Trading Psychology: Internal Battle of Proficient Trader v Destructive Trader

My aim last week was to do a psychological review at the end of each trading session.  I managed to get that done for three out of the four sessions.  Friday I didn’t trade. So I will say “well done!”

Did my behavior change as a result of doing the reviews?  Definitely “yes”.  In each trading session, the lessons from the prior day stayed in my mind – and it altered my behavior as a result.

What did I learn from that?  A lot – I can see that by re-reading my posts over the last week.  However the key point I learned was to distinguish between the destructive and proficient trader inside me.  Which one will have more control? Which one will I “feed” more? [This really reminds me to what my minister used to say to me back when I was a hard-out born-again Christian in my teenage years].

The Proficient Trader inside me…..

  • plans the management of a position in advance – to the extent possible – targets, and movement of stops, and also taking into account notion of time passing, and how to handle news
  • is patient and waits for the setup criteria to be met – for candles to be finished and for patterns to be completed
  • accepts that he will not catch all the moves with his setups – but he knows that he has a better chance of profit when he does actually get into a trade – and that in the long run he will therefore be more profitable and actually execute fewer trades than the destructive trader
  • tends to be calm and relaxed (like in the photo above)
  • can trade under pressure, by doing the following:
    • Reducing decisions and actions if he feels the pressure is too great – rather than running around like a headless chicken
    • Focusing on his actions (i.e. trading well), not on the outcome – focusing on what he can control
    • Being able to laugh at himself and use some humor
    • Seeing things in perspective and not assigning excessive importance to the trading results
    • Being aware of his physical and mental state
    • Breaking the correlation between self-image and trading results
  • undertakes larges amount of testing in order to build a quiet sense of confidence in his trading strategy

The Destructive Trader inside me….

  • likes to get into trades quickly, prior to candles being completed or prior to candle formations being completed
  • is afraid of missing out on potential moves, and for that reason often jumps the gun
  • likes to manage open positions being rule by greed and fear and makes up the decisions on the spot – when decision-making functionalities tend to be sub-optimal
  • tends to be stressed, excited and rushed (like in the photo above)
  • often falters under pressure – he chokes
  • continuously questions his position whilst it is open and looks to the most recent data to try to figure out whether it should change his plan for the trade
  • Entry into a position and the management of a position are separate things – it’s possible for one to be controlled by one trader, and the other part to be controlled by the other trader

So in theory, if you take a proven profitable strategy and then take the above factors into account – then you gotta be a fair way toward becoming a consistently profitable trader, no?

This entry was posted in Psychology, Uncategorized. Bookmark the permalink.

3 Responses to Trading Psychology: Internal Battle of Proficient Trader v Destructive Trader

  1. Thierry Vidal says:

    Great work George
    Thierry (the french you met on Friday)

    Liked by 1 person

  2. Pingback: April’15 Trading Psychology Wrap & Blue Print for this month! | George's FX trading blog

  3. Pingback: 6/4 – Psychology – quick step back for a bit more of an overview | George's FX trading blog

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