General discussion : Trading for Newbies Part 6 - why get angry?

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JollyGreen
Posts: 1990
Joined: Sat Mar 21, 2009 10:06 am

Tue Sep 03, 2013 12:16 pm

I want to try and help people fix their mental approach as I honestly believe this will allow them to improve their trading. Sadly, I cannot offer a potion to cure all ills, we all have our crosses to bear. What I need is for people to be completely honest about their mind-set, their issues, etc. In order to fix a problem you have to acknowledge it and then you have to work towards a resolution. Please please please remember this is a broad brush approach so you may have to tweak things to suit your needs.

First let me explain what sets apart an experienced and good trader from a newbie or novice trader. We've already mentioned it - mind-set! Most new traders want to run before they can walk and that usually leads to them falling flat on their face. Even though they proverbially fall on their face it still hurts!

We now know that when emotion rides high it shuts down higher brain function. This basically means you lose your ability to think straight. You won't lose all of your ability; it will be proportionate to the level of emotion. When it occurs you have to rely on unconscious competence so unless you are experienced that is likely to be lacking. The “old hand” has a better chance because their level of unconscious competence is greater so they are not affected as much.

What can we do to prevent this? Well the most important thing is to recognise the problem and acknowledge it. When you know there is a problem you can think about how best to deal with it. It is absolutely vital you recognise the emotion building; if you have crossed the threshold into brain function shutdown then you’ve gone too far and will not be able to deal with it.

What causes the problem? Well in trading it is a loss, let’s face it we would all like to avoid a loss. However, the experienced traders knows it isn’t possible and losses are a part of trading. We tend to do our best to trade correctly in an effort to eradicate the loss but we DO NOT chase or gamble. We also do not get angry or upset by it. One of the replies said “I take red as a personal insult” but you have to try and let that feeling go.

I mentioned earlier that when I look at a market I see opportunities whereas someone with a negative mind-set sees potential problems. One of the best ways to improve this is to treat the market as a friend and not an enemy. Before you think I am going loopy let me explain the psychology of this approach. Imagine you are driving down the road and a car pulls out in front of you without looking. It’s a stupid move causing you to slam on the brakes. What is your reaction, do you get angry and gesture at the other driver or do you accept it and just let them drive on? If it is the latter then you probably don’t have an issue with the mental approach whereas the former is a problem and you need to think about it a bit more. I was in the “angry” camp!

Okay so same scenario but this time you look up to see it is a friend driving the other car. They hold up their hand in apology and mouth “Sorry, I need to get to the hospital, it’s an emergency!” Do you still get angry? Somehow I doubt it and if you’re like me you want to help your friend and you certainly don’t want to impede them. I hope that makes sense? So try to apply that approach to the market, treat it as a friend and let it help you in your reading of it. You’re not going to stop all your issues with that one change but it will help you. Now when the market moves you should see it as a positive thing, almost a friend waving at you saying “I am going this way!” This way you will see the moves and won’t feel as if the market is some form of enemy trying to trick you. If you work on this for a while and watch the market you will see things in a different light.

In the next part I will explain what we do to prevent emotion from taking over.

Tradertrician
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Joined: Mon May 20, 2013 7:15 am
Location: Suffolk
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Tue Sep 03, 2013 8:45 pm

Love the way you use scenarios to help explain the point you are trying to get across. It really does simplify things to a point where us newbies totally get exactly what you are saying.

This is complicated stuff to a newbie and when I read stuff like this in books or other websites, I normally have to read stuff multiple times to try to get my head round it coz the author more often than not makes the mistake of believing that the reader has much more knowledge of the subject than they actually do resulting in them not explaining things in a basic way where its understandable to a newbie if you know what I mean.

Again great stuff JG and thank you for taking the time to help us newbies :)

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JollyGreen
Posts: 1990
Joined: Sat Mar 21, 2009 10:06 am

Wed Sep 04, 2013 8:40 am

Tradertrician wrote:Love the way you use scenarios to help explain the point you are trying to get across. It really does simplify things to a point where us newbies totally get exactly what you are saying. :)
That's very kind thank you.

I try and keep things simple and use scenarios as I know they help to stimulate the mind. When I teach people anything I try and give visual stimuli as I know a picture really can paint a thousand words. So if I can explain something and also add a visual clue or reminder it helps them to both understand it and remember it for the future.

If you need proof that this works then try the following with anyone. Find an old photograph of them somewhere and make a note of the date. Ask them what they did at that time but do not mention the photo. They'll probably say "Are you joking how can I remember that?" Then show them the photo and I bet you they will recall everything! People complain about a poor memory and say they can never remember things. Actually we all have the same capacity within reason it's just that too many people don't have the recollection triggers to make their memory work. A common fault is trying to remember something before you have actually stored it in your memory or by saying "I'll never remember that!" The mind is powerful and will simply not remember it because that was the intention.

Everyone can learn this, not just me!

JG

Tradertrician
Posts: 27
Joined: Mon May 20, 2013 7:15 am
Location: Suffolk
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Wed Sep 04, 2013 7:09 pm

I do use scenarios to explain things to people myself, sometimes I have real trouble trying get people to understand what I'm saying, especially when I'm talking to my customers about stuff they have no idea about and over the years I have found that's the easiest and best way to do it although my ex wife's would never understand what I was saying scenario or no scenario lol

I have been having no end of trouble with my internet connection which obviously is not good when trading, its been a nightmare for ages now, it slows down to virtually nothing at least 3 or 4 times a day and in the last week it has been going completely down every other day for sometimes hours on end, I finally had enough on Sunday and placed an order for fibre with another company.

When i ring the old company for my MAC code and they give me the hard sell to try to get me to stay, I am simply gona say to them....

If your car broke down every single day on your way to work leaving you miles from anywhere, what would you do? Would you

A) get a new car
or
B) stick with the car you have and hope it miraculously stops breaking down on you?

Don't think they will really be able to come back at me with anything after that!

skotten84
Posts: 42
Joined: Thu Mar 10, 2016 3:36 pm

Sat May 07, 2016 9:39 pm

Great post!

mark04
Posts: 3
Joined: Tue May 17, 2016 11:52 am

Tue May 17, 2016 12:20 pm

Knowledge is very important for newbies and I suggest you to explore online forums and search engines, read some E books and also do some practice it will make you perfect in Sports understanding.Also you can see more details here.
https://www.hityah.com/sports/soccer/england/

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