Dear Darwinex Community,
I open this thread in order share my thoughts and open discussion about an extremely important aspect in every traders life - Trading Psychology And Discipline.
It seems impossible but the first book i have read regarding financial markets was Reminiscences of a Stock Operator, from Jesse Livermore. The book is on my trading desk till today, because it remembers me the pain that i felt when for me trading was like a flip of a coin game. After i blow up my trading account in 36.5 days ( trading s&p emini futures - early 90´s) i decided to STOP and begin build a solid structure for my trading. After build a trading system ( based on Trend Director and Trade Activator rules ). Very simple rules but i wasn´t able to follow them, was like driving an automatic car and was always trying change gears. Then i came across what changed my trading life forever, trading psychology and discipline. I started study, read dozens of books, attend to seminars, but what changed me completely was a couple of sentences from Mark Douglas :
“I haven’t seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren’t. Many outstanding intelligent people are horrible traders. Average intelligence is enough. Beyond that, emotional makeup is more important.”
“Fundamental analysis creates what I call a “reality gap” between “what should be” and “what is.” The reality gap makes it extremely difficult to make anything but very long-term predictions that can be difficult to exploit, even if they are correct.”
“Why do you think unsuccessful traders are obsessed with market analysis? They crave the sense of certainty that analysis appears to give them. Although few would admit it, the truth is that the typical trader wants to be right on every single trade. He is desperately trying to create certainty where it just doesn’t exist.”
“Forex trading requires the learning the type of skills that people just aren’t simply used to learning – Mental Skills.”
“You don’t need to know what’s going to happen next to make money. Anything can happen. Every moment is unique, meaning every edge and outcome is truly a unique experience. The trade either works or it doesn’t.”
“No man ever reached to excellence in any one art or profession without having passed through the slow and painful process of study and preparation.”
Saying this, forget the indicators, forget the holy-grail system, if you are not able to master discipline you will never be able to be profitable on trading.