8.181 visualizações22 de jul. de 2017
that tend to struggle with trading and if you take the midpoint of those two types of people you end up with somebody that has about the right balance of both of those characteristics and that’s what .
I’m going to talk about in this video please like and comment on the video below that will allow me to produce better quality videos and more of them in the future.
So over the years .
I’ve discovered that .
I’ve discovered a lot about myself through trading but .
I’ve also discovered a lot about other people and it’s interesting because .
I often do videos on trading psychology but they don’t tend to get that many likes or views and .
I actually think it’s one of the most important things that you can learn because it’s a journey that .
I’ve been through.
I was young .
I was very risk-averse and as a consequence that made me a terrible trader when .
I first started trading short term on financial markets.
But it’s weird because you can give people you know .
I thought that when .
I first started trading on sports that people were bound to be skeptical .
I’m amazed totally amazed that people are still skeptical despite all of the work that .
I’ve done, um, but the fact is .
I’m here .
I’m still doing it .
I’m doing it as much if you know if not more because of the complexity and the detail that .
I understand now then .
I have been in the past but the skepticism continues and that sort of very often and extends because people can’t do it.
when anybody comes to work for me .
I teach them how to trade and also what obviously .
I had done lots of training in the past and you begin to discover that there are people that are good at trading and those that aren’t and what you tend to find you know if .
I explain the two extremes to you you’ll begin to get a better understanding of where you sit on that spectrum and how you could probably move more towards the center because .
I believe that you know having the ability to take risk is very important but understanding why you’re taking that risk and what the potential payoff is gives you the discipline that you require to be able to trade effectively and if you’re either end of those extremes you’ll get you’re going to suffer so we had a great example on the forum .
I can’t remember what the thread was but somebody was basically saying that you know whatever they did didn’t work and it was a nightmare blah blah blah blah and so .
I looked at the thread and .
I just will okay you know let me give you some advice so .
I popped onto the thread and .
I just said okay do the following very clear instructions for the next you know for the rest of the card and you know let’s see what happens so the reason that .
I gave those instructions is because .
I can look ahead into a market and .
I can see roughly what’s likely to happen and .
I can tell many hours out how much the market is going to trade roughly how its likely to trade you know when the money is going to arrive how the money arrives on set and runners and so on and so forth so and as we get closer and closer and get more and more information my decision becomes better and better so .
I get a really simple instruction which was do this at this time train out at post time and then as the threads developed people posting up screenshots saying well you know what actually he was right and you know here’s another one here’s another one here’s another one oh my god and the set up was unique to what we saw on that particular day but you know what .
I said came true you could see one by one all of those things coming true so went back to the original post and just said oh how did you get on it because like they must have made money.
But they didn’t they lost money and it was because they got freaked out when a very short term the price started to move against them and they closed their position a made loss whereas that wasn’t my instruction my instruction was do this at this point closed it at that point and go from there but simply because the market tipped against them slightly temporarily they closed the position and there was the problem with what they were doing with trading but it also exposed this particular trading type that you tend to see .
I’m not saying that there are either one of those extremes it was just a neat example to throw into the video for you but typically you tend to see two extremes in the market on one side you see people that are over-analytical and this could be due to their background maybe they have a mathematics background maybe they’re sort of have an academic side to them and and that’s fine because you know the market requires all participants well we tend to find the people that are deeply academic is that they’re trying to over quantify stuff so they’re trying to slice out every piece of risk that you could ever possibly imagine and that’s impossible if .
I walk across the street stay a meter .
I could come crashing down and wipe out the town there’s a demonstrable chance that that can happen it’s very very small but there’s a demonstrable chance and therefore you could sort of say well .
I’m not going to cross the road because .
I could get killed by a meteorite when in fact there’s much more problems and dilemmas right in front of you and so yeah the the over-analytical types have a problem with taking risk they always sort of say well what if this happens what if that happens and it’s like okay but back here yeah but why should i back here just back there and and they sort of refused to and again well yeah and then the trade pays off and .
I go oh yeah well yeah but what happened if it went any other direction but it didn’t it did not go into the other direction oh you’ve all happened if it would and it’s like well me so the over and over analytical types tend to sit on the end of the spectrum and my message to you throughout this video is that actually you know .
I sat at one end of these spectrums .
I’m going to leave you to guess which one it is and .
I have to correct my behavior so it’s perfectly possible to do and .
I feel that’s the biggest leap that .
I’ve taken in the time that .
I’ve been trading is the ability to take a risk that gives you a hint straight away there but when you look at the over analytical types they have a real problem taking risk because they’re trying to quantify and the fact is that some stuff is unquantifiable i’ve got unbelievable amounts of data i’ve looked at everything from milliseconds to hours out i’ve looked at the way the market works the major participants in the market and so on so you know .
I can describe all of that in beautiful detail .
I’ve quantified every single thing that .
I possibly can and but that’s just to improve my trading now whatever .
I look at within that there’s always an element of risk and .
I don’t let that stop me from doing it if if there’s a foggy area within whatever .
I’m doing .
I just accept that there’s a foggy area and you know half the time it’s going to work and half the time it may not work but that foggy area .
I can’t describe any better it’s just pockets and there sits random and so there’s nothing .
I can do so for example if a big backer arrives in the market you know you can’t predict that you can’t tell that somebody sudden you’re going to turn up with five or ten grand but you can describe when that person is likely to turn up what sort of money that they can use and what influence that would have on the market but you just can’t tell when they’re going to turn up see it could be in a trade he turns and destroys it and you just go oops and that’s it but if you attempt to quantify or over quantify it you may not take risk as you’re saying well what happens if that goes wrong but also you fall into the intelligence trap as well you elevate yourself above others and you refuse to accept that there’s any other way and you have to have a sense of humility when you’re trading you’re going to get knocked back so you can get situations that don’t work out the way that they should do so you have to take it on the chin you just have to accept that you’re going to screw up now and again and you just have to move on you don’t dwell on it you don’t spend any time on it but with the if you get people are trying to over quantify stuff especially if they’re from an academic background they may feel that they’re above all of that and their way is the only way and there’s nobody else can do it because they’ve looked at it and there’s there’s no answer to and time and time and time and time again .
I’ve got into discussions in inverted commas with this type of person that’s basically trying to prove you wrong by force of character when in fact they are wrong but they just cannot see it and there’s no way that you can explain it to them you can sit down and discuss it with them and they just refuse to accept the truth there was a brilliant article written by somebody that went to disprove a trading strategy and it was completely wrong it was it was it was beautiful example of exactly what .
I’m talking about here so .
I captured it and kept it in case it was ever deleted and .
I used that as a great example for people to come and see me or when .
I discuss risk and how people can get things so incredibly dramatically wrong despite being quite intelligent they’ve just missed some of the most obvious things and that you could ever possibly imagine so yeah you have these people that are over-analytical want to quantify everything and can’t take risk and that’s one extreme and then of course we flip it over to the other side and the other extreme is people and who take too much risk who don’t quantify anything and it’s just a gut feel that they’re using to trade the market and that may work for a short period of time but unfortunately it’s just not good enough in a long term over all the years that .
I’ve been trading .
I don’t know how many people .
I’ve seen come and go and people arrive in the market they stumble across something that generally works until the day it doesn’t and boom suddenly they’re they’re out of business suddenly then not as positive as they were and what .
I’ve managed to achieve over the years is a balance of these two so you know .
I did lean on one side of the other at different moments in my career predominantly on one side but .
I’ve learnt to basically but only be able to quantify all of the things that are going on in the market but also to be able to act on them you know when .
I see an opportunity .
I jump on it and .
I’m really good at jumping on opportunities now .
I just split second and you know .
I’ll pick up on an opportunity to start doing something so you need that balance and the problem you have over on this side is that people could be trading they’ve got something that generally works they can’t explain why but you know it’s difficult to scale that you’ll never have the confidence calenus if you explain exactly what’s going on and why that particular strategy works but also you’ll have a tendency to rush in too early or it may be that’s when a situation goes against you you may just dock the position and you may just be a bit too gung-ho so you know you need a bit of a month to be able to take risks because there’s no point in not having that and not being able to take risk because that’s where money is you know the sort of risk is equal or more or less equal to reward but your objective when you’re trading is to try and earn a bit of money at the lowest possible risk but you need to take risk in order to do that if you understand where .
I’m coming from so you need to be able to have the balls to take that position but you also need to be able to describe why you did that because if the market shifts over time which it always does the market never changes because it’s always changing that’s the default mode of the market when the market shifts slightly you need to be able to detect what that shift was and then adjust your behavior to account for it and you know that shift could be any number of reasons market participants the way the exchange works new exchanges that come along whatever there are many different things that could mess that up and so it’s important to understand and you know really begin to get to grips with exactly what you’re attempting to do if you just go in the market and you’re busy trading and you’re not completely sure what the exact payoff or why that occurs and if the market shifts you’re going to lose that but also on that side of things if your trading is emotionally driven and then you’re tend to when the market prods you you tend to react to and that can be a bad thing and that’s what in the example .
I gave earlier was happening was you know the person would almost certainly have made a profit there to help their position which is what .
I said they should do but when the market went slightly against them they’re panicked and got out and that’s the sort of characteristic and behavior you see there and also the ability of these people to lose their way in the market when the market shifts they have no idea what’s happened and all of the data that .
I’ve kept over many years right from day one when there was virtually nothing in the market allows me to just to look at the market and just detect if there are any subtle changes and then .
I can try and position myself ahead of those so you’re ultimately you know you don’t have beyond one extreme of the other you want to be in the middle probably impossible to be exactly in the middle you may lean one way or the other but that can be reflected in whatever trading style you have but it is important to understand that there are those two extremes that are as dangerous as each other and in fact you want to position yourself somewhere on that scale you want to be able to implement trading strategy and do a trading strategy you want to be able to take that risk but it’s important to understand exactly the dynamics involved within that because that will allow you to grow and scale up what you’re doing and also transplant a strategy from one market into another and so on and so forth but one thing you don’t want to do is be either side of those two elements of the trading market