Psychology and Discipline of Trading


Here's a copy of a manual on the psych and discipline of trading ... straightforward and useful for folks new to trading as well as "old timers." It's in MSWord doc format. Also, I think Bruce listed a book or two (forgot the title even though I probably have it in my library). This one, I think, is written with stock day trading in mind, but all of the same principles and dynamics apply I think.

Just trying to add some value here, ha!

Click link to access uploaded file:
Psychology_and_Discipline_of_Trading.doc


I've contacted the author (Barry Rudd) of the document that MonkeyMeat posted and confirmed that he has given MonkeyMeat permission to post this copyright material.
Trading also includes some serious mental emotional gymnastics. Would like any feedback on this doc as well as what others can post here. Good for all I think!
I too think psychology should not be underestimated
I thought this was a good article. I especially appreciated the humor and wit that the other included making a somewhat boring topic easy and enjoyable to read. I had previously posted this in a different thread, but it is worth posting again.
Any book recommendations on psychology of daytrading?
Originally posted by itzak
Any book recommendations on psychology of daytrading?


"Trading in the Zone" by Mark Douglas
There are many characteristics and skills required by traders in order for them to be successful in the financial markets.The psychological aspect of trading is extremely important, and the reason for that is fairly simple. A trader is often darting in and out of stocks on short notice, and is forced to make quick decisions.
Thank you for the manual MonkeyMeat.

Besides money management, I would imagine that proper trade psychology is one of the most important aspects of being a successful trader. Learning to get a handle on your emotions and dealing with greed/fear, I think, is more important than any of the setups or methods you use to get you in and out of your trades.

It seems like most new traders are obsessed with the "system" and forget that the human element will undoubtedly get in the way at some point. Knowing when this is happening and learning how to deal with it is essential to excelling at the skill of trading.
This book is brilliant.
Another great one is: 'Trading in the Zone'
by Mark Douglas.

But this ebook contains points not mentioned in
Mark's book.

I hope you read both , many times.

With Discipline as your best Trading Friend,
you are already on the success path- and with
a good friend as well.
Cheers,
G-88
*
Hey Greg,

I'd posted that "book" a while back. Also, I posted some text from "Trading in the Zone" more recently that I also felt really captured some of the core issues related to trading from the mental/emotional/psychological/discipline perspective. In other words, after re-reading it, I pulled out what I thought were the most important components relevant to every trader and trading in general. (wish I had the link, but I don't ... Guy, help?)

If you had to pull out some of the key lines or paragraphs from the book link, what would they be. Perhaps it'd resonate with my own trading as well as others. Just curious ... based on the hard core stuff we all deal with implementing our trading strategies.
The success that a trader achieves in the markets is directly correlated to one’s trading discipline or lack thereof. Trading discipline is 90 percent of the game.
The formula is very simple: Trader with discipline and you will succeed; trade without discipline and you will fail.

There are three spokes that make up, what I call the Wheel of Success as it relates to trading. The first spoke is content. Content consists of all the external
and internal market information that traders utilize to make their trading decisions. All traders must purchase value-added content that provides utility in
asking their trading decisions.

The most important type of content is internal market information (IMI). IMI simply is time and price information as disseminated by the exchanges. After all,
we all make our trading decisions in the present tense based on time and price. In order to scalp the markets effectively, we must have the most live and
up-to-date time and price information seamlessly delivered to our PCs through a reliable execution platform and/or charting package.

Without instantaneous time and price information, we would be trading in the dark. The second spoke is mechanics. Mechanics is how you access the
markets and the methodology that you employ to enter/exit your trades. You must master mechanics before you can enjoy any success as a trader. A simple
keystroke error can result in a loss of thousands of dollars.
A trader can ruin his entire day with an inadvertent trade entry error. Once you have mastered order execution, though, it is like riding a bike. The process of entering and exiting trades becomes seamless and mindless. Fast and efficient trade execution,
especially if you are trading with a scalping methodology, will enable you to hit a bid or take an offer before your competitors do. Remember, the fastest
survive.

The third and most important spoke in the Wheel of Success is discipline. You must attain discipline if you ever hope to achieve any level of trading success.
Trading discipline is practiced 100 percent of the time, every trade, every day.

the formula is not simple, but effective. Saved me a lot of bad investments and helped me achieved the results that i ve wanted and needed.

hope it was helpful