Attitude

[Euler]

I've been studying unsuccessful traders in recent months to try and understand why they struggle. One of the things I have picked up on is there over reliance on the negative.

When I enter a market I am looking for opportunities. If I execute on one and it fails I dump it and move onto the next one. Decent trades present themselves all the time.

When I've looked at people struggling they often scratch trades that would be profitable, i.e. they feel lucky to have avoided a loss and let losses run too much. As a consequence they never really get the upside needed to turn profitable.

Just an observation for you..

[Consty1]

It's a very difficult attitude to break though and I suspect most new traders (myself included) have trouble with this. I often find myself scratching trades that would have been profitable if I'd have followed through with my initial strategy. The problem seems to be fearing negative results to a point where you expect them to occur at every given opportunity. It's a pessimistic view but it's difficult to break.

I guess it can be likened to poker where you avoid making a +EV decision because of recent negative history attached to that decision.

[superfrank]

It comes down to confidence much of the time. It's amazing how things go your way then you trade with some (you just naturally tend to make better decisions with a PMA). For someone very experienced (like Euler) that confidence is probably second nature and has allowed him to take his trading onto another level.

The turning point for me was just realising that if I traded with discipline (and truly accepted losses without a care) that I'd invariably come out on top.

But that confidence is hard won and it's easy for doubts to creep back in for the less experienced.

[Euler]

The turning point for me was just realising that if I traded with discipline (and truly accepted losses without a care) that I'd invariably come out on top.

But that confidence is hard won and it's easy for doubts to creep back in for the less experienced.

I think that is half the trick, 'taking losses without a care'

[Euler]

I did a fascinating experiment recently where I told half the people in our training room they were using real money and the other half fake money. In fact it was the other way around and the people who thought they were using fake money did a better job than the people who thought they were using real money.

[LeTiss]

I'm glad I've met you Peter, otherwise I'd be starting to think that you're Derren Brown in disguise

[convoysur]

Hi
i dont think its just trading that people have problems ,
there have been alot of studies done ,i was fanasated by i read 2 months ago some where ,done by harvard university,
the results showed that only 3% of the population were capable of working on there own and making decesions without supervision,
i wonder what the percentage of people who try to trade but give up ,because it dosnt suit there personality for what ever reason.?
Marc

[superfrank]

There's probably a lot in that convoysur.

Many people who are successful in the corporate world are schmoozing yes men who climb the greasy pole using a combination of hard work (doing what they're told) and sycophancy. Whether many of these types could ever cut it in a world where sucking up to the boss is not an option is an interesting question.

[Alpha322]

I've been studying unsuccessful traders in recent months to try and understand why they struggle. One of the things I have picked up on is there over reliance on the negative.

When I enter a market I am looking for opportunities. If I execute on one and it fails I dump it and move onto the next one. Decent trades present themselves all the time.

When I've looked at people struggling they often scratch trades that would be profitable, i.e. they feel lucky to have avoided a loss and let losses run too much. As a consequence they never really get the upside needed to turn profitable.

Just an observation for you..

I feel people want quick money and dont want to execute a proper money management and trade plan to be profitable

[Alpha322]

It's a very difficult attitude to break though and I suspect most new traders (myself included) have trouble with this. I often find myself scratching trades that would have been profitable if I'd have followed through with my initial strategy. The problem seems to be fearing negative results to a point where you expect them to occur at every given opportunity. It's a pessimistic view but it's difficult to break.

I guess it can be likened to poker where you avoid making a +EV decision because of recent negative history attached to that decision.

Dissconect from the money and connect your mindset to the trade

[JollyGreen]

I've been studying unsuccessful traders in recent months to try and understand why they struggle. One of the things I have picked up on is there over reliance on the negative.

When I enter a market I am looking for opportunities. If I execute on one and it fails I dump it and move onto the next one. Decent trades present themselves all the time.

When I've looked at people struggling they often scratch trades that would be profitable, i.e. they feel lucky to have avoided a loss and let losses run too much. As a consequence they never really get the upside needed to turn profitable.

Just an observation for you..

I know we don't like using quotes on this forum but forgive me on this occasion.

Holding onto a negative is strange because if you look at how we develop it is a complete turnaround. I know that may seem strange but think about it a bit more when you read my thoughts on the matter.

We are conditioned to get what we want...but...we tend to change that conditioning at some point in our life. I think social circumstances will have a bearing on that switch over point. As a child can you remember asking for that ice cream, chocolate, etc? You would keep on and on until you hear the magic word "YES". You would find yourself in other situations where you wanted something and you knew which buttons to press to ensure you get the person who makes the decision to make it a positive one. I know we didn't always get what we wanted but it wasn't for the lack of trying!

Then suddenly that ability goes away and a lot of us forget it. Who remembers going out for a night and seeing a pretty girl ( a good looking guy for the ladies on here) across the room. Now honestly how many of you would say "I can't ask them, what if they say no?" I was never like that, I would go and ask because the worst that could happen would be a no. I must add that I was not always successful but the law of averages dictated I had to be successful at some point.

This change tends to see most people go into a defensive mode. This is not a criticism of anyone, this is a natural behaviour but more importantly it is a learned behaviour. Even more important is the fact we can change this behaviour and go back to our childhood methods if we really want to. Some people see this as regression because their social surroundings suggest it is negative. My view is simple, ignore the others, think positive and give it a go. If you get it wrong, think about why and then try again.

Sadly too many people wait for the perfect opportunity. Thinking back to the night out, it would be like the gorgeous girl or guy coming over and making a move on you. That sounds wonderful but let's face it, we aren't that lucky are we?? So we need to make our own luck and give it a go with a child like "devil may care" attitude. I don't mean jump in and waste money I simply mean think positive and give it a go.

My dear old Mum used to say to me "Don't trouble trouble until trouble troubles you!" I wasn't sure what she meant when I was younger but it applies to almost every situation in life, especially trading.

[PeterLe]

There's probably a lot in that convoysur.

Many people who are successful in the corporate world are schmoozing yes men who climb the greasy pole using a combination of hard work (doing what they're told) and sycophancy. Whether many of these types could ever cut it in a world where sucking up to the boss is not an option is an interesting question.

Hi SF
Slightly different perspective

Trading isn't my main income...it would be if I could get redundancy. Although I have tried to maneouver myself in to such a position for years I keep getting over looked..

What i have found is that I dont work anywhere near as hard at my day job and there has been no drop in my performance (I work in sales so fairly easy to compare year by year)..I often wonder if i had adopted this "work a little less hard" attitude over the less 20 years or so, would it have made any difference to where I am now? These days I probably only really put in half a week rather than a full week..yet last year I was promoted because of my performance (if only they knew!)

The situation I was in say 10 years ago was that I "had" to active my sales quota so I could pay my bills... Yet these days I would rather walk away from a bad deal and lose the small commission and wait for the "big ones" as I dont "need" the commission any more..so in some ways the money I have made on Betfair has in fact made me better at my job!

The above is not too dissimilar to trading..when you think about it?
I often lose on my trades, but I know that I will have a positive P&L at the end of the month, so i dont care about the odd losing trade

Regards
Peter

Edit: That's why I have said in the past about not losing stop losses...all they do in my opinion is bring your average down

[Iron]

An interesting quiz to reveal psychological biases: http://www.vanityfair.com/business/feat ... uiz-201112

Jeff

[superfrank]

@PeterLe

Trading calmly is very important to good decision making and if you are relaxed about the money then that must help.

I can't remember who it was, but a trader on here said that he couldn't trade properly under (financial) pressure and was going off to work on the oil rigs.

I try not to give myself financial targets other that covering my (London!) rent ASAP each month. Even that simple target doesn't doesn't help as my profitability tends to be poorer at the start of the month and gets better as I go along.

[JollyGreen]

@superfrank.

Some good points and that is why I feel we need to go back to our child like ways of getting to yes. I don't mean having tantrums - I am sure you know what I mean. I know it is hard but it is possible.

It was Rhyswho was going to work on the oil rigs, I haven't seen any posts from him of late so I hope he's okay.

Cheers

JG