of cake.

So, you announce to your family that you are going to quit your job, become a full time trader, monies will flow effortless into your account and everything is going to change. It all seems so easy, and the seminar people are doing it, so why can't you. You are just as intelligent as the next guy.

This type of thinking borders the delusional. Just as one cannot wake up one day and announce that one, without any formal education training (including the school of hard knocks) is going to start practicing law or medicine, one does not become a proficient trader overnight. Get over yourself, because it just isn't going to happen.

No matter how many bells, whistles, indicators, seminars and books with which you surround yourself, you have to pay your dues. You must learn that that piece of cake needs to be converted into humble pie, and that the most-successful traders got that way by first getting a Ph.D. in losses.

Trading is simple, but it is not easy. Trading is a skill and an art that takes time, patience, perseverance and courage. Successful trading and investing are skills, which combine both art and science. In order to achieve and master these skills, one must progress on a path, which is mental, emotional, physical and spiritual. For many, this is the most difficult journey ever taken. Start where you are, and understand that it is about the process, that time takes time and that the rewards are worth it if you just keep going with passion. Without passion, why bother?

There are no secrets to success. It is the result of preparation, hard work, and learning from failure…Colin L. Powell

Every trader must climb the four rungs of the Ladder of Learning, and must do this one step at a time. You cannot skip a step, but if you let your guard down, do not continue to study and practice, you can and will fall down a step or two.

What do I mean by the Ladder of Learning and the four steps? In this case (and putting other learning theories and the neuroanatomical bases for them aside for now) I am referring specifically to the four stages of trading competence:

Somewhere in your make-up, there lies sleeping, the seed of achievement which, if aroused and put into action, would carry you to heights such as you may never have hoped to attain…Napoleon Hill

(1) Unconscious Incompetence: You don't know that you don't know, and you don't know what you don't know, a.k.a. ignorance is bliss.

At this stage of your trading, you are not aware of the existence of, or need for, specific trading skills. You don’t know what you don’t know, including that you have any deficiencies (since you don't know that there are any specific trading skills). Denial may come into play here as well, as you may think that such skills are unnecessary or not useful, and all you have to do is to subscribe to a service or hotline, or jump on the next "hot" pick and money will come rolling into your account. In order to move to the next stage, you most overcome your denial and become consciously aware of your incompetence. Without taking this next step, you will not progress and no new skill will be acquired. There will be no learning. The next step is:


(2) Conscious Incompetence: You know that you don't know, but you are not entirely sure what you don't know.

At this stage, you become aware that trading is a skill, which exists, which is practiced by many and is relevant to your success. You also become aware of your deficiencies in this area by attempting to trade or practicing how to trade. This is the stage in which you begin to figure out how much you don't know. Successful traders will, at some point during this stage of the learning process, make a commitment to learn. They will make a commitment to study, to be teachable and to practice, practice and practice until you know what you don’t know. Now, you are ready to progress to:

(3) Conscious Competence: You know what you know, and you can trade, but you have to think about it.

During this stage, the skill of trading can be performed reliably, consistently and at will. However, you have to concentrate a lot, and think a lot, in order to do it. It is not second nature, nor is it automatic. At this stage, you are open totally to more learning, but you are not able to teach anyone else how to do it. The only way to proceed from this stage to the final stage is to practice more and more until…eureka...one day you have reached the stage of:

(4) Unconscious Competence: You know how to do it, and don't have to think about it. You just do it.

At this stage, the act and process of trading consolidates within the memory and pattern recognition areas of your brain…it becomes second nature. If you are really good at it, you can trade and do other things at the same time (I do not recommend this, however). Certain people at this stage are capable of teaching others, but this is not universal. In fact, it may be more difficult to teach at this stage since the skill has become largely instinctual. It is at this stage when, if someone asks you how you knew to do that, you have to pause, think and say, "I don't really know. I just did it." This is trading mastery.

There is another, final and rarely-discussed stage that is called Conscious
Unconscious Competence. Those who have reached this stage are the best teachers, and they are rare and difficult to find. Find one of these people to guide and support you if you really want to learn how to trade.

Champions execute the fundamentals with unconscious competence. That means they've practiced the moves so many times in the past that they can do them almost perfectly without thinking about it. When you can perform brilliantly without thinking, you can perform at a very high level…June Jones (Head Football Coach, University of Hawaii Warriors)

Until next time,
Good Trading and Brain On!

Janice Dorn, M.D., Ph.D.
Train Your Trading Brain
The Trading Doctor Live Trading Site

Big Thanks to Janice for producing great articles on trading. Janice is an excellent doctor by profession and she knows how brain works.

Janice article about synaptic trading is so true, that when i read that article i wanted to weep. Yes, i wanted to weep because from the ocean of wrong guidance which is available to traders, this article stands out as 100% true.

There are 100 billions neurons connected with 1000 trillion synapses in our brain. Learning happens when through constant revision we strengthen the neuron and synapses connections inside our brain. The harder i work, the luckier i get is true because the harder we work, synapses and neurons gets strengthen in our brain leading to skill development.

Any profession in world be it medicine, accountancy, engineering, motor driving etc requires training so that brain pathways forms in our brain. The problem in trading is that we have to do self training all by ourself as there are no coaching institutes available.

I am inspired by Janice life. She studied hard to become a Doctor, she had worked as a head in a big company, she had faced health issues in 1990s, she had faced losses for 3 years when she started trading in 1996- She faced these challenges, fought hard and won.

95%-99% loose because they have not strengthen the neurons and synapses inside their brain leading to flawed synaptic execution during trading hours.

Lots of love and regards to Janice for her invaluable and outstanding guidance.

[EminiTradingCoach]

Trading is simple, but it is not easy.

This kinds of reminds me of how Marcel Link in High Probability Trading said Anybody can place a trade, but making money is an entirely different task.

Great Article - thanks for sharing.