Trading Psychology

Just going to share with some of you an email I sent my followers earlier today

Hi Guys

First off I want to apologise in advance about the format of this email, but when we fixed the automated email software it seems we have created a new problem about the formatting in the background and this should get resolved in the next 72 hrs. Just didnt want you thinking a 3 yr old wrote the email! lol!!

I had a few people really interested in the last couple of spaces that came up but unfortunately I pressed delete on 3 of those emails instead of clicking reply!! So therefore Im mailing out again to give those that do want these spaces a chance to get back in contact with me.

While im writing this email I am going to share with you a chart that I had a discussion with a friend last night about why it was doing what they were hoping for, and I put this down to not looking at the bigger picture and allowing them to get confused and manipulated by the lower timeframe charts which adds alot of emotion to the trading as you sit and watch the charts all day and seeing it go against you can feel rather painful. The you watch as it goes in your direction after stopping out and jump in again only for it to reverse and kick your ass once more! For those that have a problem with emotion you need to cut out the screen time, look to bigger timeframe charts, set the trades and SHUT DOWN the pc and come back in the evening to check on them. If you dont do this you will continue to be killed in the markets.

This is the chart CAD/JPY that I want to look over, on a weekly timeframe it is bearish with the H & S pattern, broken neckline....BUT now on a daily timefrmae we have a double bottom, with a pullback and we are currently attacking the neckline of this double bottom. Ask yoursef a real question......where is a good idea to be thinking short of this pair?? Here is just OK with a fairly tight stop loss, but im sure like me if you look closer you can see 2 potential better areas to think short....Here is the Weekly view of this chart https://clip2net.com/s/3whMndk and here is the daily view https://clip2net.com/s/3whNpnP

Just a little food for thought to all you traders out there struggling with emotion and psychological attachment to the markets.

Hope this helps

Little John

Sounds good but I think I might be blowing a few accounts doing that on M5 😀. Personally I've found the books, interviews and anything else I can get my hands on involving Mark Douglas (RIP) a great help when trying to understand the human side of trading. What a shame that we are always and without fail the weakest link.

I dont understand meaning blowing account son 5 mins charts. A tight stop loss doesnt mean trading off a 5 min chart. The above post was to tell people who couldnt handle the emotional side of trading to trade the longer term charts, IF you trade these charts you dont select a stop loss on any other time frame than the daily chart. Every timeframe has its bias and I can be long on a daily chart and someone else short on a 5/15/60 min chart and we can both be right

chrish9070 posted:
I dont understand meaning blowing account son 5 mins charts. A tight stop loss doesnt mean trading off a 5 min chart. The above post was to tell people who couldnt handle the emotional side of trading to trade the longer term charts, IF you trade these charts you dont select a stop loss on any other time frame than the daily chart. Every timeframe has its bias and I can be long on a daily chart and someone else short on a 5/15/60 min chart and we can both be right

I was talking about walking away for hours on end, a poor attempt at humour.

If you can't control the emotions my advise to all new traders is to stay away from trading until you manage to control them, otherwise it would be a waste of money.

If you are a chain smoker, quit, after you have mastered to control the anxiety side then you can go back to trading.

I agree with Chris, the longer term charts are not so erratic as the shorter ones, which allows the 'emotional trader' to set his trades and step away from the screen.

SullivanPratt posted:
If you can't control the emotions my advise to all new traders is to stay away from trading until you manage to control them, otherwise it would be a waste of money.

If you are a chain smoker, quit, after you have mastered to control the anxiety side then you can go back to trading.

I agree with Chris, the longer term charts are not so erratic as the shorter ones, which allows the 'emotional trader' to set his trades and step away from the screen.

That's a bit harsh isn't it? :) So if you can manage to quit smoking all of a sudden you're gonna be a gun trader, sorry but laughing my ass off here. That's an absolute load of garbage.

The other thing I've got an issue with is time frames. So many of you guys say get on longer time frames and the psychology issues go away. Of course they do, you step away from the screen hoping and praying trades go your way. That's not learning to deal with emotions, that's side stepping the issue completely. It's just my opinion but there's nothing like sitting in front of a screen and learning to deal with whats in front of you minute by minute and learning to stick to a set of rules. By walking away you will never, ever do that and always will be trading on hope. The best of luck with that one.

shorter time frames are nothing but noise,used as an entry point for a longer time frame move,1hr and 4hr charts as used by professional traders since day one everyone should know this basic stuff.If your scalping on 1min time frames your moving in and out of positions quickly on your experience and skills not on a strategy.The psychology does not disappear by using longer time frames,but you do get a better sense of direction and do catch bigger moves,If you do not watch your trades you are doing so at your peril and will learn nothing.That does not mean looking at your screen every minute,you have your stoploss set and a limit if you expect a short move.You cannot let emotions play a part in your trading,cut your loss quickly this helps to detach from your trade or you will kill your account with large stoploss.It might take 2 or 3 times to get it right with small losses,sometimes right first time.I don't know what smoking has to do with trading?

I agree with most of what you say Keiran but I can't agree that all lower time frames are just noise and a strategy cannot be built around them. M1 fair enough, I have no idea how anyone can consistently beat the spread let alone make a profit. We trade nothing but M5 and have done so for the last 18 months but even so I don't consider us scalpers, some of our trades will go for a few hours. We've built a good and reliable rules based mechanical system around M5 and M15 over the last 3 years so it can be done although I do appreciate that for anyone just starting out higher time frames are less stressful.

flipper58 posted:

SullivanPratt posted:
If you can't control the emotions my advise to all new traders is to stay away from trading until you manage to control them, otherwise it would be a waste of money.

If you are a chain smoker, quit, after you have mastered to control the anxiety side then you can go back to trading.

I agree with Chris, the longer term charts are not so erratic as the shorter ones, which allows the 'emotional trader' to set his trades and step away from the screen.

That's a bit harsh isn't it? :) So if you can manage to quit smoking all of a sudden you're gonna be a gun trader, sorry but laughing my ass off here. That's an absolute load of garbage.

The other thing I've got an issue with is time frames. So many of you guys say get on longer time frames and the psychology issues go away. Of course they do, you step away from the screen hoping and praying trades go your way. That's not learning to deal with emotions, that's side stepping the issue completely. It's just my opinion but there's nothing like sitting in front of a screen and learning to deal with whats in front of you minute by minute and learning to stick to a set of rules. By walking away you will never, ever do that and always will be trading on hope. The best of luck with that one.

😲

flipper58 posted:
I agree with most of what you say Keiran but I can't agree that all lower time frames are just noise and a strategy cannot be built around them. M1 fair enough, I have no idea how anyone can consistently beat the spread let alone make a profit. We trade nothing but M5 and have done so for the last 18 months but even so I don't consider us scalpers, some of our trades will go for a few hours. We've built a good and reliable rules based mechanical system around M5 and M15 over the last 3 years so it can be done although I do appreciate that for anyone just starting out higher time frames are less stressful.

If 5min works for you great,experienced trader can operate in any time frame,I think a way of getting around the stress at low levels especially for new traders,risk very little until you become sure of what your doing.

Frankly I feel much more nervous when I trade the longer time frames like the daily and weekly ones, because I am always anxious when I have a position open. The longer it stays open, the more anxious I become. I prefer opening and closing positions the same day, when it is possible, which is why I follow mostly the 4-hour and the 15-minute time frames.

Trade what you feel comfortable with,if that's daily or weekly.If you feel anxious you are doing something wrong,too big a position,too much risk,not knowledgeable of the product etc.

snapdragon1970 posted:
Trade what you feel comfortable with,if that's daily or weekly.If you feel anxious you are doing something wrong,too big a position,too much risk,not knowledgeable of the product etc.

Absolutely spot on. If driving too fast scares you, slow down!

I feel comfortable with trading the long time frames, I think that they are more predictable

idimitrov posted:
I feel comfortable with trading the long time frames, I think that they are more predictable

Absolutely agree with you!

I try different indicators and when all are presenting the same signal I open my position! sometimes the indicators show different signs so I just wait! 😀

snapdragon1970 posted:
Trade what you feel comfortable with,if that's daily or weekly.If you feel anxious you are doing something wrong,too big a position,too much risk,not knowledgeable of the product etc.

I agree, I have been practicing on the shorter timeframes for about a year now (M1>M15) and have been able to learn a lot more about chart patterns and market movements just by sitting in front of my screen and simply watching my trades just as if I were trading a larger TF (1Hr>Daily). You learn to overcome your emotions faster after consistently watching these TF. To each is own, just my own experience as a trader.

How reliable are the signals on the 1-minute frame though?

mlawson71 posted:
How reliable are the signals on the 1-minute frame though?

the timeframe exists on the charts for a reason. As I said to each is own but give it a try and see for yourself.