[zdo]

MMS,

Are you saying "dealing with each persons psyche and overwhelming need for some reason to blow up the trade plan. That need to be right all the time is tough to battle." , etc. is one of the reasons the 'psychologists' leave? If not, even though your comments are otherwise immpeccable, we're getting off topic of why 'they' leave...

The 'psychologists' I was asking about are the traders who come up here to the forum and offer help with the mental challenges of the game - from either a professional or lay level. It was mostly a curiosity question about why most of them post very constructively for a while then just disappear - with a significantly shorter life cycle than most good posters on forums. Recent example - fxGirl... what happens?

zdo

[Kiwi]

zdo,

I wonder if they stop posting because internet trading forums are such a poor venue for achieving their goals. Also, in their normal job they are interacting with a more "real" people. So the reinforcing satisfactions are not there for them.


MMS,

You assert that you wouldn't take the cure from someone who hadn't walked the walk but I think that ignores the value of specialization - on which our whole western industrial civilization has been built. Someone could gain skills in helping people be happier and achieve their goals; then gain some experience with traders and thus understand the drivers of some; and then combine the two to enhance their customer's abilities.

I do think we attract more charlatans and one trick ponies than general practice although I suppose even NLP didn't last much longer or stronger with us then in general. I think that the potential rewards might help attract such people to the group; also the extent to which people struggle with themselves in trading.

Kiwi

[FXGirl]

Sometimes life gets in the way of posting. It’s been a gray, cold spring and early summer here on the coast of Southern California and my family has needed a lot of attention – youngest son going through a major health and career challenge. Last week the sun finally came out and it seems that we’ll have a summer after all, if a short one. Now it’s time to get the taxes done – I hate this part of running your own business.

Rande, I dropped by your booth at the Trader’s Expo in Las Vegas last May. It was good to make your acquaintance and be able to match a face with your posts. I found your grasp of traders’ psychology impressive and your program looks like a good one. I’m looking forward to your presentation in September in Vegas. I’ll come up after your talk and maybe we can chat for a while.

If any of the people on this thread are going to be in Las Vegas at the Trader’s Expo, it might be fun to get together as a group. Shall we organize that?

MadMarketScientist, you bring up an interesting point about expertise when you said, “I wouldn’t take advice from someone who hasn’t walked the walk. No matter what their training.” My gut wants to agree with you: If I were selecting a trading coach to work with, I’d want to know that he/she had gone through the process of becoming a successful trader. This would help me feel that the coach really understood the challenges I was facing. On the other hand, I know as a psychologist that it’s possible to help someone who has been abused, raped, suffers from addiction, is depressed, anxious, can’t stop washing their hands and checking the locks on the doors, is cutting themselves, going through a divorce or any of a number of other difficulties without having experienced those difficulties myself.

So, I’m not really sure where I stand on this issue. Lots of studies have shown that the quality of the connection between the therapist and the client is more important than the type of therapeutic intervention used. I guess that the most important criteria for me in selecting a trading coach would be whether I thought we were on the same wave length (gut level feeling) and whether they were competent to help me (knowledge and expertise). Perhaps others have some thoughts about this issue.

While we are talking, MadMarketScientist, I do want to question another of your statements: “…each persons psyche and overwhelming need for some reason to blow up the trade plan.” Although I have a healthy respect for the unconscious and its ability to interfere with our conscious intent, I don’t think that many people have an overwhelming need to blow up their trade plan. That seems like a catchall phrase that can prevent you from digging deeper and identifying the real issues. Just like a “fear of success” is not about fearing success, but about fearing you won’t be liked, or fearing that you won’t be loved by you father if you do better than he has, or a myriad of other possible reasons, if you don’t get down to the real issue(s), therapy isn’t going to go anywhere.

Or it could just be that the trader in question just doesn’t have the strategies he/she needs to handle his emotions/physiological arousal during trading – no big underlying issue.

[KeyToTheCastle]

Originally Posted by FXGirl »

Or it could just be that the trader in question just doesn’t have the strategies he/she needs to handle his emotions/physiological arousal during trading – no big underlying issue.

Hello fxgirl..not sure about your last statement there. If you are referring to having an edge then I agree. But I respectfully disagree with the traditional way in which people try to use psychology to become better traders. I am not a psychologist but rather speaking from my personal experience as well as observing other traders.

Everyone seems to lean on psychology as a crutch for their unsuccessful trading. Traders should concentrate on finding their edge first. But more importantly...not only having an edge and being able to implement it but fully understanding the underlying dynamics that cause your edge to work and tilt probabilities in your favor on a consistent basis. It's one thing to have an edge and being able to notice situations and patterns that produce the edge but it's not until you reach the point of understanding the underlying reasons beneath the surface that are making the situation play out in a certain way do you begin to take your trading to a whole new level where you accept risk and make decisions based on market derived information not some arbitrary stop or profit level.

Having and understanding an edge = Acceptance of risk = beginning to think,act,trade like a successful trader.

Can psychology help someone after that point....maybe....but until a trader is at the point of trading with an edge then the psychology only serves to temporarily make them feel better until they begin to trade and start losing again.

The conditioning and repetition of seeing and experiencing your edge play out real time in the market is the 1st step to success. Edge first then the psychology can fall into place.

[FXGirl]

Hi, Castle: Yes, I can’t agree with you more that if you don’t have an edge, you can’t be a profitable trader. And understanding where that edge comes from, “the underlying reasons beneath the surface…” is essential. Where we probably disagree is how you get to profitability.

Because you are an experienced trader, you understand that there are different levels of understanding market movement – the novice’s grasp is much different from that of the trading veteran of many years. The novice trader who learns a trading strategy (let’s assume that it is a valid edge) from a class or mentor can trade that strategy without having an understanding of the underlying market principles from which it is derived. All he has to do is follow the rules. Of course, he is going to encounter psychological issues that make it tough for him to stay true to the rules of the strategy. The more cut and dry the rules are and the greater the win/loss ratio of the strategy, the easier it is going to be for him to navigate the psychological issues. Can he be successful? Yes, if he manages the psychological part of trading, after all, he has an edge that works. Does he really get what is going on in the market? Only to a very limited extent.

After a several years and many, many hours in front of the charts, our trader will begin to develop a more intuitive grasp of market movement. His subconscious mind has seen various patterns in the market over and over again. He has a “gut” feeling about what is happening. When he is able to move this implicit subconscious learning to a conscious, explicit level, he’ll be able to develop and test additional trading strategies. And, of course, a greater appreciation and understanding of risk is part of this process.

While our trader has been growing in technical expertise, he has also had to face his psychological demons. If he has not done some of this successfully, he will no longer be trading – his losses will have wiped out his account, despite refunding many times, and he will be demoralized and will quit.

If our trader survives this intermediate stage and continues to accumulate implicit learning and translate it to explicit market knowledge, he will be come a master trader. In the process, his greater win/loss ratio will make it easier to deal with psychological issues. There is nothing like consistent profitability to give you calm and confidence. But you’ll never get to consistent profitability without psychological mastery.

Let’s look at your formula: “Having and understanding an edge = Acceptance of risk = beginning to think, act, trade like a successful trader.” Acceptance of risk – a psychological issue if every there was one. You could argue that greater market knowledge give you a cognitive underpinning for greater acceptance of risk, but unless you also recognize that becoming comfortable (emotional component) with risk is a psychological process, you are missing the boat. “Beginning to think, act, trade like a successful trader” – also has significant emotional components. Even at the most basic level, acting like a successful trader requires that you have developed a way to manage the brain’s emotional/physiological response to threat. Never mind all the cognitive and emotional structures on top of that.

It’s easy to use our own experience in moving through the process of becoming a successful trader as a template for others. Perhaps you came to trading with a well-developed set of strategies for managing emotions. If so, your journey may best have been undertaken by concentrating on finding your edge. That isn’t necessarily the case for others. For some, the emotional components of trading are a real stumbling block that will prevent them from being successful even if they develop a great edge.

Anyway, the whole issue of edge versus trading psychology is a silly argument. Any careful observer can see that you can’t become a consistently profitable trader without mastering both. The important discussion is about how you make them work together so you get to mastery.

[KeyToTheCastle]

Originally Posted by FXGirl »

Hi, Castle: Yes, I can’t agree with you more that if you don’t have an edge, you can’t be a profitable trader. And understanding where that edge comes from, “the underlying reasons beneath the surface…” is essential. Where we probably disagree is how you get to profitability.

Because you are an experienced trader, you understand that there are different levels of understanding market movement – the novice’s grasp is much different from that of the trading veteran of many years. The novice trader who learns a trading strategy (let’s assume that it is a valid edge) from a class or mentor can trade that strategy without having an understanding of the underlying market principles from which it is derived. All he has to do is follow the rules. Of course, he is going to encounter psychological issues that make it tough for him to stay true to the rules of the strategy. The more cut and dry the rules are and the greater the win/loss ratio of the strategy, the easier it is going to be for him to navigate the psychological issues. Can he be successful? Yes, if he manages the psychological part of trading, after all, he has an edge that works. Does he really get what is going on in the market? Only to a very limited extent.

After a several years and many, many hours in front of the charts, our trader will begin to develop a more intuitive grasp of market movement. His subconscious mind has seen various patterns in the market over and over again. He has a “gut” feeling about what is happening. When he is able to move this implicit subconscious learning to a conscious, explicit level, he’ll be able to develop and test additional trading strategies. And, of course, a greater appreciation and understanding of risk is part of this process.

While our trader has been growing in technical expertise, he has also had to face his psychological demons. If he has not done some of this successfully, he will no longer be trading – his losses will have wiped out his account, despite refunding many times, and he will be demoralized and will quit.

If our trader survives this intermediate stage and continues to accumulate implicit learning and translate it to explicit market knowledge, he will be come a master trader. In the process, his greater win/loss ratio will make it easier to deal with psychological issues. There is nothing like consistent profitability to give you calm and confidence. But you’ll never get to consistent profitability without psychological mastery.

Let’s look at your formula: “Having and understanding an edge = Acceptance of risk = beginning to think, act, trade like a successful trader.” Acceptance of risk – a psychological issue if every there was one. You could argue that greater market knowledge give you a cognitive underpinning for greater acceptance of risk, but unless you also recognize that becoming comfortable (emotional component) with risk is a psychological process, you are missing the boat. “Beginning to think, act, trade like a successful trader” – also has significant emotional components. Even at the most basic level, acting like a successful trader requires that you have developed a way to manage the brain’s emotional/physiological response to threat. Never mind all the cognitive and emotional structures on top of that.

It’s easy to use our own experience in moving through the process of becoming a successful trader as a template for others. Perhaps you came to trading with a well-developed set of strategies for managing emotions. If so, your journey may best have been undertaken by concentrating on finding your edge. That isn’t necessarily the case for others. For some, the emotional components of trading are a real stumbling block that will prevent them from being successful even if they develop a great edge.

Anyway, the whole issue of edge versus trading psychology is a silly argument. Any careful observer can see that you can’t become a consistently profitable trader without mastering both. The important discussion is about how you make them work together so you get to mastery.

"Acceptance of risk – a psychological issue if every there was one." Absolutely agree 100% with that statement....but my point is only by the conditioning and repetition of seeing your edge play out will that psychological acceptance come. I take it that some would suggest that psychological exercises will get you to that acceptance and that is what I disagree with.


"It’s easy to use our own experience in moving through the process of becoming a successful trader as a template for others. Perhaps you came to trading with a well-developed set of strategies for managing emotions. If so, your journey may best have been undertaken by concentrating on finding your edge. That isn’t necessarily the case for others. For some, the emotional components of trading are a real stumbling block that will prevent them from being successful even if they develop a great edge."

I have to agree partly with that...I am speaking only from my own experience and the experience of watching a small sample of other traders closely. But I also have to say that psychologically I was a trading wreck for about 9 years on and off. Blowing through accounts, going from one indicator to the next, never comfortable being in a trade. And why? Because I never had the confidence that I had the odds in my favor when I entered a trade. During that time I never sought out live psychological help but I do own 4 of the most popular books on the subject and did a lot of reading and research about it. And none of it helped me. Until I started to realize my edge. And even after that it still took me months of repetition and conditioning before becoming profitable. My mindset slowly shifted from one dominated by the thoughts of a losing trader to those of a winning trader. I dont know what else to say except that once I started trading from a winning mindset...thinking, acting and feeling like a winning trader did I start to do the things that winning traders do.

Anyway, the whole issue of edge versus trading psychology is a silly argument. Any careful observer can see that you can’t become a consistently profitable trader without mastering both. The important discussion is about how you make them work together so you get to mastery.[/QUOTE]

I don't think its silly at all....especially on a traders website. I guess we both agree that obviously there are elements of edge and trading psychology that make up a successful trader but my point is that realizing your edge opens up the door to making advancements in the psychology department and not vice versa.

Great weekend all!

[Rande Howell]

zdo -- having some problems getting to post, so going to the general thead.

Not sure what an oxegenmoron is. I know what an oxymoron is though -- and conquering the self, in my work with traders, is central to them becoming consistently successful. Traders appear to have to either confront their fears that manifest in trading or conquer impulsivity wiring that short circuits the desired impartial, disciplined, patient, and courageous state of mind required to produce peak performance trading. The first layer of fear (say fear of loss in trading) is rarely the deeper fear that drives the belief system of the person. It is out of this belief system that the fear of loss springs. Being that the brain is organized to avoid discomfort first, traders (like other human beings) are forced to confront and then conquer their deeper hardwired beliefs of inadequacy, unworthiness, and not mattering that manifest as trading fears (those 9 roadblocks I address in my webinars). This is what I call core material. And for me, there is an internal struggle within each of us that trading forces us to confront. This is the "conquering the self" to which I refer.

The impulse part is hardwired circuitry that is laying on top of the belief system embedded in neural pathways. Fortunately this can be disrupted by understanding the core concern that triggers the circuitry to produce an emotional cascade called an impulse. That can be interrupted using emotional regulation training, but the trader still has to conquer, then re-organanize their belief system. It is this belief system that trades using the tools of platform and methodology. Out of the totality of possibility that the market represents, it is the belief system that actually interprets what is actually seen. To re-organize the self, the belief system that creates the particular construction of the self, requires courage. The brain simply does not want to change a perceptual map once it is created. It is the deconstruction and re-organization of this core material that I call conquering the self. Trading simply forces you into battle within the self -- or you continue losing capital.

Hope this makes sense and is useful.
Rande

[FXGirl]

Castle: Okay, I take back the word “silly” – how about “chicken or egg”? I’m glad we agree that successful traders have to have both edge and psychological savvy. Can we also agree that those two component some together in different ways for different people?

You said: “My mindset slowly shifted from one dominated by the thoughts of a losing trader to those of a winning trader. I dont know what else to say except that once I started trading from a winning mindset...thinking, acting and feeling like a winning trader did I start to do the things that winning traders do.” I’m very interested in what you mean by a “winning mindset” and “I start to do the things that winning traders do”. Could you tell me more about what you mean and what your experience was?

I do believe that if traders started their careers with a winning edge, either by subscribing to a reliable signal service or learning a reliable system from a mentor, they could avoid a lot of the emotional anguish that comes from loosing again and again while they are attempting to find an edge. Perhaps these traders-with-an-edge would be starting from a very different place than most of us started from and would have a much different experience of becoming successful. What do you think? Is that possible? In what ways would the path to profitability be different?