That's the hardest part for this greenie. Keeping your eye on the big P&F picture. When we have these "rallys", it's tempting to jump in something long or short when the P&F says to wait. That is where I continue to screw myself...straying from the plan and giving back gains I have waited so patiently to achieve. Is there some sort of controlling mechanism you use such as snapping yourself with a rubberband when these temptations arise? I know, in retrospect, where I'm making mistakes.
I MUST LEARN MORE DISCIPLINE!
We are our own worst enemy ...
Try this book:
"Trading for a Living" By Dr. Alexander Elder.
elder.com
elder.com
Dr. Elder was trained, and practiced as a real life Psychiatrist, who became a trader...
The Introduction and the first two parts (out of 10) are dedicated to the Psychology that influences the market. Individual psychology and mass psychology.
On page # 27 Dr Elder comments: (in re: Self-Destructiveness)
You need to be aware of your tendency to sabotage yourself. Stop blaming your losses on bad luck or on others and take responsibility for the results. Start keeping a diary --a record of all your trades, with reasons for entering and exiting them. Look for repetitive patterns of success and failure. Those who do not learn from the past are condemned to repeat it.
On page # 47 Dr. Elder defines "The Market"
Here is what he says:
What is the market?
What is the reality behind market symbols, prices, numbers, and graphs? When you check prices in your newspaper, watch quotes on your screen, or plot an indicator, what exactly are you looking at? What is the market you want to analyze and trade?
Amateurs act as if the market is a great happening, a ball game in which they can join the professionals and make money. Traders from a scientific or engineering background often treat the market as a physical event. They apply to it the principles of signal processing, noise reduction, and similar ideas. By contrast, all professional traders know full well what the market is --it is a huge mass of people.
Every trader tries to take money away from other traders by outguessing them on the probable direction of the market. The members of the market crowd live on different continents. They are united by modern telecommunications in the pursuit of profit at each other's expense. The market is a huge crowd of people. Each member of the crowd tries to take money away from other members by outsmarting them. The market is a uniquely harsh environment because everyone against you, and are against everyone.
Not only is the market harsh, you have to pay high prices for entering and exiting it. You have to jump over two high barriers --commissions and slippage-- before you can collect a dime. The moment you place an order you owe your broker a commission-- you are behind the game before you begin. Then floor traders try to hit you with slippage when your order arrives on the floor. They try to take another bite out of your account when you exit your trade. In trading, you compete against some of the brightest minds in the world while fending off the piranhas of commission and slippage.
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In my opinion Dr. Elder's book, plus Tom Dorsey's P & F book are a killer combination to learn to trade and CONTROL ourselves... our worst enemies in our pursuit of success...
Dr. Elder deals with the psychology that many disregard as "not important" of both, the individual involved (each one of us), and that of the crowd... the market.
P & F (the little I know of it), seems to be a trend identificator that shows us a general road map, where the underlying market is taking the particular stock/index/ or whatever.... we are tracking.
So far, to me, the first book has assisted me, and so far, the little I have seen of these funny X & O's seem to be taking the same route...
Good luck.
p.s. I do not get commissions from any books sales. The above is strictly my opinion. |
