Traders Psychology and why 90% of traders fail

1) Anything can happen – there are always unknown forces and traders operating

2) You don’t need to know what is going to happen next to make Money - So long as you have an edge then the laws of probability will decide the outcome over a series of winning and losing trades. Market info is only threatening if you expect the market to do something for you. If you don’t expect the market to make you a winner every time you will have no fear of losing, if you don’t expect the market to keep going in your direction you will take profits off the table. If you believe this then how can the market make you wrong. If you believe anything can happen then you will always be right. If the odds are in your favour then every loss puts you closer to a win.

3) There is a random distribution between wins and losses for any given set of variable that define an edge. : If you believe this then you will be looking for anything that meets your criteria of an edge and jumping in without hesitation. If you still believe trading is about analysis for each loss you will be doubting your edge and gathering yet more info.

4) An edge is a higher probability one thing will happen over the other. The only evidence you need to gather is whether the variable you define as an edge are present at any one time. When you use other info you are adding random info outside of the parameters of an edge to your trading regime. This will create a random inconsistent approach that will lead to random inconsistent results. Why bother gathering further info, if the market is offering you a legitimate edge, determine the risk and take the trade.

5) Every moment in the market is unique. If each moment is like no other then how can you know what will happen next, so why bother trying to know. The best traders have trained their mind to believe in the uniqueness of each moment. If you believe in this uniqueness you will not associate and your mind will be open to perceive what the market is offering from its perspective.

You will enter “the zone” when you are tapped into the “now moment” opportunity flow. This will happen when you are at peace with not knowing what’s going to happen next and make yourself available to the market.

Trading in the Zone

Boring Update

The market recovered today after the huge drop yesterday caused by the selling of DBP-Daiwa of index issues, gaining 49.18 points back, higher by 1.24% at 4002.88 - back at the psychological support. Will the market start bouncing from here? Probably. Probably not. If the market continues to be weak, next possible resistance would be at 4120 before it starts heading back down. The next good thing that it would do is to retest the recent low at 3953 levels, before heading back up with the resumption of the uptrend.

On the weekly charts, the index is probably at the bottom already so if the index starts moving back up again here, that would be a better confirmation of what's going to happen next.

Looks like the buy signal that AP generated yesterday is good. A lot of AP shares are now in the market with an average of 32.80 and looks like the big guy is done accumulating shares already so I think they are going to pump the stock now.

Technical indicators are pointing up suggesting further advances in the short term, probably up until late next week or early the week after. However, I'm still assuming I'm wrong until proven otherwise.

AGI is looking great too as it is currently forming a ascending triangle pattern(bullish) with a possible target of 14.80. Price is currently at the lower part of the pattern which should have provided a good entry for those who have appetite for risk. For the conservative ones, an upswing in the weekly chart should be their signal.

AP is up by 23.02% within 27 trading days with doubled up position.

*Wanted: Metastock for christmas!