Psychology of trading

[lcredd]

Any thoughts on how your mental state affects your trading, how you can improve/maintain a positive mentality, how to notice when you're on 'tilt' or prevent it ???


I only mention this now as I have been and possibly still am on 'tilt.' I've had a consistent 3 month spell, but this has been a bad week. And I know it's my fault! Letting bets go in play, and not taking small losses have cost me this week. The feeling of being in control has gone and my losses have been getting bigger.

Don't be a pr*ck for a tick is the golden rule!
Any others?

[Portman]

For my little esperience this is a particular period of the year for horse racing: very few races, a lot of traders remained behind with programmed returns (also me), and sharks hungrier than usual. The serious season begins now in March.

[shadowninja]

Ouch.

Look at why you break your rules. Talk yourself out of the concerns. Perhaps it's because you're desperate to make losses back quickly. Perhaps it's anger causing you to try to "get revenge" on the market. Perhaps it's the fear of missing out as the opportunities/setups you're looking for are infrequent.

[lcredd]

Thanks SN. I've been taking it too easy and not concentrating, and instead of taking a quick loss and then trying to make it back I've just let it run. A few big hits have really hurt the bank. I've been lazy and suicidal (not literally ). Lower stakes today, hoping to break even and get my confidence back.

Happy trading all

[shadowninja]

You need to learn to accept a small loss before it becomes a big one.

[shadowninja]

stuff

I take it The Geek has given you permission to advertise everywhere... otherwise you might as well stop typing because he'll delete your account when he comes back.

[shadowninja]

No, not heard of you before. Sounds like a rival to Betfair? (Perhaps this discussion is better placed in a separate thread?)

[The Geek]

I take it The Geek has given you permission to advertise everywhere...

I have given consent for a limited amount of publicity as I think that competition in the exchange marketplace is needed to secure better value for the end user. { AKA for as long as Betfair own this marketplace, I suspect customers will continue to get butt raped at every turn. }

[shadowninja]

Sounds good to me. Competition, not bum sex especially not as a receiver.

[Caan Berry]

Read all these articles - http://www.ruthroosevelt.com/articles.htm

Forget the past and start over, any profit is good... even 1p, probably will just need to change your attitude on it all matey, forget past succes is one of the biggest ones.

[flok]

i examined my p&l at the end of a month and divided the total profit x30.
what have i found? that if i made a small amount day by day, at the end of the month i'd have the same profit that i have after many ups and downs, stress, losses and tilts.

try to think in the long run, i noticed that after a big loss i get other smaller losses cause i'm nervous, stressed, scared and i take more risks than normal.
i prefer by far +10-8+10-8+10-8+10-8+10-8= +10
instead of +100+100+100+100+100+100+100+100+100-890= +10

[shadowninja]

i examined my p&l at the end of a month and divided the total profit x30.
what have i found? that if i made a small amount day by day, at the end of the month i'd have the same profit that i have after many ups and downs, stress, losses and tilts.

try to think in the long run, i noticed that after a big loss i get other smaller losses cause i'm nervous, stressed, scared and i take more risks than normal.
i prefer by far +10-8+10-8+10-8+10-8+10-8= +10
instead of +100+100+100+100+100+100+100+100+100-890= +10

Yeah, agreed. It's annoying. I used to get that so stepped aside for a couple of months to review what I was doing. No more -890s!

It wasn't so much that I couldn't make it back as I would grind it out but it's the fact that I could lose a week or more of work in the blink of an eye.

[dvwooly]

i have a pdf of a famous ebook that is all about trading in the zone if you would like me to email it to you.

PM me.

Basically you need a concrete entry and exit point, follow the signals 100% everytome, if you lose so what, if you have an edge positive probability of positive returns) the large sample size will mean you show a profit overall..... a bit like a casino

so get stuck in, same method everytime and becasue of the sample you should win. If you lose after 1000 bets chances are your method isnt sound.

Problem is sticking to your method 100%. If you done you will cut profits early and let losses run.

One way to help is to hedge 30% of your stake at a couple of ticks way, that means you can relax a little more and it will need to go back a longer way for you to lose.

[lcredd]

Thanks for the advice. Gotta love the forum!

My problem was I was breaking my own rules happily, taking stupid risks with large stakes. Only after the losses mounted up did I realize how quickly things can go wrong, and why it is so important to stick to your own way of trading on EVERY SINGLE TRADE.

Yesterday I was more disciplined, but there was the odd error.

I have read a couple e-books and it's very helpful, so long as you stick to the advice. Kamikaze is not a trading style I'd advise

[MAB]

opps.....sorry shadowninja (you we're probably right about moving)

my post about oddsfutures not being competition to betfair (but being part of a trading ecosystem) was deleted by a mod based on my misunderstanding of the links policy .....but thanks for reinstating me to the Geek.

Unfortunately my comments on "adverse selection" are also gone.........(so without this time a Tourette syndrome promoting of links to oddsfutures)

the problem of this behaviour in relation to a reaction to market events is something known in market theory and economics as "adverse selection" (ok mods this one is to wikipedia )

So your appetite for (taking additional "get out") risk is positively correlated with your (fear) of risk of loss. Meaning in simple terms you feel you have to keep digging.

What i was trying to get across is that we feel oddsfutures totally new concept of "trading odds rather than trading bets" is one that gets you out of the hole, particularly if you hold the futures contract before you make the bet.....hence more futures traded = more bets