TRADING PSYCHOSIS

Trading Psychosis – The Vendors Dream

I have wanted to address this subject, and after a few beers this Memorial Day weekend, sat down and banged it out. It should resonate with most folks, even traders that have eventually enjoyed success. But I’m simply trying to lay out the mental/emotional workings that surround the difficult process of finding a way to trade successfully. And it includes the role that almost all vendors play in that discovery as they prey upon the relief of pain that’s encountered by those who diligently attempt to master the market.

So, here’s a skeletal breakdown of what typically takes place … 1-16 of what steps the trader experiences as he or she enters the arena of the market.


1. I see how basic the market moves, either up or down, and how easy money can be made.
2. I open an account and trade with an initial strategy and lose money again and again and again.
3. I begin feeling frustrated and feel the PAIN of losing.
4. I don’t question my capability. I know it’s because I don’t have a successful method/strategery.
5. Someone has to be making money and so will I, but I need help.
6. The search: reading trading books and hunting down a good course that promises to teach me how I can make my fortune, or at least a living, for a fee.
7. That nominal multi-grand fee is reasonable since I’ve lost that much in my trading. Whew, thank god I’ve got support now. My PAIN is gone, replaced by relief and excitement.
8. The course marketers/vendors will teach me to make money.
9. But it’s not working, and I’m still trading like a retarded monkey.
10. IT MUST BE MY FAULT because I am obviously not trading the paid-for strategy correctly. They’re doing great, and I hear about it. But I’m still losing.

Reality Check:

It is our nature to accept the FAULT for not using the education we paid for in the right way. We’re too “invested” in it. This is how and why trading education marketers make so much money. They are simply offering to relieve your mental anguish – your PAIN. And any time you don’t achieve success, it’s your fault, not theirs or their method. This is human nature! This cycle of thought is reinforced by the promotional success stories, testimonials and apparent legitimacy of the training or the company.

11. Eventually I finally realize something is rotten in Denmark and not with me.
12. I look for the “real thing” training company/person/mentor/method/chatroom etc.
13. I pay for more education … but that doesn’t work either.
14. At this point I’m even more frustrated, angry and still suffering PAIN!
15. I’ve questioned myself and now question all courses and if anyone really does make money trading.
16. WTF do I do?!?!?!?

I don’t have “the answer,” but I believe that I can offer some useful and real insight into how to maximize your potential success to trade for a living. And let me assure you, I’m very, very qualified to address this subject for numerous reasons. I’ll follow up within the week.

Any and all comments and feedback are welcome here on this thread in the interim. Seriously! They can only help add to the follow up blather that I write, making sure I cover every element of importance and with substance that will hopefully help or assist those who’ve found themselves in the “trading psychosis” loop … as I’ve been there myself a couple of times early on during the past two decades of my own experience in this crazy, challenging and potentially rewarding endeavor.

I've included my regular chart analysis with just a few of the indicators I use to discern market behavior.





Above chart is a joke ... my bad! And I had so many more indicators and lines I wanted to draw on it, ha ... but ran out of beer (and time) and have to go to bed. Looking forward to following up on this topic and also some good trading for everyone visiting mypivots and sharing analysis and charts here!

Monkey Meat, its for newbies who can use it to make 1 trade per day at RHT Open in the diraction of previous open. It has a high sucess rate. BTW what is "Zen Koan"

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Originally posted by CharterJoe

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Originally posted by TraderMom

HI Monkey Meat...
Well here's the deal. I have an inheritance. I took a small amount of it to learn this. I paper traded for 2 years. I broke even for a very long time.. Which was just at frustrating as losing but at least there wasn't this pit in my stomach. I've only lost 1/5 of the money I started with but the money came from my mother's life work so I dunno. I'm super frugal anyway, so losing any money to me is losing money I can't afford to lose.

So I guess I could tell you right now that might be part of the problem or a psycological part of it at least.

I keep getting stopped out.. I've decdied that I would just trade the e-mini's and I had 8 good trades in a row before I went live. After I went live I had 8 good trades in a row,
then took a big hit and haven't gotten my mojo back since. It's like I completely forgot what I was doing that was making me money.
I wanna hang my hat and go "back to the books" but what books? I can't even remember what books are good anymore. I'm like a deer in headlights. Now I'm re-evaluating all my set-ups and indicators and it scares me cause now I'm going to change everything, and I know that it once worked. I don't know what's wrong with my moneymangement. I can't figure it out. How many times do you let a trade go against you before you hang it up for the day. I keep a journal and it's really helping me, but I can see how my disipline is lacking. I have several entries where I was ahead, and told myself to walk away, and didn't and lost all that I made. So I guess I will buy the trading in the zone book and see what happens. Thanks for listening. All advice is appreciated.

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TraderMom, been there done all that. I understand what it feels like. I was getting stopped out trade after trade. And one day an old pro trader said to me...if you keep getting stopped out and then the trade goes the way you thought then why in the world are you using stops? It was my second ahhhh haaaa moment. I now will enter a trade and place a super large stop, only for emergency 9/11 type thing or power failure, or sudden fed announcement (I don't watch the news) What I do is enter when I am bullish and then exit when I am no longer bullish. Also trading the NQ for a long time instead of the ES helped me, and I still trade the NQ more than the ES. Could you walk me thru one of your normal bad days? What is making your trade setups?

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This is dead on Joe ... and the perfect questions at the end about the walk-thru of bad days and what comprises a trade setup!!

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Originally posted by ak1

Monkey Meat, its for newbies who can use it to make 1 trade per day at RHT Open in the diraction of previous open. It has a high sucess rate. BTW what is "Zen Koan"

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That was good info ak1. The way it was worded sounded like a Zen Koan to me for some reason. Google it because I've had a couple of beers that'd not allow me to describe it well at this point on a Saturday. Thanks for your input here, much appreciated!!

There's been a big time THEME to the posts so far. It's all about Psychology and Discipline with method ... but more importantly with money management and trade management. I'll try to adress the Vendor thing later from my perspective and experience. In the meantime, I'm attaching an MSWord doc about Money Management. Hopefully folks will find it helpful. Please feel free to comment on it and add to it. That'll only improve the quality of info on the topic here.




And TraderMom, I'd love to read your response to Joe's post ... or anyone elses to those same questions. This should be a candid learning experience that we all can learn from I hope ... me included!

I am so thankful to have found this place. I have done some research about the info I've found here. I loved that money management book, and the trading the 10 o'clock bulls. I think I have figured out a lot about what my problem is.. I went back to sim trading and have done really really, well.. (that always happens though) but now I even feel like I MIGHT know what I'm doing. I realized that even though I thought I had a strategy, I really didn't and what I did have was not iron clad, and I would change the rules as I went along... (I hate playing with people like that, and it seems the market does too) LOL..

I have been looking over at the strategies in this forum, and have learned a ton. I"m going to go back over there, and ask some questions. Again, I thank you all so so much.

TraderMom, with regard to managing STOP LOSS on thing that I can suggest is the say you entry a stop loss at 935, often you may find that the market comes hits the S.L at 935, takes you out and then turns and goes the way you wanted it to go leaving behind a spike. Well the answer is decide where you would like to enter the S.L but do not enter it. Instead if the market touches your S.L point wait for a close below it on a 1 min. chart. This way you can easily tackle the notorious spikes.

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Originally posted by ak1

TraderMom, with regard to managing STOP LOSS on thing that I can suggest is the say you entry a stop loss at 935, often you may find that the market comes hits the S.L at 935, takes you out and then turns and goes the way you wanted it to go leaving behind a spike. Well the answer is decide where you would like to enter the S.L but do not enter it. Instead if the market touches your S.L point wait for a close below it on a 1 min. chart. This way you can easily tackle the notorious spikes.

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Is. S.L. swing low?? or... Thanks a bunch for helping!!

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Originally posted by TraderMom

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Originally posted by ak1

TraderMom, with regard to managing STOP LOSS on thing that I can suggest is the say you entry a stop loss at 935, often you may find that the market comes hits the S.L at 935, takes you out and then turns and goes the way you wanted it to go leaving behind a spike. Well the answer is decide where you would like to enter the S.L but do not enter it. Instead if the market touches your S.L point wait for a close below it on a 1 min. chart. This way you can easily tackle the notorious spikes.

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Is. S.L. swing low?? or... Thanks a bunch for helping!!

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TraderMom, SL = Stop Loss

Got it.. Thanks.. but that kinda sounds like sudden death to me.I appreciate the feed back.. I check in to it.. Thanks a bunch..

What happened to this thread?

When I think of all the threads this was my favorite and exemplified what "mypivots" is all about. Helping people to become better traders and learning from one another.

I guess we need a catalyst of some sort.

Any suggestions?

This guy must have read my post on page one!

http://www.safehaven.com/article-13993.htm