Trading ... Trader ... AND I ...

"This whole LIFE ... Including Trading is more about "I" than anything else"

There is a UK company, which had conducted a survey across continents about ONE SINGLE WORD ... that a person uses MOST / MAXIMUM throughout the LIFE and after 3 years of study, they found and concluded that, cutting across Boundaries, Race and Ethnicity, Religion, Age etc, "I" is The WORD that every person uses MOST in their LIFE ... but still "I" is the most under stated ... Misunderstood ... wrongly pronounced word.

With purpose that I'm using word for "I", instead of just a letter. I has Thoughts and Feelings, Values and Ethics, Likes and Dislikes, Needs and Wants. Having so much INSIDE, "I" can not be JUST A LETTER ...

My Mentor Ayn Rand said "To say 'I love you' one must first be able to say the 'I.'"

We also know the Age Old ... Sage Old "Aham Tatsat" and "Aham Bramhasmi" ... I'm The Absolute Truth"

But still, "I" happens to be the most Under used, under utilized De Facto ...

Please understand that, I'm neither a Neurosurgeon or a Psychiatrist to talk about left and right side of the brain or mental aspects here ...

This Thread is more about the Journey "I" had and have as an Individual in General and Trading in particular. How "I" influences most of the decisions, how actually "I" should be in the fore front for trading etc. ...

Apart from my own experiences, I will also use quotes, notes and articles, who have helped me grow up. Please do not ask me the authors, whenever I use others' quotes and articles. I have read, gone through so much references that I might not remember all of them, except my Mentor Ayn Rand.

"Trading is more about The Psyche of the Trader than anything else. PA, FA, TA, MM, ED are all accessories to discover "I" part of trading decisions"

Thanks... .Looking forward to your thread. :thumb::thumb::thumb:

What is Trading? .... Buying and Selling ....
Who does the Buying and Selling? ... The Trader ...
Who is the Trader? ... I'm The Trader ... This is why "I" is more important aspect of trading ...

Where to Buy and where to Sell? ... Buy at Low and Sell at High ....
Who Judges / Analyses Low and High? ... I Judge / Analyze Low and High ... "I" again ...

Where to Exit ... What is Bought and Sold? ... Nearest Resistance and Support levels ...
Who Judges / Analyses Nearest Resistance and Support Levels? ... "I" again ...

What Lot sizes, Equity allocation, MM, Exit strategy ... You choose One Question / Doubt ... Finally it is "I" in answer all over again in the Process ...

As DSM rightly said, in any trading strategy that one follows, it is the "I" which is more important because, otherwise, the respective Trader will not have confidence either to Trade or to wait for profit after taking the Trade ...

Therefore, if "I" is The Most Influential Factor in all Strategies, what about Emotional Discipline? If "I" does not control the emotional (Greed and / or Fear), who else does? ...

There is a famous Shloka (saying) in Sanskrit - "As the Rivers, flowing East or West forget that they are different, when they Merge in the Ocean, we can also become One with the God, if we forget that we are different from him"

In the same way, if we remove the distractions, if we remove doubts(more of self doubts) ... Trading will be much Easier and Profitable. Ask yourself, if there is any other business, other things being equal, easier than trading? ... You read it RIGHT ... TRADING IS EASY

While learning to drive a car, most are terrified about using two legs for three operations. Once we learn to drive, we won't even know that ... RIGHT? Why? NO DISTRACTION ... Basic aspect of driving is taken care at Sub Conscious level and Conscious Eyes and hands take care of the rest. What else we need for trading? Basic things at Sub Conscious Level and Eyes and Hands again to trade ...

Thinking too many things ... Having too many distractions ... makes Trading complex. Do not think too many things. Most of the times, FA and TA themselves contradict each other and confuse us. Take GBP for example today. With regards to the Scotland referendum, most of the Pundits argued that if Scotland stays with Great Britain, GBP will head North strongly, minimum by 400 Pips. But, what did market do? Pushed GBP pairs down the barrel ...

Thinking about too many things, contract notes, ROI, points to be earned, converting points in to Re, EOD, different analysis in the forum that one reads through, next door Warren Buffet's advice, too many indicators, where in even the actual price is roughly visible, too many indicators / things to fall in line to trade ... If one is distracted so much, how can ONE be with the Market? If a Trader can not be with the Market, who trades and how to Trade? Who removes all these Distraction? It is The Old and Gold "I" again ...

"Remove all Distraction ... Be ONE with the Market ... Be The Market ... There is nothing simpler than Trading ... For this happen, I should be The Trader"

Why are You Trading?

One of the most important and often overlooked questions we must ask ourselves is “Why are we trading?”
The most obvious answer would be the unlimited upside for potential income.

Not everyone trading, is motivated by the financial potential. The answers can actually be quite varied. For most traders I’ve met, it is the idea of control. Control over your own financial destiny and freedom from the “rat race.”
There is no arguing that a full time trading vocation has many advantages. I saw the income potential of the market, but that was not my primary motivation. For me, after being in Corporate ladder, getting green pay cheques and the getting (in)famous Pink Slip (due to 2006 global recession), Trading not only offered me the life style I was used to and also the Absolute Control on my Life, without having to report to, not having to Compete with my colleagues, employees, and client idiosyncrasies. Working from home also was appealing.

The current state of the global economy has created more urgent reasons for many people to enter the trading foray – unemployment and/or lack of job security and loss of capital or ROI via mainstream institutional options. It is no longer prudent to rely on traditional templates and models for employment, retirement and investing. 25 years of careers and generous retirement benefits are a thing of the past. Through the current failures and of those possibilities and institutions, a new explosion of self-investors has emerged.

The reason you are trading will have a direct effect on your trading psychology – the more urgent your need for income, the more haphazard your approach to the market. If you are in “survival” mode (needing immediate income to cover daily living expenses) you are going to struggle. Your decision making will be motivated purely by emotion. You will be too focused on the outcome, not the process. This is a recipe for failure. You will behave irrationally and erratically with every tick in the trade. You will not be able to overcome this challenge until you find a steady source of income to satisfy your immediate needs. Only then will you be able to focus without this overwhelming and stressful distraction.

If you have adequate income for expenses and to invest, your approach will be more tranquil because you can afford to lose the money. This can be detrimental as well because you will not be compelled enough to totally commit and your view of trading will be one of folly. Money lost can be easily replaced, so why worry about really learning the skill of trading. You view this “investment” as you would laying down cash in a casino throwing dice at a crap table or playing blackjack; simply for the fun of it, to see if it works, with no real expectation of a meaningful payoff. If you can afford it – great. But I maintain it is no fun wasting or losing money.

The other trap is to view trading as a part-time endeavor. Except the Attitude, there is nothing called as part time. We all have to start somewhere before we can transition to trading full time, time wise, Attitude wise – that’s a given. But the perception that trading only part time will lead to the consistent success and return we seek is a fallacy. This perception also sabotages the maximum commitment required to learn the skill of trading and prevents us from doing the necessary work needed to truly become proficient in the market. Think of your current job or primary source of income and imagine performing it part-time. For most of us that idea would make no sense at all. So whether you ultimately make it or not, your goal should be to become a full time trader. This is the only way you can be thorough and focused enough during your trading journey. It will keep your mindset professional and mature.

It is important that you ask yourself the question and then answer in terms of the present circumstances of your life. We all know that the ultimate reason is for money, but your current underlying reasons and intent will manifest themselves in your results – and this will be our constant reality check as we measure our progress.
Do an honest assessment of your current situation. Make sure your trading resources, approach and goals align realistically with your availability and life style. If not, you will be making this harder than it already is and adding unnecessary time and frustration to your learning curve.

"Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver"

Looking forward to this thread .A great start already :thumb:It’s bound to be exhilarating, with the lineup of participants you already have .Thanks a lot.:clapping:

A story that I read somewhere to start with ….

Jack is a professional trader.
He makes all his money trading by trading. He has been trading for five years.
He is patient, disciplined and, in his trading, he is fearless.

Meet Tom:
Tom is a newbie.
He barely manages to break-even with his trading. He has been trading for six months.
Tom takes unnecessary risks as he is undisciplined, and he panics when he takes a trade.

Let’s imagine we have a super profitable system. On paper, traded mechanically, this system has an average of seven wins from ten trades. Now, let’s imagine we give both Jack and Tom this method and they trade it.

What do you think will happen?

Jack will take the system, take the trades, and make a lot of pips. In fact, Jack will probably improve the efficiency of the system and bump it up to eight winners out of ten.
Tom will take the system, take the trades, and pretty much screw it all up. As I said, trading it mechanically will give Tom an average of seven out of ten winners. However, Tom will be lucky to get five out of ten winners.
Why does it work this way?

It all comes down to two things; psychology and experience.

There is n’t much you can do about experience. So let’s take a look at some of the dangerous psychological pitfalls. Hopefully, after reading this, you will be able to see them coming and stop them, before they destroy your account.
4 Psychological Pitfalls
1. The Desire to be Rich … OVER NIGHT
The desire to be rich manifests itself in many ways. The main ways are fear and greed and they inevitably lead to other problems. If you think about it the majority of the issues newbie’s have stem from the desire to be rich. Things such as:
1.Over trading

2.Poor money management by risking too much
TRADING will not make you rich in the short term. It will likely take years before you’re trading well enough to leave your day job. TRADING is a career and in the long run, if you’re successful, it can give you a very relaxed life. However, if you started trading last week and you plan to quit your job in six months, because you anticipate being rich enough to buy a Ferrari, you are delusional.

"Trading is a career (a seriously profitable one at that), not a scheme". If you want to be rich quick hit the casinos. You have a better chance of winning there.

2. Fear of Losing
From a young age, we are taught that money is important. That without money you have no real value. We are conditioned into believing, that to be successful when we grow up, we must have lots of money. This in turn causes people to be afraid of losing money. This is because the reverse is also true. If you lost money then you are a failure as it is the opposite of making money. This in turn leads to some newbie traders being afraid to pull the trigger and actually taking a trade.

Some newbie’s trade demo accounts for two years, never summoning the courage to open a live account. Some newbie traders with live accounts panic whenever they enter a trade and, in turn, make rash decisions.
Take a look at people like Richard Branson, Donald Trump, Alan Sugar and Warren Buffet. These guys are all billionaires (or close enough to it) and each of them has failed many times. Richard Branson has spearheaded many failed ventures. Did those failures set him back though? Hell no! The man is going to start flying people to space at $200k per head, next year, with Virgin Galactic.

I think losing some money to the markets is actually beneficial. It teaches you some very important lessons, if our eyes are open. What is damaging is the fear of losing money. The fact that you think about it puts you at much greater risk of it actually happening. You have to trade with a positive attitude. So get rid of those fears and worries, they will not do you any good.

The truth is you are going to lose money to the markets, it’s unavoidable. Every professional trader has lost money. Not every trade will be profitable. The market simply does not always work in your favor, and there are times, especially as a newbie, that you will be stung. If you end up blowing your first live account… so be it. As long as you pick yourself up and try again, you will be a better trader for it. I blew 13 accounts and 7 credit cards before I started trading profitably and consistently.

“It is not important how much one makes or loses. What is more important is HOW one earns or loses. The Process of earning or losing is The Deciding Factor”.

3. The Need to be Right
This is a good one. Tom opens his platform and enters a dumb, baseless, long trade. He targets 100 pips and has a 50 pip stop loss. The trade goes against him immediately.
It goes down, first ten pips, then twenty pips, and then thirty pips. When it reaches forty pips, Tom decides he doesn’t want to lose another trade and moves his stop loss down.
The price keeps falling and Tom continues to move his stop.
100
120
150……
Eventually Tom closes out his trade and he has lost a huge portion of his account.
Tom was not able to accept that he has taken a losing trade. He kept pushing the stop down in the hope that it would eventually turn around. The need to be right is an account killer.

4. Being Undisciplined
I saved this one for last because, even though it is one of the most common and dangerous pitfalls, it is rarely discussed. A trader who lacks discipline can never make it in this business. Many traders are guilty of lacking discipline for many different reasons.

The main culprits are what I like to call ‘System Jumpers’. These are traders that are constantly tweaking and changing their trading methods. These traders do not realize that learning to trade a system efficiently takes time.
System Jumpers are traders who lack the discipline to stick to, and learn how to trade, a system. They try it for a week and when it doesn’t work they jump to the next system or method.
Another common action of an undisciplined trader is abandoning a perfectly good trading method. Every trading method has periods in which it performs below average. No matter how versatile a method is it cannot perform, at peak efficiency in all market conditions. A true trader has the discipline to stick it out through the hard times.

“Trust yourself, not the system … Eventually you will start winning more than losing”

ATTITUDE AND ALTITUDE

There is an old saying from the self-help and sales guru Zig Ziglar . . . “Your attitude will determine your altitude.”

The following is an abridged version of my notes from a presentation by BJ Nash – Mind Mechanic.
BJ specializes in helping traders overcome psychological challenges. I have taken the liberty to add and/or emphasize some of my own observations in context along with BJ’s insights. Here is the gist . . .
We all share something in common – we all want to change – to become something we currently are not – to aspire to something we think is better than where we are.

How do we get there? What is the difference that makes the difference?
How can two people do exactly the same thing and have such difference results? How can one be hugely successful and the other struggle endlessly? It is one single thing.

“Whatever you think about, with belief and emotion, will manifest itself in your action and behaviors”

The problem is that we often do not take the correct steps or we take the correct steps but in the wrong order. Either way, we sabotage ourselves.

The steps we need to take are
1. Desire – our desire must be intense.
2. Belief – What you can conceive, you can achieve.
3. Action – Put Desire and Belief into Action.

Action is always the last step – it is never “Fire, Ready, Aim.” It only works in one sequence – “Ready, Aim, Fire!”

Think for a minute about two sales people. One has great success and another has none. Let’s assume that their approach and techniques are virtually the same. What determines their results? It is their own beliefs and attitudes. To a person that is persistent, rejection means nothing. To another, it may be totally defeating.

One thing that high achievers have in common is that they are typically open minded – able to receive and accept new ideas – in other words, a balanced ego; a burning desire, confidence in their beliefs, but a willingness to accept ideas that may improve the path toward reaching their goals. They realize that modeling after someone that has achieved the level they desire can help them get there. As a result, they are willing to surrender a degree of their psyche toward humility and acceptance. They are willing to admit that they do not know everything and being right is not always important. They stop becoming defensive and become receptive. Add this attribute to being prepared both strategically and psychologically, and you have a formula, an attitude, for success.

The biggest motivators for most of us are either inspiration or desperation. We procrastinate because we experience less pain than if we take action. Ultimately, not doing the thing in a timely manner becomes so painful that now we must do it! We are forced to avoid additional pain and consequences by getting it done in a frenetic and desperate frame of mind. Pain avoidance is a biological survival mechanism. Our brain will fight us unless we can re-program our pain/pleasure associations.

ARE YOU On a diet? You need to associate more pleasure with a salad or healthy foods that with a Cheeseburger. Fearful when you place a trade? You need to associate pleasure with following our trade plan and rules and associate pain with impulsive behavior.

You need to think about the opportunity cost of not changing these associations and limiting beliefs. What will the cost be if you continue to drag these self-destructive associations around for years and years? Think about the opposite. What will be the outcome if you commit to making the changes required? Which destiny are you committed to living?

Imagine a future where you took action, made the changes to your behaviors and realized the results.
Now come back to the present and realize you have the opportunity to make everyone of your goals and dream a reality through staying motivated to take action and following your trading plan.

We need to make it more pleasurable to think about and do the things that will get us where we want to go; and more painful to not do them. Make a list of the greatest consequences of not making the changes (For example – no money, failure, desperation.) Then, make a list if the results that will inspire you to make the changes (For example – debts paid off, happiness, success, financial security.)
Keep these lists in front of you when you are trading. Read both of them when you are tempted to violate your trading plan and imagine the results, and make the results as real as you possibly can, because ultimately they will be.

Fear and anxiety are nothing more than you saying to yourself the things you don’t want.
Being a successful trader means being strategically and psychologically prepared.
Think about the outcome you do want and you will take pleasure in taking the steps to get there.
That is the attitude required to be successful – the attitude of a winner.

“Lots to think about and lots to put THAT LOTS OF THOUGHT into action”

An eye opener for all wannabe traders!
This is some seriously good stuff - Thanks a lot for sharing!
Cheers!

Thanks Galts Gulch,
pl continue this excellent reality based thread.
Thanks for sharing ur true knowledge.
Regards
oilman5

The Art, Science and Power of Saying NO …

How many of us … How many times … Have felt
1. I should not given this commitment, though I knew I could not keep up
2. I should not have promised to attend this … ceremony / festival … as I can not get leave …
3. I should not have accepted that proposal .. Where do I get time for that?

Under different circumstances … With different people … for different reasons, we tend to budge, obey, accept few … requests … orders … invitations … proposals, though we are completely aware that we will not be able to stick to that acceptance and we will be right about that …

But still, we keep doing the same thing all over. WHY? Few times, emotions and feelings, work obligations, inferiority and superiority, guilt that others might mistake us … Reasons can be so many … But The Result? SAME ALWAYS ALL WAYS … We will let us ourselves down … again and again … Carry the blame again and again … Why carry that emotional baggage and burden?

The reason is the way we are brought up … The way Illusions and Pretensions are forced on us, sub consciously.. that Others and their acceptance and / refusal of us is very important … That we always have to respect that wish and will of our relative, neighbors, colleagues etc … Am I not part of that so called Societal Structure? Why “I’m being sacrificed to please others?

Have we not seen (in most of the Grand Hindi Movies) … a grandmother or a mother advising a daughter or granddaughter that women always sacrifice for men, being a daughter, a wife and a mother and that, this in justice will not happen to her … Is not that same for Men as well? Do not we need to listen to our parents first, then wife and children just before dying … If we keep listening to others whole through our life, WHEN DO I LISTEN TO I? We have time for office, relatives, wife and children. WHEN IS THE TIME FOR “I”, JUST BEING “I”, understanding and feeling “I” … If you are not happy, being you, with “SELF”, how will you be happy with others? If you do not respect what you are, how will you respect others?

"Say NO ... to all that You can not DO ... to all places where you can not travel to ... and all that you can not keep up with ... YOU WILL BE AT PEACE"

Why is this philosophy important for Traders? How is this related to Trading?

How many times, have we taken a Trade and later cursed ourselves that I should not have taken this … I knew I should have waited … How many times did it happen that we allowed a loss making trade run beyond the SL / or altering SL and then “OHHH … I should have trusted my judgment in the first place … I knew this will go against me … How many times that we keep doing the same mistakes … Repeating same mistake and cursing ourselves each time …

Sit back … Relax … Take a break … Think … Analyze … Why those mistakes keep repeating regularly? Reasons will be different, but Method / process will be same … Lack of self respect … Lack of Discipline … Lack of Importance to “I” …

And why does this Happen? There is a difference between “I” and “Trader” … Make them ONE … Let I be The Trader, Let I be The Judge, not the indicators, not the strategies … Repetitions of the mistakes will be gone …

"Say NO ... Whenever you are not in right frame of mind to Trade ... When and If you are not sure of the Quality of a set up ... to Martingale strategy ... to widen the SL ... Repetitions of mistakes will come down ... Your loss making trades will come down"

"If You Think You are Right, You are RIGHT ... If You Think You are Wrong, You are RIGHT"