karoshiman

I like that one! No, I'm not following you...

Thank you, John! I am not sure whether it was a conscious decision when I was a teenager. The decision I took consciously was that I did not want to get involved in team sports as I never liked teams (and still don't do... that's why I like trading, by the way ). So I choose individualistic sports after trying some team sports. The sport in which I've excelled was also an individualistic sport. But whether it was my sports or my career I did what I liked, to what I was naturally attracted. I think I was and still am very good at listening to my inner voice. So, I guess it have been more subconscious choices I've made at that time. However, with hindsight I can say that it were excellent choices (subconscious or not) that made a lot of sense and explain my success (to a larger extent with my career though, than with my sports). I am able to see now the bigger picture or the "central themes" in my life and how everything fits together. By listening to my inner voice at that time I had a "natural fit" to my personality. Does that make sense? What is your background? You sound like you have also (like Rande) a professional psychological background.

I am comfortable with the way I think or do things, but I do not cap my potentials. Actually, it's quite the opposite... I've been a somewhat successful athlete on a national level some years back (once runner-up at the national championships) and after that I continued to be successful in the corporate world. However, I did achieve this as I choose a sport and a career which fit to my personality, with all its strengths, but also its weaknesses! I am not saying that you cannot get better in other fields if you work hard at it. You can absolutely and I did that too (e.g. I hated public speaking and was not good at it, but with getting more and more exposure I had to do it during the course of my career and over time I've got really better at it...). I am just saying that you can achieve so much more if you focus on what is already inside you. That's what I did in my life so far and it worked very well for me. In order to stay with the golf analogy, most people can learn to play golf, but few can become professionals (or as I do not become one of these great motivational life speakers ). Coming back to trading, I just cannot believe that so many people have so serious issues with uncertainty that it hinders them executing a trading plan properly. I mean, I had issues in trading too, but that was when I followed rules of others, when I did not understand every single aspect of my trading properly and, most importantly, when certain aspects of my trading did not fit to my personality. But I did not realize it back then. I got lucky that my computer broke down and as I did not have a backup computer I could not trade for a few weeks (had problems with ordering a new computer too). During that time I had time to step back and think about my trading without being interrupted by the actual trading. It was during that time that I realized that parts of my trading are not really what I believe in and some of them actually seemed afterwards like absolute nonsense to me. That was when I started my journey to develop my own method. But that took a lot of time, hard work and trial and error to develop such customized method. But since using this method I did not have emotional issues impacting my trading negatively. PS: By the way, great trading day today! Hope you all can profit from it!

Good points! Regarding Tiger, maybe it was less the marriage problems itself but the "media hunt" and the resulting damage to his so far excellent reputation that came with it which caused his performance problems? ... Who knows... it's difficult judging from the outside what the cause of such problem is.

No, I am referring to basic personality traits. I don't think they will change. Things in our world change within the limits which are set by our personalities. Though, I admit you can improve some weaknesses one might have in certain areas but you cannot change your whole personality. For instance, someone who is introverted and thrives in more analytical tasks instead of tasks where high social competence is required cannot be changed into an extroverted salesman, and vice versa. I think success comes from accepting who you are and finding what you are good at. We all cannot excel at everything. I don't follow Tiger Wood's career, but if this drop in performance came after his marriage problems then that explains it. We are not talking here about external factors which influence everyone, also excellent traders (problems in the family, illnesses, etc.).

Exactly! And the method should not only fit your strengths, but more importantly, your weaknesses! Because it's our weaknesses that limit us. Yes, that's what Ed said in the interview I'm saying, if the technical aspects of trading and your psyche is one, then there is no need to control your plan or ourselves. Because - and that takes up gosu's point - there are no issues... But that is, why this business is so damn hard... "arranging" the technical aspects in a way that there are no issues... that everything is natural to you... So, summarizing my point of view, mental trading coaches like Rande try to adjust the mind. I am coming from "the other side"... I say, the mind is a given and cannot be changed. The work can only be to find the right combination of technical aspects that ARE you, and hence, don't lead to issues! Of course, this process can also lead to the finding that there is no combination of technical aspects that IS you. Hence, trading is the wrong profession for you... Anyway, I think this process of finding the right combination of technical aspects has to do with thinking independently and questioning every piece of information until you are 100% sure that this is the right way for you! A great coach could help in this process too, I guess.

lol My point is, in trading you cannot distinguish between the "technical" aspects of trading (systems/methods, money management rules, etc.) and your own psychology. Either all this works as one (then you got it) or it doesn't (then you have to keep on working to find it). I like the quote from Jack Schwager's first book in the preface to the Ed Seykota interview: "... to him, trading and psychology are one and the same thing."

I don't think that you can compare the situation of a sport psychologists or a management coach with what some unprofitable traders might expect from a trading coach. I know at least about management coaches as I had one when I was an aspiring manager. Sport psychologists and management coaches work with people who are already quite successful in what they do. Usually, you have to reach a certain level of success before you get a coach like this. And then, they work only on nuances. But they don't make a world class athlete or manager per se. Among several world class athletes or managers they can make a difference though, as everyone is already very good in the basics and these nuances can matter. Compared with trading, I would say that an unprofitable trader does not yet master the basics. Otherwise he or she would be profitable already. A coach cannot change that IMHO. I am not a psychologist of course... but a profitable trader ;-) A coach can potentially help here also with nuances, e.g. reducing stress levels by teaching meditation techniques, etc. or increasing the concentration capabilities or similar things. I am sure that this would also have an impact on the bottom line. But this impact would be only marginal, i.e. increasing the performance from 16% to18% in period X, but not from - 16% to + 18%.

You are right. Maybe the difference is that I did practice my learnings immediately in the markets although they were not yet fully developed. It was very costly though and I would not recommend it to anyone unless you have a lot of money to lose... But due to my approach I think I've developed it pretty fast... I paid the price for that, of course... Good analogy with the school!

What comes also to my mind is, if you put in so much effort to understand yourself and develop a customized method based on your own beliefs then you also don't have any problems with emotions causing you to do stupid things in your trading. There are no conflicts within you as "the final product" came out of yourself. This came to my mind, as we have this interesting discussion regarding emotions in this thread: http://www.traderslaboratory.com/forums/psychology/12958-illusion-control-first-step-emotional-sobriety.html

For me, it meant reading tons of books but also a lot of trial and error. All the info you need is out there. Unfortunately, it is not in one book but scattered over many many books. And sometimes you have to also be able to "read between the lines". And as I said, what works for me will not necessarily work for you. You have to be able to put the pieces of the puzzle together for yourself. Start to build some hypotheses about the markets. How you understand them and how it makes sense to you. There are many different viewpoints available which can help as a start. Find those to which you can relate. But start to think further about it. I haven't found one approach which did not have any flaws, at least from my point of view. So, be critical in everything you read and think for yourself. Hence, I did not copy any method 100%. I've took only the parts which made sense to me and combined them with other aspects from somewhere else which made also sense to me. Of course, you have to be careful that the overall combination still makes sense. By the way, when I talk about methodology I am not only talking about entry and exit "signals" but also risk parameters and money management. It is all one interrelated system that must fit your personality. At the end I've came up with a methodology which works for me, but about which I've never read anywhere else. However, the individual components of this methodology are not new, but "stolen" from here and there. Their combination and application is unique and fits my personality. That's what I had in mind when I said, it takes some intelligence (but more common sense) and hard work to figure out. But that's where your edge is...

I think they do, but the deviations are smaller in extent and are also acknowledged and corrected a lot quicker than with other traders. At the end, we are all humans and do mistakes. The question is how often and with which impact.

Hm... I would say "very similar", instead of "nearly identical"... The major difference is - and that's why I would not sign the second sentence above - in trading, the rules of the game are not clear. In poker you have clearly defined rules how the game works (52 cards, ranks of winning hands, etc.). Hence, you have many good books about poker strategy (mike has a different view on this). The game is already explored. Of course, it's application is not easy as you have to adapt to the players at your table. But this you learn with experience. Trading in contrast is far more complex. There are no rules defined. And to make it more complex, everyone has to find the rules which work for him or her. That takes some intelligence and hard work to figure out. The good thing though is, once figured out "how trading works", the edge can be much much bigger than in poker. I agree that we trade traders. But you cannot identify individual players in the trading game ("fund XYZ is covering its shorts now"). However, I agree that these are important questions to ask yourself and at least think about groups of opponents, e.g. the locals, hedge funds and how they approach the market in general. But you cannot explore individual strategies of them. It's just general concepts you have to be aware of. In fact, that's a big difference to poker in my opinion. In trading, you are very much limited to choose your opponents. You are more or less forced to trade against professionals. In poker, you can choose the table you sit at or the hands you play against certain players. Otherwise, I would be interested in how you do it in trading Or are you trading individual stocks? There it might be possible, seeing who is bidding, etc. I am trading only ES. That might explain our different viewpoints here. That's cool. I like the game too, but it's not relaxing for me, as I want to make money... it's hard work. Poker is - for me - harder than trading. You have to stay alert and watch and think about the other players for such long periods of time. It's very exhausting for me. In trading I just wait for my setups to occur and I then take a trade. No need to sit in front of the computer nonstop for 10 hours a day with my methodology. A lot easier...

lol But reading your last two posts, in my book, you have also a plan, even when this does not mean waiting for the market to reach a certain price at which you then execute. Your approach is more flexible if I understood it correctly. You wait for the market to reach p2. Then you wait for (or trade) p3 and the resumption of the move. That's also a plan, only a different one. And regarding "ACH", if I understood you correctly, you do not predict where p2 will be. You wait for the market to establish p2, i.e. you recognize it when it happened. So, you also say in certain circumstances that Anything Can Happen (p2 can be "anywhere"). Of course, and I think that's what you mean, when you saw p2 being established, you "know" what happens next. I don't know how the "inventor" of ACH interprets it, but I think "ACH" is more of a reminder that markets can always react different than one expects. So, it is more of a mental help rather than then expectation that it's 50/50 game. I think my approach to trading is in ways similar to yours. I wait for certain things to happen (call it "setup" or whatever) and "expect" price to move into a certain direction from there. I don't like to say "know" as I want to stay flexible, if - for whatever reason - price reacts differently afterwards... but maybe I am not long enough in this business to say "know"... certainly, you are longer in this business than I am. Maybe I will say "know" too when I've traded my method long enough. Please correct me, if I did not understood your approach.

The discussion here might be interesting to you (but you saw it already, I guess): http://www.traderslaboratory.com/forums/psychology/12958-illusion-control-first-step-emotional-sobriety.html

Yes, I think the questions above refer to people who have not yet found the right path. The fact, that you like to re-read things is a different thing. You re-read them (I guess) not because you did not understand them or their importance, but it's quite the opposite. You re-read them because you know that this is how it works and you want to ingrain it into your brain or look at it again from a different angle. And nobody said that the right path has to be complex In fact, I believe that the right path in most aspects of life is simple. Some very intelligent people often don't get it, as they tend to overcomplicate things. And that's for sure not the right path... (some things ARE, of course, complex... but too much intelligence, or better, intelligence without pragmatism can hurt... :crap:)

We only act irrationally in the face of uncertainty, if we don't trust 100% in ourselves and in what we do. See also my previous post # 14. My

I have to differentiate my statement above regarding psychology in order to be not misunderstood. What I've meant was that the problems caused by emotions in trading are "overrated" or misunderstood. They are overrated because it's not the emotions which cause the problems. It's the missing link between the traders personality and his or her method. So, in fact, the subject of psychology is still UNDERRATED in a sense that many traders have not yet been able to find a method which suits their personalities. Find a method that "fits" your personality. Or, even better, find a method which IS you! Hence, the only way for a coach to help a trader overcoming the problems caused by emotions is - from my point of view - to help them finding the right trading method for their personalities. And that requires A LOT of knowledge (psychological and, at least, basic understanding of various methods available) and dedication, both from the trader and the coach...

That's a good idea with the VIX and it should be pretty simple to analyze.

I am the same. I never did sim trading as I have no motivation to be good. There has to be something on the line for me to excel. But I agree with Rande that people are different here. I have also a different "threshold" than most other people when it comes to losing money. I don't get nervous about it. But again, this can cause other problems and it did for me in the beginning... leading to huge losses... :doh: However, I think these basic traits are part of the innate "talents" which can make a very good trader when the trader found his or her method.

Professional funds usually trade only the open and close. Hence, the big volume. Now, that does not yet explain why prices don't move much despite the high volume... I guess, they use some intelligent HFT algos in order to not move the market too much.

Sorry, zdo, I keep my mouth shut!

Good bet by your friend! Hope he still has his shorts... er... I mean the position...

Well, that was an interesting reaction a minute before the release... lol

Well, actually it makes a lot of sense why they do not work consistently. Any volatility measure used just describes the past volatility. As with any indicator describing the past these have no predictive value. Maybe it's a better idea to use implied volatility from the options market. Would be interesting to see whether such system works better...