I agree with this.
Psychology is not an edge, you cannot make money with just a good mentality. A picture of someone sat looking at the screens all day being really flipping mentally tough but doing nothing springs to mind
...anyway - Psychology contains no instructions about the maths of value, price and risk/reward. Regardless of what your 'edge' is, it always reduces down to having risk/reward on your side and that requires a systematic / planned decision making process that could effectively run itself if the human mind didn't have to act to implement it.
The debate is therefore about whether you can (as a discretionary trader mostly) act and react on a plan consistently without being psychologically sound, and that I think is where this idea of it being incredibly important comes from, because nearly everyone that trades has found that it is hard to deal with a variety of biases and issues revolving around losses, wins and time.
Personally I see it as more of a downside protection thing, and also in good times, providing better consistency of returns (but only, if the aggregate of my actual actions results in the rewards paying more for the risk than they are costing at the time..).
One thing worth noting is, that you can have an edge, and you can be super talented technically and still lose money if you are weak psychologically, I've seen people like this go bust more than once, and it is unsettling and worrisome. Crucially though, You can still do ok as long as you do actually have an edge.
You can be really strong psychologically, but you will never make money without an edge.
I now hate myself for typing the word 'edge' so many times. Shoot me.
spreadbetting wrote: ↑Tue Jun 05, 2018 10:55 am
I'm not sure how your own psychology gives you an 'edge' over the market and helps determine where the market will move. Understanding the psychology of how others bet can be very helpful with market moves but not sure how my own is. There's no doubt that to exploit an 'edge' profitably you need to have a certain mindest/psychology but that pretty much breaks down to how people react faced with a red screen.
There are hundreds of things that give you an edge over others, a decent TV ,a quiet and comfy place to trade from , decent bank etc but they won't help predict where the market will move which is pretty much the only thing that'll make you money in the market. But we do seem to be just going round in circles about psychology so if 95% seem to think it's the number 1 we should just fill that slot and move to the others.
Top Ten Market Edges
1. Mindset/Pyschology (80%)
2. ?