Re: Psychology and Methology

["Tom Cathey" <K1JJ@xxxxxxx>]

>     The way I see it is psychology is 90% of the game won, and methology
is
> the other 90% and together 90% + 90% = 100%  ;- )
> 
> Happy trading,
>   Jim Wong
> 


I think you're correct, Jim....they being equal.   In fact perhaps there
may be three areas, and they are all equal.

33% Forecasting Method         
33% Money Management
33% Stable, Disciplined Psychology to carry out the other two consistantly

Here's why:

1) We need a forecasting method where you have thoughly learned it's
strengths, weaknesses and anomalies. It must have some kind of edge and can
change with the market. Otherwise, just using perfect money management and
perfect psychology, WE WILL LOSE OUR ASSES if the method gets in and out of
the market at the wrong times...period.

2) We need a money management method. Otherwise, just using exellent
forecasting and disciplined psychology, WE WILL LOSE OUR ASSES if we put
all our money on a few trades, or take huge losses, etc....period. 

3) We need Stable, Discipline to carry out all aspects of trading.
Otherwise, just using exellent forecasting, perfect money management, WE
WILL LOSE OUR ASSES if we miss trades through fear, overstay our welcome
through greed, and generally waver on our descisions.

I feel THAT's why it's so difficult to CONSISTANTLY make profits. If JUST
ONE aspect falters, our bank balance falters like a house of
cards.....considering the leverage involved with futures.

All it takes is a changing, unusual market to throw off our forecasting
method.
All it takes is a bad trade or "bad day"  to throw off our psychology.
All it takes is changed psychology  to "change" our money management rules.

In order to make money (generally) we must be firing on all cylinders. MOST
traders have one or two of the above together, but it is a rare person to
have all three aspects under control most of the time.


My humble opinion. <g>


BTW, I just had one heck of a trading run this last week, best of the year.
 (Oils, Gold, Sugar, Hogs) and am starting to feel frazzled. Today I
started to make some stupid mistakes. Took the last profits at the
close....now flat.  Seeing these mistakes today told me to stop trading for
a while. I always lose money after a good run trying to push further. In
fact, I have NEVER traded myself out of a trading slump...ya just gotta
stop completely or give a lot of it back to the market...take your pick.
I'm resting 'til sometime late next week. The psychology aspect is gone
right now. <g>


Tom Cathey