Profit streak or loss streak. What's worse?

The psychology of profit and the psychology of losses.
What will have a more destructive effect on further trade?
I believe that both scenarios will show equal pressure on the trader. In the case of losses, this can lead to depression, and in the case of gains, it will lead to overconfidence, which will further lead to losses.

I do think both have a big impact on the trader. Personally, I was more anxious, so I never really got into overconfidence, even when things go well. I think some of us are more prone to the depression while others tend to trade with their ego, so personality makes an impact here.

It will depend on our mindset, as human nature is greedy, want more and more, although already having a car then want to buy airplane, but actually don't want losing, in trading profit and loss is part and sometimes inevitable, but how to accept both as normal thing depending our mindset I think.

I agree with the opinion that the influence of these factors depends on temperament. But I also want to note that by analyzing your trading, regardless of the result, you can avoid such influence. An independent analysis will help to perceive any trade as an integral part of trading. Of course, I can also get excited and get a boost of confidence by consistently implementing a trading plan, but even with a profit streak, I try to look for opportunities to find flaws and improve.

Innately a losing run will be more impactful as humans are evolved to be risk averse and so this will be a huge stressor to most. However winning streaks can be problematic both ways depending on if you are under or over confident. The overconfident trader takes the good run of variance is the norm and believes they are deserving of the profits they make and are therefore more impacted when it doesn't go their way. The under confident trader may constantly be waiting for the bubble to burst and so will subconsciously change the way they trade out of fear and impact the natural variance that way.

Oh everything is not so clear. As a psychologist, I can say that it all depends on the temperament of a person. For someone, a profit streak will only inspire self-improvement, while for someone it will relax and he will lose his vigilance.

As a trader, I will say that it infuriates the same way. I am looking for a catch in the profit streak, and in the loss streak too. 😄😄😄

WhiteWitcher posted:
Oh everything is not so clear. As a psychologist, I can say that it all depends on the temperament of a person. For someone, a profit streak will only inspire self-improvement, while for someone it will relax and he will lose his vigilance.

As a trader, I will say that it infuriates the same way. I am looking for a catch in the profit streak, and in the loss streak too. 😄😄😄

Is there a chance that after a long profit streak, a trader expects a loss and therefore subconsciously performs actions that will lead to this?

MarcellusLux posted:
I agree with the opinion that the influence of these factors depends on temperament. But I also want to note that by analyzing your trading, regardless of the result, you can avoid such influence. An independent analysis will help to perceive any trade as an integral part of trading. Of course, I can also get excited and get a boost of confidence by consistently implementing a trading plan, but even with a profit streak, I try to look for opportunities to find flaws and improve.

Interesting way of thinking, and I've seen your posts where you profess to analyze mistakes and work with a trading plan. Do you think an excessive striving for perfection can backfire on you?

LesleyLesley posted:

MarcellusLux posted:
I agree with the opinion that the influence of these factors depends on temperament. But I also want to note that by analyzing your trading, regardless of the result, you can avoid such influence. An independent analysis will help to perceive any trade as an integral part of trading. Of course, I can also get excited and get a boost of confidence by consistently implementing a trading plan, but even with a profit streak, I try to look for opportunities to find flaws and improve.

Interesting way of thinking, and I've seen your posts where you profess to analyze mistakes and work with a trading plan. Do you think an excessive striving for perfection can backfire on you?

It certainly can, and did it. I'm really a big fan of post trading analysis and sometimes I find mistakes that were made because I made adjustments before. Such mistakes are probably the hardest to find and fix, because they appear where they are not expected.

But it is sad to let you know that many traders don’t practice on demo account that keeps them lag behind.

LesleyLesley posted:

WhiteWitcher posted:
Oh everything is not so clear. As a psychologist, I can say that it all depends on the temperament of a person. For someone, a profit streak will only inspire self-improvement, while for someone it will relax and he will lose his vigilance.

As a trader, I will say that it infuriates the same way. I am looking for a catch in the profit streak, and in the loss streak too. 😄😄😄

Is there a chance that after a long profit streak, a trader expects a loss and therefore subconsciously performs actions that will lead to this?

Oh, it is possible if you are like that on your own. That is, everywhere you look for a catch. I am not looking for a catch, I am not building conspiracy theories. I just trade. So for me it is unlikely.

It varies because every individual has their own different mindset. For me personally, loss streaks are worse. It does not only take away my money but my self confidence in my skills also falls with every loss.

Both scenarios profit and loss are detrimental to an unprepared trader.
And not only for the trader. For any person.
In the case of profits, this scenario may not be as fast as in the case of losses.

Psychology is a delicate thing. Everyone has a different mind.

In order to be resilient to this, I believe you need to learn how to invest a little bit, moving from less to more. But by no means the other way around. Otherwise, there will be a disastrous scenario for most unprepared investors/traders.

Investing little by little will teach you to put up with losses, and accept profits as something normal and correct.

Most people becomes unrealistic about trading and that’s why they can’t maintain the profit earning flow.

Forex is such a business that allows you to trade even with a handful of dollars. Your first journey with forex should be with small trading capital because it will help you learn even if you lose.

Usually profit streak makes a new trader greedy and he risks more and looses the whole money which he made from profit streak.

 Loss streak can make the trader believe that the strategy has failed and will not make any profit in future. So usually a trader throws away the strategy and searches for another strategy and usually this cycle continues for long time for few traders until and unless they realize that every strategy can have profit streak and loss streak as well.

So it is important to make proper trading decision during entry and exit of the forex market during profit streak or loss streak.