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Strategies & Market Trends : Your Worst Trading Enemy.. You -- Ignore unavailable to you. Want to Upgrade?

To: RobQ who wrote (99)	1/19/2001 7:06:52 AM
From: shawnwolff	Respond to of 223

To: RobQ Re: Random Reinforcement First of all, thank you for the kind words. I think that Trading Psychology is the most interesting part of trading, and I love discussing it. Glad you like the thread. You brought up a really interesting point about what we call "random reinforcement". The hardest part of keeping stops, for me anyway, is that hindsight will often sway us from believing in the stops. How many times have we blown a stop, only to have it come back, and in the end actually make a gain? And what does that tell our subconscious mind the next time our stop comes? In the back of my mind, I want to rationalize why I shouldn't keep my stop this time then! But that kind of subjective trading, according to what you feel at the time, is more often inconsistent, and will not be successful in the long run. If we had consistent reinforcement, where we were rewarded for keeping a stop, and punished for not keeping a stop, then training ourselves to keep the stops would be relatively easy. But trading is so wonderfully complicated at times. We have to constantly remind ourselves of the logic of keeping a stop. Do the math. Stops are logical. They make sense. If you keep losses small in relation to gains, you will make money. So the trick becomes to digest this, and automatically follow the "rules", keeping your stops regardless of what that little voice in your head is trying to tell you. Stay logical, stay automatic, without hesitation. - Shawn