Appreciating the good
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Thread: Appreciating the good

  1. #1

    Appreciating the good

    Hi traders!

    In many trading books you can read this example – person is asked to choose between two options. If he/she chooses first one, he/she will receive 100 USD immediately with 100% probability. If he/she will choose the second options, he/she will get 200 USD with 70% probability.
    Unsurprisingly, most people will choose the second option. We like guaranteed outcomes – it’s our human nature that pushes us to avoid uncertainty.

    And that maybe reasonable… just for 1 outcome.

    But what if I change conditions of this small task?
    What if you should compete with other people how will also try to make such choices, and if you will underperform, you will get charged for some amount of money, and if you will win, you will get additional prize and for example, double your gains?

    This decision is much more tough to make – in such circumstances you are no longer having «comfort zone», you will be either pushed by possible punishment or pulled by possible gain or both.
    How do you think, who will win in the long run, if the experiment will be long enough? It’s hard to say, it will depend on various conditions but the second choice is considered to have more connection with «trading thinking».

    What is «trading thinking»? We can say many words about it, but it has one feature that I want to talk about in this article. «Trading thinking» involves perception of risk not just as a thread and possible harm but also as a possible gain.

    We tend to forget about that, and we tend to focus on harmful outcomes much easier than on positive ones. I’m talking now about the situation when you are trying to turn bad trading system into a good one simply convincing yourself that it is good  None of that.

    I’m talking about feature of our attention – neuropsychologists call it «negativity bias», it occurs when we are very easily focusing on worst case scenarios and in general, are experiencing more pain when we are losing than joy when we are winning (earning).

    It’s considered that «negativity bias» is a pre-default feature of our brain and is inherited from our ancestors – dinosaurs. Really, when they had immediate threat for their existence, they were producing one of three possible scenarios of behavior – fighting, «freezing» (pretending dead) and escaping. Human era is pretty young whereas those creatures, out ancestors were living on the planet 100 million years ago. Well, you may not believe this, that’s just a hypothesis, but we can admit that «negativity bias» exists for whatever reasons. Its existence is proved in numerous experiments and every trader knows that by experience.

    For trader this feature means potential low emotional pain threshold, inability to switch to new profitable trades after series of losses and inability to build on your strengths. We like to blaim ourselves – «why have I sold here?», «I should have closed this position» e t.c. But we achieve real progress when we stop blaiming ourselves and start praising ourselves for small (or not small) successes.

    What is the cure?

    After every trading day, write down – what exactly have you done right today? What was the reason for that? What conditions helped you to do so?

    For example, you understand that today you have picked a good entry for your trade but later on, as the day developed, this positions was closed to breakeven. Some trades would say – oh, it’s a wrong trade.

    But in case you havent’ veered from your trading plan, you should pay some increased attention to the fact, that your entry was just perfect, and admit the fact that you were not revenging the market after your positions was closed.

    If you practice it for long enough, you will have positive experience, coaches call it «human potential sponsorship». In a nutshell, when you pay attention to something inside you, it will become stronger. The more attention you pay to your trading strengths, the more ability you will have to develop competence, and then – expertise.

  2. #2
    Thanks for sharing this sir you are saying right that we should write down our daily activity in a notebook I am doing trading since 6 years and I always write down my daily routine in my notebook and some time if I get loss then I also write down the main reason of my loss for that day and I will suggest only less risk trading in the market if anybody want to make life time income from forex then I will suggest only less risky trading in this business

  3. #3
    Join Date
    Mar 2013
    Am fuly awear of the difficulties of life,so ill try to bounce back
    I enjoyed reading your posts, it has shed some lights on a key issue regarding our thoughts and having control over our thoughts and thinking, having positive mindset would go a long way in improving our standards, its important that you tell yourself the truth and not deceive yourself would make you a better person.

  4. #4
    It's get rid of a few lighting on the crucial concern concerning the ideas as well as getting manage more than the ideas as well as considering, getting good way of thinking might proceed quite a distance within enhancing the requirements, it's essential that you inform your self the facts and never con your self might cause you to a much better individual.

  5. #5
    Join Date
    Sep 2013
    Trading in the market is tactical, and the trader should have this in mind and in doing also. Traders can not get the things of the market under strange believes. You emotion is all about your attitude to the market by trying to see things in the cheap view as regard the percentage and money illustration of the thread starter. But as regard to the negative bias, i do not think that any trader can excape that.

  6. #6
    Join Date
    Jan 2014
    Sir I am agree with your one point that daily activity writing is a great idea to handle our trades in a good way in forex I am learning for now in demo account and I really like your suggestion I think I should also write down my daily activity in my notebook and I am sure that it will give me good help in forex. Thanks for your posting.

  7. #7
    Join Date
    Oct 2013
    need a time and process until we understand how to trade with properly, and maybe years, i do like for some words above and especially about 100 % probability for profit and 70 % for double profit, but maybe there is a third , it is unlimited income at forex trading and all depend to us, no probability, because all depend to us

  8. #8
    A very nice advice for new traders we must keep a record of our daily trading and results so that we can analyse the mistakes and prevent ourselves from repeating the same mistake in future as the things are difficult to remember in long run but with keeping the records and analysing we can inculcate good trading habit and will start making profit.

  9. #9
    Registered user
    Join Date
    Aug 2013
    Quote Originally Posted by nidhi View Post
    A very nice advice for new traders we must keep a record of our daily trading and results so that we can analyse the mistakes and prevent ourselves from repeating the same mistake in future as the things are difficult to remember in long run but with keeping the records and analysing we can inculcate good trading habit and will start making profit.
    it may be for the purpose on the how to trade better in trade journals because the journals we have this trade would be good in this trade for the better so that way we will be more leverage in this business to make trades become easier to evaluate and use appropriate learning management also will be able to produce so quickly trade skills

  10. #10
    Trader dkarev's Avatar
    Join Date
    Aug 2013
    great write up inhere,this is the more reason i dont joke with my support and resistance are when trading,i make use i properly draw my support and resistance area both from weekly and daily chart combine and i take note of all this level.since the market is bound to repeat itself i always keep trade of my day to day trading to understand what i did right and wrong.

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