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Emotional Trading, use or suppress
happy2
post Posted: Dec 16 2006, 10:31 AM
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The concept of emotional trading is recognising that we are emotional creatures and need to be emotionally in touch with ourselves. At least, I think this is what it is.

Our animal instincts of fight and flight are based on fear and not rationale. So I suppose it must be instinctive for us to either jump out of a trade as soon as we have a profit and fight back when we are losing by averaging down.

As has been proposed by Spartz, a higher form of emotional trading is using the positive emotions that we experience for determining trades. The rationale behind this is if we feel good about the way the trade is going, let's pyramid and make more profit. On the other, hand as soon as we begin to feel bad, let's close the trade and feel good about our decision in either having made a profit or prevented further losses.

In the event that we exit a trade and, in so doing, miss out of even more profit, let's feel good that we have stuck to our trading plan, and not feel bad about missing out on profit.








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Have a good one

Happy 2





"Knowledge is a process of piling up facts; wisdom lies in their simplification".

Caveat Emptor: the above comments are merely opinion, not advice.
 
happy2
post Posted: Nov 30 2006, 11:41 PM
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QUOTE (spartz @ Friday 01/12/06 12:35am)


QUOTE
any fool can make money in a bull market and think he's a hero.


Any euphoric fool will believe his own bull.



--------------------
Have a good one

Happy 2





"Knowledge is a process of piling up facts; wisdom lies in their simplification".

Caveat Emptor: the above comments are merely opinion, not advice.
 
spartz
post Posted: Nov 30 2006, 11:35 PM
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In reply to: MasteR on Thursday 30/11/06 10:47pm


That's what I'm wondering too. The real test will be when we have a bear market - or even just a sideways one. As they say, any fool can make money in a bull market and think he's a hero.

Spartz.

 
MasteR
post Posted: Nov 30 2006, 09:47 PM
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In reply to: spartz on Wednesday 29/11/06 12:33am

[QUOTE]

Interesting, spartz. Was it luck or an educated guess or 'Chance'.

Let's see how you go in the new year.

R/MasteR
wink.gif



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"Chance favours the Informed Mind"
 
andy20020
post Posted: Nov 30 2006, 06:43 PM
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In reply to: happy2 on Thursday 30/11/06 11:41am

I appreciate the feeling. I have long since stopped trading futures or options, particularly in the US - I found I was tending to watch every tick when exposed rather than taking in the big picture yet when waiting to trade I was as cool as could be and could generally see the big picture better.

I presume that to be a good trader with your own money on such fast moving indices you first need to be a good trader with other peoples money!

These days I stick to simple charting looking for patterns that I can recognise and ones I historically know have been more successful for me in the past.

But whatever the case I always tend to do OK when I buy when no ones buying and sell when everyones buying.

Regards

 
happy2
post Posted: Nov 30 2006, 11:41 AM
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In reply to: andy20020 on Wednesday 29/11/06 08:26pm

The emotion that I still have to overcome is the fear of the market crashing when I am long. Expecially when I am long the DOW or FTSE.



--------------------
Have a good one

Happy 2





"Knowledge is a process of piling up facts; wisdom lies in their simplification".

Caveat Emptor: the above comments are merely opinion, not advice.
 


andy20020
post Posted: Nov 29 2006, 07:26 PM
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I have this theory. In the US there's far more shorting that in Oz - but in the US you can often see tops and bottoms with volume due to the shorting factor.

In Oz the tops are more obvious than the bottoms as there are more top volume spikes than bottoms.

Consequently it is my opinion that emotional trading is the way to go - you see people buying with emotion - SELL.

Regards

 
frank
post Posted: Nov 29 2006, 06:35 PM
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QUOTE
It also seems to me that the so-called professionals should maybe rethink this "no-emotions" mantra as there are not too many of them that significantly out-perform the market.

Couldn't agree with you more.

e·mo·tion (ĭ-mō'shen)
"A mental state that arises spontaneously rather than through conscious effort and is often accompanied by physiological changes.."
Oh, but these professionals are all above this. Aren't they? They're so in control of their emotions. Comes through years and years of practice.

arrogant (ăr'o-gant)
"Overly convinced of one's own self-importance. Not caring about others. People are only interested in what I have to say or do."
e.g., I traded yesterday and made a profit; I may trade again today; perhaps I won't trade today; I'm reading this or that; I know so and so, etc...
To which I reply "You know, my dog, who was my best friend, died yesterday from cancer"
To which he replies "I got indigestion yesterday because there was so much food that
I couldn't help myself from gorging. Hey, look I did a swivvel on my chair"

Apologies to the non-arrogant readers.
Emotion.. funny thing that.
Keep up the great posts.



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Because I'm in no condition to receive bad news. I shall fine you each 1000 yen.
But you don't pay us, master.
Then I shall start paying you in order to fine you.


Before acting on any of the information you read and making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.These are my thoughts only and mostly just guesswork.
 
happy2
post Posted: Nov 29 2006, 12:08 AM
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QUOTE (john constantine @ Wednesday 29/11/06 12:48am)

Hope you never die, John. Then you will have are real buzz forever.

Just reading an American essay on the benefits of investing in GM. It is all about divvies.

People are saying the same thing about Telstra, too.



--------------------
Have a good one

Happy 2





"Knowledge is a process of piling up facts; wisdom lies in their simplification".

Caveat Emptor: the above comments are merely opinion, not advice.
 
john constantine
post Posted: Nov 28 2006, 11:48 PM
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emotions are good, whenever i get a direct deposit divvie from a long held position, and i buy beer with it, the buzz is very pleasant indeed.
there is no pleasure like the long term,replicable, worked once,benefit for life booze up..

 
 


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