There is a discussion going on about why we trade emotionally. About why we sometimes know what to do, but donât seem to be able to do it. Our choices, our actions or inaction becomes other than logical. Difficulty accepting there will be losses is one issue that stirs emotion. But we can reframe losses being the price we pay for information while we trade, or it is just the cost of doing business. Perhaps it is even an investment, like you can put up $300 to make $500, etc. But even more basic than the issue of losing is uncertainty. The human mind is built to pick a side and not want to sit on the fence. We need to know, or to convince ourselves we know so we can make a choice, take an action. The market has patterns, but you never know in the moment what will happen. In the normal course of events, no matter how much of a master you may become, you will never know. You can slide over to statistical probability and get real time data that says you took 100 trades, and you have a certain record of outcomes. But in the moment of trading, you donât know what will happen. And the market is not like poker in the sense that with poker the game is set in structure and is what it is. However, the marketâs character can shift, and your statistics no longer apply. You will never know. That stirs emotions. The discussion turns to considering emotional behaviors as a response to a stimulus, so consider using behavior modification. You think about reinforcing or extinguishing a behavior. You certainly can change some of your responses based on this. But the market is not a controlled environment. It will give you intermittent positive and negative reinforcement for the exact same event, over and over. So you have an absolutely out-of-your-control and uncertain environment that alternatively rewards and punishes you for the exact same event⦠That is very powerful and undermines behavior modification. Another choice being discussed is to alter the stimulus or change your range of behavioral choices to the stimulus. Iâm still thinking about that one. You might alter the stimulus by doing more or better prep work each day before trading. Of course your trading plan alters the stimulus. You canât control the market, but you can choose your perception of it. While we have the human tendency to want to pick one side or the other, so as to not live with uncertainty, there is yet another analogy about how we go about this. This analogy is where we make a map of reality, and then ignore reality and live by the map instead. The map becomes certain in our minds. Reality may be to complex, to uncertain, and perhaps have factors we donât understand or might ignore, or factors we donât even recognize. So you can ââ¦change your range of behavioral choices to the stimulusâ? How? Can I change my map â or how I think of my map so as to have behavioral options? This might affect how I respond to certainty, uncertainty and reality. Perhaps my prep work each morning creates a map. A topographic map might show a river here, a mountain there, a road, a canyon, a spring. My trading map has channels, swing lows and highs, ranges, medians and means, etc. With experience I can become comfortably certain of what has happened in the past on my trading map. Yet I will never know how, when or where the market will go. It may zip right past something I put on the map, and it will go to anyplace in any order it pleases. Part of the fun of trading is setting up the map, and then seeing where it goes and how it reacts to the things on your map. You can observe if it moves with energy or not, watch what it's behavior is along the way. Maybe get a clue as to why, out of all the options, it did what it did and improve your map making skills. Making a map, and having a POV about it, may change my behavioral options.
Re-reading the above, and on reflection I don't need to know 'why' the market does what it does. I may never know that. Likely the quote by Db at the end refers to the trader recognizing why they took the actions or inaction they did. The POV about the map is not about creating a bias. Rather, it might be having an attitude of interest and perhaps even joy or fun or freedom as you watch how the day develops within the framework your map lays out. ...a different behavioral option due to a different or changed stimulus.
continuing the thought of the above two posts about altering the stimulus, or creating more options for responding to stimulus: We can change our perceptions and strategies. One is as simple as how we think about what we do. âI am a trader.â If that is true, I better get with it and be trading, with the implication I trade a lot. When I think about creating a map and working with that, Iâm not primarily a trader. Iâm a âwaiterâ. A very good waiter, and when it comes time to trade I have the goal and practice of trading well. Iâm reminded of a guy in the first futures class I took. Turned out he was the only consistently profitable one in the class. His story was that he took a couple of years to really become consistent, then for a year or two he pushed it and did very well. But he said it felt like he was taking all the risk and was jut paying more and more in taxes. He had some choices there, but decided he didnât like being alone and not working as part of a team. So he changed his relationship with trading. Perhaps he changed his stimulus? He hired back on to a job. He traded before work, but had an agreement that he could come in late some days and work thru the lunch hour. He started trading and anytime he was up $100 or so per contract, he was done for the day. On days when he obviously hit a runner, he could stay with it and go to work late. He said that when he started trading in this way his profit:loss ratio as well as win:loss ratio improved. He said that he was usually done trading in 20 min or so. He made more money trading than working, and he loved his life. There is something about âwaitingâ here. Itâs not trading desperately or greedily or fearfully, or even overly consciously or studiously (like a student or damaged trader). Itâs a different perspective and different stimulus: a different goal, a different self image. Something shifts in my thinking when I donât think of myself as a trader, but that I am very good at trading well (itâs not who I am, but something I do). There is some detachment there. Itâs the samurai being willing to die; its Dbâs watching a game where you donât care who wins. Who AM I? Iâm a waiter... who knows how to trade well, and no, I donât accept any trading tips, thank you very much. ________ edit: And what does it do to positive and negative reinforcement if I am detached?
Peeled a few layers off the onion. When I learned how to scratch, everything changed. Everything has changed again, that profoundly. What changed was the perception of prep as creating a map, then watching to see how reality connects (or ignores) what was on the map. Mostly what happened to change everything was context. My statistics before didnât make much sense, without context. Mark your entries and exits and learn from them? Without context, there was nothing to learn that made sense. I was more emotional before (think greed or fear or frustration). Now trading is interesting at a different level, and actually even fun. I watch the map fill in. What will really happen? I can see the possibilities develop and can be prepared for whatever. My emotions changed also by looking at the map and realizing that I spend most of my time waiting for the market to get near areas of interest. I relaxed. Iâm willing to take what the market gives now. I used to want to squeeze every tick possible out of a trade, because I had no certainly if something positive would happen again, so Iâd better get what I could while I could. Now I am way more content to let the market tell me what to do, as it goes where it goes on the map. I have context for that movement, it makes some sense now, tho I donât have to know why. Iâm not over thinking, Iâm not over trading. Everything is different, I feel different. Trading is more EQ than IQ. Another layer of damage bites the dust. We talk about fear. Do you trust the market? Do you trust yourself in the market? Or your map? Or your stats? Or plan, routine or prep? Without trust why are we here? I'm not going to spend my time doing something I neither trust nor love. With context, a map, yes, it's getting there. Edit: One of the things the map also revealed to me was how often I was trading fatigued, and didn't need to be. With context, that became clear.
This journal is more about the perceptual or inner part of trading than the exterior technical part. Db has made thousands of posts that cover what to do and how -- which is available to anyone. But it is the inner part that we each have to work out for ourselves. There is something deeper than logic or straight forward intellect necessary. Trading is relatively simple from a logical POV, it is just not easy. Initial goal as a trader was to get to 21 consecutive profitable days, and then I imagined calling myself consistent, it would obviously be a habit, and Iâd be on my way. I actually have not attained that goal, although Iâve come close several times. Yet in the past every time that I came close I knew I wouldnât be able to repeat the wins. Something was still happening out of my control, I was just being lucky, or some random thing was going on that I was winning. With the last round of perceptual shifts, I think that has changed. So Iâm going to be making less observations, and focus more on actualizing. It now seems within reach to get 21 consecutive days of trading correctly under my belt⦠a much better goal than simple profits. Assuming this 21 day thing works, if I am on track, size is the next thing. Time will tell, one thing at a time.
I have to ask Hooti.. why 21 days? Perhaps this has something to do with some sort of metaphysical truism, such as how they say it takes 10,000 hours of doing something to become really proficient at it. At any rate, wouldn't 19 positive days out of 21 be good enough? How about 15 even? I mean if scratches are kept to roughly 2 points lets say, even if you have 5 on a bad day, lets call it a loss of 10 points and then you quit. But on days that are good, 10 points is absolutely reasonable, dare I say even easy given how the NQ moves regularly 30 to 40 points. So a positive day will more than likely be greater than a negative day. With that math, you could have an equal amount of winning and losing days and still be ahead. I remember a quote once, perhaps it was even Db who wrote this, but when it comes to trading, you can either choose to make money, or trade to be right. It sounds like wanting 21 consecutive winnings days is wanting to be right. Even 15 out of 21 will still put you ahead in terms of profits. Now don't get me wrong, I'm not saying its easy and you know I have my own problems that I am working through as well. But since its easier to see things as an outsider, from my point of view, focusing on being profitable for 21 days in a row is just preventing you from making money now.
Roffe has it, the idea of doing something 21 days in a row establishes a habit. Which may or may not be true, but it is a measure. I don't know that held me back, but over time it became clear to me that no matter how many winning days I had in a row, I wasn't on track. As I work deeper with the routine Db has set out... Last week or so I had some profitable days, and then a day I lost $50. Yet I knew I had traded correctly that day and was surprised to realize the profit or loss for that day didn't matter to me -- I knew I was doing something that could be done consistently and from there I can work out how to make it profitable. I still have the idea I want to practice doing this until I can do it several days in a row, wouldn't have to be 21, but why not? What is different is that making a profit is not necessarily the measure of the habit I want to establish.
@Hooti - I've only just come across this journal, and whilst it hasn't been posted to for quite a while I just wanted to say thanks for the enlightening posts. It's a real pity you didn't keep posting. Cheers.