Trading Psychology


I am no expert in psychology. Just like all other traders, I went through all kinds of emotional troubles before finding my way to live with trading. Articles written on the subject are more personal experience than anything else.

I am a strong believer that by being knowledgeable enough in a subject (in this case trading), the emotional swings associated with the uncertainties will subside. The key here is not just knowledgeable in theory, but also fluent in applying the knowledge.

A good analogy is driving. You cannot drive a car by just learning it from a few video instruction sessions. You have to practice to get a feel how driving actually works. Better drivers do not necessarily driving cars many hours a day. It is the focus and the amount of time spent in fine tuning certain skills in driving that counts.


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Visualization of Trading Performance Progression

In the first part of this series, I have explained that majority of traders have a misconception of the way trading skill is developed over time. That misconception leads to wrong expectations from the progress in their trading performance. The wrong ...

5 comments


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The Misunderstanding Of Trading Skill Development

Many people have learned that top day traders can make a lot of money. The idea of being able to day trade and forget about the markets by the end of the day is very sexy. It is also toxic like an addictive drug to most of the people who give trading ...

2 comments


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Having A Trading Edge Is Not Enough

Many aspiring traders who have a scientific or strong common sense background would arrive at the conclusion that if they discover an edge in trading, it is the answer to everything. They think all these psychology stuff on trading are not necessary ...

4 comments


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The One Character Trait That Predicts Trading Failure

Story At A Busy Pharmacy I went to this hospital pharmacy to pick up some special prescription. There were many people there. The place was jam packed. I thought it would be a very long wait. I was planning in my mind immediately on how to better sp ...

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Essence of Trading: How I Kicked A Bad Habit

I used to take seasonal allergy medicine religiously every year. At the beginning of spring, while people keep talking about how great the coming season will be, I would look allergy medication to stock up. It is not just a matter of inconvenience ta ...

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The Dilemma Of Fund Managers With Large Institutions. DaytradingBias.com
The Dilemma Of Fund Managers With Large Institutions

Majority of long term funds (i.e. not hedge funds) are all under performing the S&P 500 for 4 to 5 years in a row. Many people are expressing frustrations against the fund managers while some others are having fun making jokes about them. I guess ...

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Top 3 Day Trading Secrets for Success In Forex And Index Markets

Day trading (or daytrading) can be a very profitable business. It also has the advantage of being your own boss and keeping your own time schedule. Many ingredients to day trading success is well known - lower leverage, trade only better risk reward ...

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Essence of Trading: Hunt As A Human

In trading, younger traders often feel pumped when they have to struggle through many trades during the day in order to come out ahead with a profit. For older traders the same struggle is exhausting and often giving them a headache. Over time if a t ...

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Essence of Trading: The Three Pillars of Critical Thinking (Part 4)

... continue from part 3 "The only thing more expensive than education is ignorance" - Benjamin Franklin Self-correction is the most difficult part in critical thinking. We may be very logical in analyzing a situation. We can be very obj ...

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Essence Of Trading: Why We Love Picking Tops and Bottoms (Part 2)

... continue from part 1 Insecurity Associated With Trading Confirmed Signals When being stopped out, you feel a lot more painful on confirmed signals comparing to taking a relatively smaller loss should your extreme picking not going your way. T ...

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