I have slow down a bit on my trading activities lately due to several unforeseen circumstances inclusive of time-constraint as well as losses here and there. Not saying that I am totally out but I am sitting back, reviewing every single thing that I have done for the past 3 years with my trading, before I can make a bigger kick-off later on.
There are indeed a lot of systems, EA and techniques that I have learned and tried through trial errors as well as via recommendation by my fellow traders, and I am still reading new books and materials on daily basis trying to learn anything that I have yet discover.
The fact is, none of these systems can guarantee me anything except from serving as a guide for me to come up with a good trading decision. On top of that, with limited time to look and sit in front of the screens, still chances of making wrong judgment, analysis and decision is very very high indeed, coz there is no way you can tell exactly where the market is going in the next 5 minutes, 15 minutes and so on... we are playing with probabilities and uncertainties all the time and these 2 could be really scary if we do not really understand at what we are doing here.
The way I see it, trading is still human activities and the main driver to these price movement is no other than the fear & greed factors of human being.
The challenge as a trader is of course, to really understand, empathize and read the market psychology correctly in a way we can take advantage and manipulate this clear indication of market behaviors to our own benefit, on top of the technical levels and analysis that we use alongside in our trading.
Sad but true, if not carefully control and aware, we could be demonstrating the same behavioral pattern of fear & greed when taking our trading decision. These two behaviors are normally obvious but the power to control thyself is not as easy when writing it on paper.
It is indeed the hardest thing to me personally until now. Most of the time, I could control myself but the moment I made this one stupid judgment and decision whether to take the trade or not, whether to hold or exit, everything can change... Those who are actively trading will surely knew what am I trying to tell here.
IT IS NOT EASY... that's the message. Why? This is because as long as we are human... the feeling of greed & fear will always be there remained within you. These beasts are not that harmful when they are in perfect balance, but once the cognitive bias is moving to the extreme side of either one, that is where problems will become inevitable.
So, the question here is... what is the lesson learnt and what are the solutions?
I guess the best way is to admit that we are human and there is no way we can totally omit these 2 beasts from our within... these two are EVERLASTING... BUT...
There is a way to control them by really knowing and strategizing our approach before any trade decision is taken in which risk management is the next thing that will protect you in case if you are wrong. But still, even risk management can go haywire if these two F&G start mixing around with your sizing calculation, by risking more than you normally do.
Anyway, back to earth... I am highly considering to do this on full time basis but there are still puzzles that I need to understand before I could seriously put my both feet into this trading world and call myself as a full-time trader.
Bottom line is, sure anyone can make money here but the risks and uncertainties are sometimes too big for any typical trader to jump in on full time basis.
And the reason is no other than either these fear and greed factors. You are either too fear to risk doing this on full time since there could be losses that you could not take or too greed in a way you put in your life-savings into your trading account and being overly-optimistic that you could change your life in 6 months. Either way is indeed harmful if you go to the extreme side, especially on greed.
Just think about it... Next I will write about the Power of Distraction...
No comments:
Post a Comment