Kai wrote: ↑
Wed Jul 29, 2020 2:05 am
Diacritical Quark wrote: ↑
Mon Jul 27, 2020 5:56 pm
Ok, I've come to the long drawn out conclusion that I just can't hack it as a 'trader' so to speak. A lot of this has to do with me attaching emotions to trades and my general inability to separate losing from being wrong.
I don't think this is true at all.
If I may be so blunt the exact first thing you said here is one of the biggest misconceptions around IMHO. People give trading a go and for a long time they obviously either trade without
a real edge or with a very minor
one, and trading like that will probably be mental torture and an emotional roller coaster etc for nearly everyone, you're walking a very thin line and every trade counts, that's simply too much pressure for a new trader and he will probably crack under it. This is all obviously a perfectly normal process and it's to be expected, and yet people sometimes already start thinking that they're just not cut out for this and may start thinking about automation or other things.
The misconception part for me actually comes after this first part and in more ways than one. Because people start thinking that this is what good trading is supposed to look like, they convince themselves that at this point you're supposed to conquer your emotions etc so that you can in other words be consistently profitable with a slight edge over the market which is nearly mission impossible by default. When they obviously can't do that then they maybe focus more on psychology than the markets and they start reading a ton of psychology books thinking that this will "solve" the emotions part and give them that elusive edge or that missing piece.
While in reality, the emotions are not the real issue here for me at all, the only real obvious problem here is that they're trying to trade without a genuine strong edge. If you had to choose, would you rather have a perfect mindset or a strong edge? If they found and developed a strong edge, then emotions are no longer an issue, a small edge can be strong as well and can be a good start btw. The mental skill set (aka emotions aka trader's mindset) will naturally develop through people using this (first) edge and for the most part those issues will be ironed out and be so minor that they won't matter.
If you hear anyone say that they've got the perfect trader's mindset, that they're in complete control over their emotions, that they are simply immune to all of the cognitive biases and so on they are either liars or delusional, no matter how big or experienced they may be they 100% suffer from all sorts of cognitive biases whether they realize it or not, but does that really matter to them? Nope, the only thing that matters is having as many strong edges as possible. If they can do something stupid with a few trades and let emotions/greed get the better of them and allow the market to properly spank them but still
end the day comfortably in profit then that is a strong edge, and they don't care about emotions at all, that's the easiest and maybe the only way to "beat" emotions. There's no beating them, you will feel all sorts of emotions but they won't matter and with a strong edge they won't influence your decision-making as much, with a strong enough edge you develop the ability to reset your emotions on a market per market or day by day basis. I bet even Dalai Lama would make a rotten trader at first and would chase losses all over the place. Of course, you can make a minor edge work as well if you stay mentally consistent but I see this as the much harder and longer path that doesn't really need to be taken.
Yes, you can trade much better and much easier and much more efficient if you over time develop genuine mental skills and learn how to better deal with your emotions, but it's not a prerequisite at all to be successful, your starting mental skill set can be extremely average or even very bad, and you can still be profitable or even a very good trader despite that, I don't think people realize this at all, they think they need to be perfect mentally to trade profitably which is simply not true, hence this post.
So for me the only thing that matters is the edge itself and the market itself, ideally you want to study and observe and measure and trade
your market until you know everything about YOUR
market and its behavior and its patterns and quirks and how it thinks and so on, until it becomes dead obvious how you should trade it and where the opportunities are (that's the edge part). You may fear this market on the first day but one day it will be your playground. Even one tick is a not a bad start, one relatively free tick per market doesn't sound bad at all, anything positive that can get the ball rolling in the right direction.
To sum up this impromptu little essay, and forgive me if this sounds blunt, but the main reason people can't find a good edge is simply because they don't know and don't understand their market well enough (and the psychology behind it). Makes sense, no? It's very simple in a nutshell. And this probably sounds harsh but that's how the market is, they don't yet deserve the edge either, if they did deserve it through deep hard quality work then they would get rewarded already, because people may want
this or that edge but for the most part they will only get what they actually deserve. A person might think and feel
that they definitely deserve some success, if they've been at it for a very long time and lost countless banks and went through hell and back more than once etc, but the nature of this business is brutal and unforgiving and if they're not learning their lessons and if their experience and knowledge is not where it needs to be according to the market then the market will not care one bit and will have no mercy, because according to the market they sadly don't yet deserve anything. To put it plainly there's obviously just not enough quality in their work overall to crack the Enigma that is the flippin' market. It may feel completely impenetrable at first glance and super efficient, but that's only how the market looks from the outside and it's far from actual reality. I feel that the first step/edge is by far the hardest one to make so hopefully you don't give up and are able to make it.