The Psychology of Trading: Tools and Techniques for Minding the Markets 1st Edition

If you know you have an edge yet over and over again you fail to realize it in your PNL, give this a read. I read mark douglas many times and i know you have to play each hand like a casino and let it workout, but this book is for those who done it for years and know the only thing to left to conquer is yourself. the market is like a therapist - everybody wants to give the same tired advice to those in distress but if you observe your patterns you’ll see they are just like the patterns in the market, full of highs and lows and reversals. i have tripled accounts only to blow them out. my favorite nugget was thinking about your own emotional vix.

One of the best books I have read, and I have read many. The author is an excellent story teller and professional.

This is a fantastic book and anyone thinking of buying it should definitely listen to some of the points in this review.First off, this book and its insights are very well thought out. You get the sense that this author is not some hot shot. He is a down to earth human and it is easy to emphasize with him in many of his stories of emotional swings in the market.The author is able to take the psychology of trading and apply it to the real world. All too often new traders think of trading as one thing and life as another. As someone who has been on this path for awhile, things begin to merge as you find that your problems in life carry over to your problems in trading, and to be a good trader for long periods of time, you must also be good at living well in general.I have read reviews complaining about the stories and their relevance. There is a inkling of truth to these statements, but they usually come from readers who are not well experienced in the markets. This book is very subtle in its own way and many of its pearls of wisdom are not "smack you in the face" statements. This book is definitely not for those who are brand new to trading because they will not have the experience that lets them understand how the stories this author tells are relevant to his trading.So what is the use of this book if you have to already know what he is talking about to read it? Well the author definitely puts things that are already deeply understood into new context. Putting this market wisdom in new ways is always a great way to solidify your mental structure and sometimes be able to apply it outside of your previous focus.All in all, I would tell any trader that they have to have this book on their shelf, but that it is a book to be read many times, chapter by chapter, not all at once. Like Market Wizards, Disciplined trader, or Rem. of a stock operator, this book requires patience and an understanding of subtlety. You will get new insights every time you leaf through it.Concerning his last chapter and sometimes throughout the book, he is definitely on the leading edge of where trading is going. Before computers became very powerful, most good traders needed implicit knowledge and experience to trade. Now that computers have taken over quite a bit of the playing field with Quant funds and technical analysis, sometimes this old "seat of the pants" trading is called undisciplined hogwash. However, the best traders will be able to use the new psychological information about instinct, combined with the technology and discipline of systems, to become proverbial Michael Jordans of Trading. Very very interesting stuff.

I just rated Trading in the zone. This I think is at least as good, but maybe more complicated. I tried one of the newer versions (how to be the best trader you can be) but I liked this and the basics better. I got unsure If I finished it all, I will have to check. Anyway, Mark Douglas and the Steenbarger learned me that my psyche is the reason for what I do wrong. I think reading this and Trading in the zone (and maybe use daily coach 101 regularly, to improve on your problem areas) is a better investment that 20 books about systems and other "how to trade books". Of course, you need some basic skills in the method you use, but when you know how to enter, then psychology takes over and you move your stop and profit target and ending up risking like 10 points to scalp 1, or maybe not even cover commission...Use correct stop loss and calculate where the target should be. then leave it. (Until you may move stop after a new major high/low.) I am going to try to double my stops and use discretion regarding my exits. It may be selective memory, but I think that I would make very good money keeping my original plan if not stopped out by under 1 pt/2 tick or something (I refer to eminis). You need to be very good at having a good idea on the probabilities for your move to reverse, because this tactic needs you to see when the plan is working or not and your ability to just take the loss before your stop is hit if you see market changes. You also will need to see the same thing regarding targets. However, when you start getting good to reenter again, there is no problem to take profit and then enter again. This is very hard for most traders. I try to always think: If I were flat, would I buy or sell now? It helps getting rid of your bias you get at once you have your trade on, and only focusing on the moves going in your direction and not seeing a trend developing against you,(It seems I need to write a trading book, but it seems to be enough of them. Since markets have functioned the same way for centuries, there is a limit of how many techniques that have a new approach...Of course, computers/automated trading has changed the way some people trades, but the markets are the same anyway, except of course faster trades and more liquidity.)