Norman Welz and Developing a Trader’s Brain

[RichardCox 10]

Tradingpsychologie, a recent book from German author Norman Welz, was received with a good amount of favor both for its theory and application but most of the book is centered on the appropriate trading psychology. Whether you agree with his opinions or not, Welz does offer a good deal of experience and some insights that are relatively unique when compared to most of the available materials on market psychology. The central trust of the book is that traders must develop the right mindset before profitable trades can be made on a consistent and long term basis.

 

Welz makes the attempt to separate his ideas from most of the literature currently available on the topic but stressing the idea that applied trading psychology is the only useful information on the subject, and this will likely be viewed as refreshing for active traders not interested in theory as much as they are in the daily trading routine. It is widely understood that successful trading requires discipline and a prudent approach, but the actual acceptance of this idea in practice is something totally different, so it is not enough to simply understand these concepts without actively implementing them when trades are placed and managed.

 

Emotional Security in Trading

 

Welz starts his assessment of the proper mindset for active traders with the emotional perspective, essentially suggesting that human being are in constant need of security (in all aspects of life). This presents some problems because anytime a position is open, traders are completely exposed to monetary losses (the exact opposite of security), so there are very few businesses that are less well-suited to personalities that are not prepared for these factors. Welz argues that there are not many professions that experience psychological and emotional responses that reflect many aspects of our personalities that we otherwise might rather forget. For Welz, the financial markets become inseparable from our own psyches and egos, and in the end there is no difference between financial performance (profits), and personal self-worth.

 

Because of this, attaining the right trading mindset is a vital but complicated task but, at the same time, it is difficult to divorce our minds from from the external factors (both financial and psychological). It can take time and patience to separate your mind from its old habits, but at the same time it is these habits that are creating a large number of trading mistakes in the first place so it is essential that these elements at least be identified when assessing a daily trading routine. Looking broadly, our trading psychology is informed by our personal histories, our friends, family, education, and media (social and otherwise). So, as we actually construct a daily trading routine, all of these factors will play a role in the regular patterns we exhibit, and some of these traits will inevitably be less than optimal for maximizing profit results.

 

Separating the Objective from the Subjective

 

When dealing with the approaches that are espoused by Welz and similar theorists focused on the psychological aspects of trading, it is important to understand the differences that are seen with the objective and subjective. The subjective, of course, measures our beliefs, “assessments,” and “gut feelings,” while the objective is the true market reality. While total objectivity is never completely attainable, it is important to understand the role of the brain within the larger trading environment.

 

In the Welz view, traders cannot divorce themselves from psychology, and it is this psychology (brain function) that allows us to to make assessments about potential risks and to recognize underlying shifts in trend and price momentum. When all of these factors are taken into consideration, it becomes clear that mental fortitude is a requirement for success when trading the financial markets. According to Welz, 95% of all trading activity is subconscious and the behaviors that take place in the past are likely to repeat themselves. Since most traders wind up placing losing positions, it starts to become apparent that most of these behaviors are repeated and this is what leads to compounding losses.

 

As a foundational basis for these assertions, Welz discusses an academic survey of traders that were given a trading strategy with high quality backtesting results for 19 of the previous 20 years. After one year of trading this system, all but one of these traders were unable to produce consistently successful results, and the conclusion made was that psychological behaviors were preventing this accurate system from being used correctly. From this study, Welz concludes that success and failure are completely dependent on logical and emotional functions in the brain, and that this is true to such a large extent that even traders with excellent trading systems can have difficulties if negative (and repeated) behaviors are not removed from our daily trading routines.

 

The Tendency to Ignore Psychology

 

When looking at the reasons traders often ignore psychology, Welz cites the fact that more traders are male, and less likely to consider psychology as an important factor in daily routines. Welz suggests that men tend to think that success depends on remaining rational, remaining informed with the dynamics of the market, and compiling experience in decision making. Welz responds to this by suggesting that experience, rationality,and compiled information fail to create success in trading if the brain is not programmed appropriately.

 

When looking to program the brain in an “appropriate” fashion, Welz advises traders to actually use hypnosis to uncover critical aspects of the unconscious. In this state, traders are encouraged to anchor the required competences in the subconscious, in order to remove certain elements of fear and other logic obstacles. Welz suggest that only after this has been achieved will traders be able to engage in the appropriate behaviors, motivations and energies. According to Welz, each trader has different mental barriers and logical obstacles that must be removed in order to trade profitably on a consistent basis.

 

The Welz Trading Discipline

 

For Welz, proper trading discipline comes with the ability to modify behaviors toward a specific goal and to overcome the logical barriers that have prevented you from attaining those goals in the past. To overcome this resistance, traders must integrate knowledge of the markets with a trader’s brain and mental capabilities. Traditional skills are, of course, highly important, but traders must be able to prevent those skills from being overshadowed by inappropriate mental patterns and behaviors.

 

All of this means that successful trading involves some degree of personal modification, so while the idea of actual hypnosis might seem extreme to some, Welz argues that anyone unwilling to take steps to truly change their frame of mind should not put money at risk in the trading markets. If traders focus solely on the logic in charts and price trends, other aspects of the process might be missed and traders might have no way of dealing with the array of emotions that comes with the process of market trading. This, in a nutshell, is the thrust of the arguments in the Welz book.

 

Anyone Can Develop the Trader’s Midset

 

Ultimately, Welz believes that anyone can become a successful trader as long as these common elements of fear and lack of emotional sense can be controlled. This does take some time and effort, as well as a good grip on the realities of the market. Of course, nothing can replace market knowledge and experience in the ways of price activity, but without the complete package, even the best systems can lead to failing results. Welz also discusses the importance of having realistic expectations (you will not become wealthy overnight), because if this were the case, everybody would be a trader. All too often, the importance of psychology in the trader’s mindset is neglected, so it is essential to analyze our own personality traits and look to remove entrenched behavior patterns that prevent trades from reaching their potential.

[Gulam 10]

Hi Richard,

 

Very good article. I looked into the book its in Germen. Do you know if there is an English version of this? Or have you summarized fully whats int he book?

 

Tradingpsychologie, a recent book from German author Norman Welz, was received with a good amount of favor both for its theory and application but most of the book is centered on the appropriate trading psychology. Whether you agree with his opinions or not, Welz does offer a good deal of experience and some insights that are relatively unique when compared to most of the available materials on market psychology. The central trust of the book is that traders must develop the right mindset before profitable trades can be made on a consistent and long term basis.

 

Welz makes the attempt to separate his ideas from most of the literature currently available on the topic but stressing the idea that applied trading psychology is the only useful information on the subject, and this will likely be viewed as refreshing for active traders not interested in theory as much as they are in the daily trading routine. It is widely understood that successful trading requires discipline and a prudent approach, but the actual acceptance of this idea in practice is something totally different, so it is not enough to simply understand these concepts without actively implementing them when trades are placed and managed.

 

Emotional Security in Trading

 

Welz starts his assessment of the proper mindset for active traders with the emotional perspective, essentially suggesting that human being are in constant need of security (in all aspects of life). This presents some problems because anytime a position is open, traders are completely exposed to monetary losses (the exact opposite of security), so there are very few businesses that are less well-suited to personalities that are not prepared for these factors. Welz argues that there are not many professions that experience psychological and emotional responses that reflect many aspects of our personalities that we otherwise might rather forget. For Welz, the financial markets become inseparable from our own psyches and egos, and in the end there is no difference between financial performance (profits), and personal self-worth.

 

Because of this, attaining the right trading mindset is a vital but complicated task but, at the same time, it is difficult to divorce our minds from from the external factors (both financial and psychological). It can take time and patience to separate your mind from its old habits, but at the same time it is these habits that are creating a large number of trading mistakes in the first place so it is essential that these elements at least be identified when assessing a daily trading routine. Looking broadly, our trading psychology is informed by our personal histories, our friends, family, education, and media (social and otherwise). So, as we actually construct a daily trading routine, all of these factors will play a role in the regular patterns we exhibit, and some of these traits will inevitably be less than optimal for maximizing profit results.

 

Separating the Objective from the Subjective

 

When dealing with the approaches that are espoused by Welz and similar theorists focused on the psychological aspects of trading, it is important to understand the differences that are seen with the objective and subjective. The subjective, of course, measures our beliefs, “assessments,” and “gut feelings,” while the objective is the true market reality. While total objectivity is never completely attainable, it is important to understand the role of the brain within the larger trading environment.

 

In the Welz view, traders cannot divorce themselves from psychology, and it is this psychology (brain function) that allows us to to make assessments about potential risks and to recognize underlying shifts in trend and price momentum. When all of these factors are taken into consideration, it becomes clear that mental fortitude is a requirement for success when trading the financial markets. According to Welz, 95% of all trading activity is subconscious and the behaviors that take place in the past are likely to repeat themselves. Since most traders wind up placing losing positions, it starts to become apparent that most of these behaviors are repeated and this is what leads to compounding losses.

 

As a foundational basis for these assertions, Welz discusses an academic survey of traders that were given a trading strategy with high quality backtesting results for 19 of the previous 20 years. After one year of trading this system, all but one of these traders were unable to produce consistently successful results, and the conclusion made was that psychological behaviors were preventing this accurate system from being used correctly. From this study, Welz concludes that success and failure are completely dependent on logical and emotional functions in the brain, and that this is true to such a large extent that even traders with excellent trading systems can have difficulties if negative (and repeated) behaviors are not removed from our daily trading routines.

 

The Tendency to Ignore Psychology

 

When looking at the reasons traders often ignore psychology, Welz cites the fact that more traders are male, and less likely to consider psychology as an important factor in daily routines. Welz suggests that men tend to think that success depends on remaining rational, remaining informed with the dynamics of the market, and compiling experience in decision making. Welz responds to this by suggesting that experience, rationality,and compiled information fail to create success in trading if the brain is not programmed appropriately.

 

When looking to program the brain in an “appropriate” fashion, Welz advises traders to actually use hypnosis to uncover critical aspects of the unconscious. In this state, traders are encouraged to anchor the required competences in the subconscious, in order to remove certain elements of fear and other logic obstacles. Welz suggest that only after this has been achieved will traders be able to engage in the appropriate behaviors, motivations and energies. According to Welz, each trader has different mental barriers and logical obstacles that must be removed in order to trade profitably on a consistent basis.

 

The Welz Trading Discipline

 

For Welz, proper trading discipline comes with the ability to modify behaviors toward a specific goal and to overcome the logical barriers that have prevented you from attaining those goals in the past. To overcome this resistance, traders must integrate knowledge of the markets with a trader’s brain and mental capabilities. Traditional skills are, of course, highly important, but traders must be able to prevent those skills from being overshadowed by inappropriate mental patterns and behaviors.

 

All of this means that successful trading involves some degree of personal modification, so while the idea of actual hypnosis might seem extreme to some, Welz argues that anyone unwilling to take steps to truly change their frame of mind should not put money at risk in the trading markets. If traders focus solely on the logic in charts and price trends, other aspects of the process might be missed and traders might have no way of dealing with the array of emotions that comes with the process of market trading. This, in a nutshell, is the thrust of the arguments in the Welz book.

 

Anyone Can Develop the Trader’s Midset

 

Ultimately, Welz believes that anyone can become a successful trader as long as these common elements of fear and lack of emotional sense can be controlled. This does take some time and effort, as well as a good grip on the realities of the market. Of course, nothing can replace market knowledge and experience in the ways of price activity, but without the complete package, even the best systems can lead to failing results. Welz also discusses the importance of having realistic expectations (you will not become wealthy overnight), because if this were the case, everybody would be a trader. All too often, the importance of psychology in the trader’s mindset is neglected, so it is essential to analyze our own personality traits and look to remove entrenched behavior patterns that prevent trades from reaching their potential.

[zdo 20]

More reviews, etc. at

 

How To Develop A Trading Brain - Yahoo! Finance

 

Google Translate

 

... as with most writers who say trading is xx% psychology

– in this case he’s a psychologist who believes trading is 100% psychology –

I have some issues...

Nonetheless, it looks like a good (audio /) read

 

...striking parallels with much of what our Rande Howell is getting at.

 

(...fwiw - imho and experience, both these coaches appear to place too high a reliance on change via changing the ‘brains’...)

[DbPhoenix 42]

... as with most writers who say trading is xx% psychology

– in this case he’s a psychologist who believes trading is 100% psychology –

 

Well, like Maslow said . . .

[zdo 20]

Well, like Maslow said . . .

 

who is Maslow?... and what did he say?

:missy:

[DbPhoenix 42]

When the only tool you have is a hammer, every problem begins to resemble a nail.

[zdo 20]

When the only tool you have is a hammer, every problem begins to resemble a nail.

 

Thanks. I would have never attributed that one to Maslow…

 

… trying to relate that to this thread…

When the only 'tool' you have is neuron lingua, every problem begins to resemble ________________

???

[zdo 20]

... starting to get into whether 'trading psychology' just has the one hammer, multiple sized and shaped hammers, or multiple and varied tools... but...

 

maybe my first fill in the blank ‘question’ should have been -

 

When the only tool you have is word, every problem begins to resemble ________________

 

 

 

 

 

 

 

(3 People Unfriended You) SEE WHO

[SIUYA 11]

 

When the only tool you have is word, every problem begins to resemble ________________

 

answer: .....a frustration to prove to people on the internet that your thoughts are right?

 

(not directing this to anyone in particular but it seems that all we have here is words, and these discussions often seem to indicate this. A more optimistic answer might substitute 'challenge' for 'frustration')

[zdo 20]

answer: .....a frustration to prove to people on the internet that your thoughts are right?

 

 

... A more optimistic answer might substitute 'challenge' for 'frustration')

SIUYA,

 

Thanks. But, if we could, let's keep the scope to inter and intra personal application of trading psychology - one on one human transactions, in the interest of one or both 'developing a trader's brain'... instead of expanding the answer out to the dynamics of open public forums...

Maybe your 'to be right' answer will remain the same... for the 'one on one human transactions' as it does for public internet discourses...

If so, how this apply to the issue of 'changes' that so many traders seek and need? Thx.

 

zdo

[SIUYA 11]

I think they are the same, Zdo.

Most humans think they need to be right all the time. We are taught that is the case all the way through school and life as well.

Hence to accept the randomness, to accept the probabilities that go with trading, to accept that often you will be wrong is hard to change.

 

To me, a lot has to do with control - and the hammer and nail problem is the same. ie;

I have a problem, i have a hammer, i can control this problem.

 

Yet in the markets, where they go is largely out of our control.....regardless of what great tool we have. Dealing with this uncertainty is what stuffs most traders up.

 

...........

Re your question:

When the only tool you have is word, every problem begins to resemble-----------------

 

How does that relate to changes and trading?

[zdo 20]

I think they are the same, Zdo.

Most humans think they need to be right all the time. We are taught that is the case all the way through school and life as well.

Hence to accept the randomness, to accept the probabilities that go with trading, to accept that often you will be wrong is hard to change.

 

 

...

no argument here

(ie :haha:you're right!)

 

'trading psychology' (and god do I hate that term) ostensibly is about making those "hard" 'changes'

 

...careening onward... so

 

...Re your question:

When the only tool you have is word, every problem begins to resemble-----------------

 

How does that relate to changes and trading?

 

I have questions / doubts about 'trading psychology' as it relates / pertains to traders making the nec. changes, etc.

DBP's quip triggered questions about the tools Welz and all the canonized trading psychologists and alternative trading 'psychologists' (like me) actually have... to repeat from an earlier post

 

whether 'trading psychology'

just has the one 'hammer',

has multiple hammers of various sizes and shapes, or

has multiple and varied tools?

 

now, if we only have one tool - word - does that mean that in each session the 'right' words have to be said to keep both parties 'right' ?

like

When the only tool you have is word, every problem begins to resemble saying the right thing in every utterance. ?

[SIUYA 11]

interesting thoughts.

I would imagine if every person fits a different personality profile, or responds to different actions. eg; some people need to blow up numerous times to want to change, others innately have some switch, some people never will or will revert back....

 

.....then every one might respond to a different tool.

 

We can write something, and we mean one thing to us, and 4 different people can read it and get 4 different reactions. If after a psyco session do people then go out and reinterpret and place their own stamp on it....

 

in which case - true change will only come from within, OR maybe the tools required (the tasks, processes, lessons) really need to be so simple everyone can use them.....in which case change still needs to come from within, regardless of the word.

 

I guess for each of us, whatever we are saying (when being serious) we think are right anyways....(or in my case i usually try and be completely open to being wrong - except when it comes to the wife - can't give ground there or all will be lost )

 

It would be hard to talk/communicate to someone who always believes they are wrong..

 

(Off for dinner, so chat later)

[zdo 20]

...I would imagine if every person fits a different personality profile, or responds to different actions. eg; some people need to blow up numerous times to want to change, others innately have some switch, some people never will or will revert back....

 

.....then every one might respond to a different tool.

 

We can write something, and we mean one thing to us, and 4 different people can read it and get 4 different reactions. If after a psyco session do people then go out and reinterpret and place their own stamp on it....

 

in which case - true change will only come from within, OR maybe the tools required (the tasks, processes, lessons) really need to be so simple everyone can use them.....in which case change still needs to come from within, regardless of the word.

...

 

Across all these "different personality profile"s, "responses", etc the mind creates apparent variabilities in our 'problems'...

but does mind engender variabilities in real 'solutions' ???

heck, does mind engender real 'solutions' at all - ever ???

thx

 

...

...maybe the tools required (the tasks, processes, lessons) really need to be so simple everyone can use them...

such as ... , ... ??? :hmmmm:

[SIUYA 11]

Across all these "different personality profile"s, "responses", etc the mind creates apparent variabilities in our 'problems'...

but does mind engender variabilities in real 'solutions' ???

heck, does mind engender real 'solutions' at all - ever ???

thx

 

 

such as ... , ... ??? :hmmmm:

 

probably first thing that comes to mind - and its seems to be something that many dont bother to attend, and yet it really is simple, and soooo often repeated.....

 

Trading philosophy - a simple one explaining how you think you can make money, why the markets do what they do etc;

 

Trading plan - obviously this would make sense if it related to the above....then test it.

 

Trading journal - for recording if you are sticking to the above two, OR how you can improve it.

 

.........

Simply put - it does not get much simpler than this to develop a trading mind but i think many dont even properly attempt this - instead they go for a half assed attempt, or skip sections or dont bother to look at the contradictions between all three. eg; you want to trade long term, but you system is designed for scalping.

 

I would imagine these three things might help develop a trading mind more than anything.

.................

As for the situation whereby the trader has done all these three things diligently, BUT seems to always self sabotage, OR meddle OR simply cant stick to plan, then first place to look would be the miss match between plan and philosophy --- or motivations maybe.

(These also change over time)

 

After that - extra tools might be seeking professional help....but first you would hope they try and pin point what it is that is causing the problem.

A bit like going to the doctor and saying "I hurt" as opposed to saying "my knee hurts when i bend down and it occured when this occured" --- they might say you are simply old get used to it.

 

Maybe these things should be called building blocks/foundations.....and then only after these are any tools likely to help????

[zdo 20]

Three (cognitive?) ‘sticks’

Trading philosophy - a simple one explaining how you think you can make money, why the markets do what they do etc;

 

Trading plan - obviously this would make sense if it related to the above....then test it.

 

Trading journal - for recording if you are sticking to the above two, OR how you can improve it

"To the uneducated, the 'A' is just three sticks." Eeyore ..................Really????

 

My questions remain…

Does the 'cognitive' emphasis on these three REALLY work across the board?

or… even… Does an emphasis on the ‘potential corrective feedback’ between these three REALLY work across the board?

… and by ‘REALLY work’ I mean - can the 'normal' noobs and persisters (be able to) just do it?

For most, for the 'many', does this apparent simplicity of canonized trading psychology belie the actual obstacles?

ie with traders you 'know', you don’t encounter an endemic ‘slumber’ when it comes to effectively 'connecting' and 'implementing' these three ...?

 

Thanks.

 

zdo

 

PS whatever this has to do with Welz' material is fading fast... if he doesn't show up soon, maybe we should move to another thread...

[SIUYA 11]

Just taking the article as it states, do many people overcomplicate it when all they really need to do it the 3 cannons of preparation - that in fact do prepare the traders mind.

(and more my point that often this is simply just skipped anyway)

 

Eg; Emotional Security in Trading

How better to get some emotional security that trading is right for you by sitting and think it through, about why and how you wish to do it, then testing it to give you security that it really then should work based on your ideas. All the early testing should humble the ego - if it does not then denial might be something to look at.

If our trading habits are defined by our histories then as we cant change the history we need to change the habits.....often we cant change the habits so we need to change the ques and responses to those habits - best start is testing, logical thinking, test it and review to see where we a re weak and strong.

 

Separating the Objective from the Subjective

Test, review and record - become scientific. If according to Welz, most trading activityis sub conscious, then how better to reveal it - how better to see where our mistakes really are.

 

The Tendency to Ignore Psychology

By completing the three cannons - it should be apparent if psychology is stuffing you up, where you are stuffing up and maybe, just maybe then you have an insight into what to improve, and how to improve it.....it might reveal more than hypnosis.

 

....I guess it all boils done to prognosis of the problem first, and if its all just psychology then surely automation is the way to go? Is this the tool required?

 

...................

 

Ultimately if you think that many normal businesses fail because people either did not do the homework, did not do the market research, did not manage their money enough to survive early stage growth and learning difficulties - why is trading that much different.....just because its easy to press a button as opposed to order inventory that is tangible or charge clients for time worked......how many businesses get by on nothing but a gut feel, how many thrive on more than this....

 

Are we complicating the matter and then using a poor mindset to excuse our other failing of not doing the basics?

 

..........

FWIW - fascinating program on BBC Horizon - the creative brain how insight works well worth watching for those interested...... separate but related topic about how easy it is to change the way the brain works. It can be as simple as changing our daily routines processes, meditation and exercise to let the brain wander and switch off the controlling logical part of the brain just for a while.

 

BBC iPlayer - Horizon: 2013-2014: The Creative Brain: How Insight Works

 

Probably not available everywhere.

[SIUYA 11]

I like maxims that don't encourage behavior modification

[zdo 20]

I like maxims that don't encourage behavior modification

What does that mean?

 

 

 

Just taking the article as it states, do many people overcomplicate it when all they really need to do it the 3 cannons of preparation - that in fact do prepare the traders mind.

(and more my point that often this is simply just skipped anyway)

 

 

What percentage of people do you think can really do these 3 ?

 

Thanks.

[SIUYA 11]

I think everyone should be able to do all three.

If you cant develop some plan, test it and then review it then you really probably need help and certainly should not be trading.

No body says it needs to be done to really high degree, but my guess is the real percentages of people who do it is low, or the effort is really low, and without some real thought or effort.

Every profession probably has some base foundations - if you view these as such for successful trading then some competence would clearly be required, but for the sake of the thread - actually doing the process of really attempting these would likely be a good way to train the mind for a trader. We all know slowing down and thinking helps, practice helps, testing helps.

Obviously some people will do better attempts than others, and get more value out of various aspects, and maybe the downside is that people get too perfectionist about it....but i would still imagine that the issue is in doing nothing as opposed to spending time and effort attempting it.

 

(In a similar vein of thought - art - what is art, etc.....i spent a few years collecting, learning, attempting a bit and really thinking about the Q: What is art. - for me it is a simple explanation that can be expanded upon, but the first thing that is required is the doing of it. Only then can the creative mind come out in an artist....

How many times have people looked at something and said - i (or my child) could have done that! - when in reality, they have not taken any classes in technique etc, really have no idea of the development (of the artist) and context (socially) to get to this final stage, and if they tried would likely find they cant do it expect by copying it in hindsight. How often does and artists work seem out of place with our view of what society was like at the time - often these guys are far ahead because they are not overnight sucesses - and maybe the % of sucess and failure is similar to trading)

[DbPhoenix 42]

thinking helps

 

Yes, it does. Unfortunately . . .

[zdo 20]

SUIYA,

re "I think everyone should be able to do all three."

 

percentages ??? ..so are you basically saying that 100% could "think" their way to trading success?

 

Thx.

 

zdo

 

 

 

 

 

 

 

 

 

ps

"I like maxims that don't encourage behavior modification"

:rofl:

You're on a boat, on a narrow river, in a deep allegorical valley.

Overhead between the cliffs you see a white horse jump the gap and then it's gone.

Astonishing! Where has it gone?

You contemplate ... you “think” about why you got into the boat...

You hear the expanding sound of rapids ahead.

Just before the waterfalls, a she wolf jumps into the boat and attacks your neck.

You break your paddle over its head...

[SIUYA 11]

SUIYA,

re "I think everyone should be able to do all three."

 

percentages ??? ..so are you basically saying that 100% could "think" their way to trading success?

 

Thx.

 

zdo

 

Now you are word twisting Zdo.....

 

take out those completely mentally ill or incapacitated.

 

Everyone be able to at least complete the necessary building blocks and think about some simple elements with regards to how they think they are going to make money in the markets. How the markets might work and how they will profit from it. How they might test this and then how they might review the real and tested results.

Its not that difficult - there are not necessarily a lot of difficult concepts to grasp, not a lot of mathematical formulas beyond the simple.

This alone will not make them a success, but I am sure it will help develop their traders mind to a far greater extent than the current - push the button and hope attitude of some.

Unfortunately not everyone is going to be a success the numbers dont allow for this.

 

It requires more than thinking - however it seems most people dont want to do either, the work to see if their thinking has any validity OR the even the thinking is too much of an effort.

[zdo 20]

SUIYA,

 

This time , I wasn’t trying to ‘twist words’ or even fret you … and …

 

Ok, I will accept laziness as an ‘explanation’ above those three thinkings for why most traders fail…but …

… I don't find that either of these really address the real issues of ‘trading psychology’ …especially for the small subset that is neither (initiatlly or subsequently) lazy nor dumb

 

… also, most posts on the subject seem to actually be intent on inhibiting awareness rather than raising awareness … deactivating connections to it… etc.

 

zdo

 

 

 

 

 

 

 

 

 

 

 

 

 

:doh:

more ps

"I like maxims that don't encourage behavior modification"

 

…

Just before the rapids and waterfalls, a she wolf jumps into the boat and attacks your neck.

You break your paddle over its head.

The boat capsizes.

You grab onto the wolf’s tail.

That helps you barely swim to shore just before the class 5 rapids

...

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Most people think they're being much more clear than they really are.

That’s real subtle Sdoma. Thanks a lot. :rofl:

[SIUYA 11]

Ok, I will accept laziness as an ‘explanation’ above those three thinkings for why most traders fail…but …

… I don't find that either of these really address the real issues of ‘trading psychology’ …especially for the small subset that is neither (initiatlly or subsequently) lazy nor dumb

 

… also, most posts on the subject seem to actually be intent on inhibiting awareness rather than raising awareness … deactivating connections to it… etc.

 

 

Probably...

Given they are finding that the brain can re-learn/change/adapt really quickly with very small events and actions that can alter how we perceive things, so I think if you then want to address the issues of trading psychology after these basics have been attempted then fair enough.....You will then be more likely to discover or diagnose what the real issue might be and then offer a solution to fix it.....(be it mother issues, fear of destitution, fear of failure in front of others, inability to run a profit.) Plus in doing the exercises I would think that they would help train the brain with some positive trader awareness so that certain issues might be lessened, or strengths and weakness truely revealed.

 

So yes, while many things/posts might inhibit awareness, its also the lack of doing the basics that really inhibit the awareness for many.....after that then yes, whole other levels might be investigated.

 

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To take things to another level, wouldnt you then need a specific issue a trader might have, otherwise its hard to talk about it except in general terms.

I think most Trader psychology is normal human behaviour - in general terms it can be reasonably summed up as

- a general inability to accept uncertainty accompanied by a desire to think that you have more control over things than you really do.

 

After that well I guess it then becomes more specific to the individual.....but how then do you diagnose that?

 

what specific behaviour modification or training do you think can be used, or should be discussed.

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as fro maxims --- “Why should I have to WORK for everything?! It’s like saying I don’t deserve it!”