{"id":56015,"date":"2016-07-24T03:00:43","date_gmt":"2016-07-24T10:00:43","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=56015"},"modified":"2018-03-25T03:57:53","modified_gmt":"2018-03-25T10:57:53","slug":"psychology-confidence-mistakes-fear","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/pt-br\/ask-al\/psychology-confidence-mistakes-fear\/","title":{"rendered":"Ask Al: Trading psychology issues"},"content":{"rendered":"<h2>Lacking confidence, making mistakes, and fear<br \/>\n BPA trading room Q&amp;A: October 13, 2015<\/h2>\n<p class=\"content-box-green\">Question:\u00a0 I was able to read the price action pretty well today, but have a hard time trusting my read.\u00a0 Do you ever have the same problem, and do you have any suggestions?<br \/>\n <em>Video duration: 8min 10sec<\/em><\/p>\n<div style='position:relative;height:0;padding-bottom:56.25%'><iframe class='sproutvideo-player' src='\/\/videos.sproutvideo.com\/embed\/a09adfbb1318e6c728\/05a548102bce1483?playerTheme=dark&amp;playerColor=' style='position:absolute;width:100%;height:100%;left:0;top:0' frameborder='0' allowfullscreen><\/iframe><\/div>\n<p><\/p>\n<p class=\"caption\">You can also view this video on <a href=\"https:\/\/youtu.be\/h8XZCXWnlg4\" target=\"_blank\" rel=\"noopener\">Al&#8217;s YouTube Channel<\/a> if needed.<\/p>\n<h3>Trading psychology: In a gray fog<\/h3>\n<p><a href=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/07\/ask-al-brooks-69-trading-psychology-medley.jpg\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/07\/ask-al-brooks-69-trading-psychology-medley-300x208.jpg\" alt=\"Ask Al Brooks - Trading Psychology Issues\" width=\"300\" height=\"208\" class=\"alignleft size-medium wp-image-56032\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/07\/ask-al-brooks-69-trading-psychology-medley-300x208.jpg 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/07\/ask-al-brooks-69-trading-psychology-medley-768x533.jpg 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/07\/ask-al-brooks-69-trading-psychology-medley-600x416.jpg 600w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/07\/ask-al-brooks-69-trading-psychology-medley.jpg 858w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>Well, you know, that goes back to my comments that when you\u2019re trading. You live in a gray fog, and you start to see something clearly but you\u2019re really never sure that it\u2019s as clear as you want it to be.\u00a0 But that\u2019s life as a trader.\u00a0 Everything is in a gray fog, and you start to see some shapes and you start to see some forms. But you\u2019re never really certain what you\u2019re seeing.\u00a0 You think you might be seeing something that you recognize, but you\u2019re never really certain.<\/p>\n<h3>Compensating for lack of clarity<\/h3>\n<p>Remember, 10 percent of the bars every day are in a breakout like this [B7] or like this [B40].\u00a0 Here [B70], we had maybe more than 10 percent.\u00a0 But most days, about 10 percent of the bars are in a breakout, and you should only trade in that direction.\u00a0 90 percent of the bars are either in a channel, which will become a trading range, or in a trading range.\u00a0 And in those cases, you can pretty much buy or sell at any time.\u00a0 If you manage your trades correctly, you can scale in, use wide stops and scale out properly.\u00a0 So that\u2019s how you compensate for that lack of clarity.\u00a0 You only really have clarity during the breakouts, so what do you do during bar 3?\u00a0 If you\u2019re doing anything, you\u2019re buying.\u00a0 What do you do during bar 40?\u00a0 If you\u2019re doing anything, you\u2019re selling.\u00a0 What are you doing during bar 70, 71?\u00a0 If you\u2019re doing anything, you\u2019re selling.<\/p>\n<h3>Probability rules<\/h3>\n<p>It\u2019s clear that that\u2019s what you do.\u00a0 The probability is higher than 60 percent; it\u2019s probably 70 percent that the best way to make money is to trade in the direction of the breakout.\u00a0 During the rest of the day, you\u2019re in that gray fog where everything is 40 to 60 percent. If you\u2019re reasonably confident, you\u2019re 60 percent certain.\u00a0 If you\u2019re really \u201cI\u2019m not confident at all,\u201d you\u2019re 40 percent confident.\u00a0 Pretty much everything during the rest of the day is 40 to 60 percent, any buy, any sell.\u00a0 And if you prefer high probability, you have to be able to know where your stop is, and it\u2019s better to trade in the direction of Always In.<\/p>\n<h3>Trading Always In<\/h3>\n<p>So let\u2019s say on bar 42 close you decide, okay let\u2019s say somewhere in here, Bar 46 close. You\u2019re deciding where the high probability trade is.\u00a0 Well, first you have to decide <a href=\"https:\/\/www.brookstradingcourse.com\/how-to-trade-manual\/always-long-always-short\/\" target=\"_blank\">Always In Long or Short<\/a>.\u00a0 Probably still Always In Short. Next, you have to decide on where your stop is.\u00a0 Maybe up here [above B39\/40], maybe &#8212; maybe if you want a tight stop here [above B46]. So then you say, \u201cOkay, I\u2019m going to sell the 46 close, so I\u2019ll sell below 47, and I\u2019ll put a stop here or here. And if I\u2019m able to, I\u2019ll add on higher, either with a limit order or wait for a rally and then sell below a bear bar, like below 67 or below \u2013 we didn\u2019t get much of a rally here.\u201d But that would be the general idea. That\u2019s how you can increase your probability in an environment where the probability is 40 to 60 percent.\u00a0 You scale in.<\/p>\n<p>And it\u2019s just practice, okay?<\/p>\n<p class=\"content-box-green\">And another question: Al, did you ever have the same problem?<\/p>\n<h3>Making same trading mistakes over and over<\/h3>\n<p>I\u2019m assuming it\u2019s in reference to the question I just answered. I\u2019ve had every problem &#8212; every problem that you can imagine.\u00a0 Every problem that you\u2019ve had, I\u2019ve had it, plus I\u2019ve had dozens that you\u2019ve never encountered but you will if you trade long enough.\u00a0 I\u2019ve done this close to 30 years now, and I\u2019ve screwed up in every conceivable way.\u00a0 And I\u2019m really smart, so I\u2019ve been able to come up with all kinds of ways that most people would never think of, and I\u2019ve screwed up in all kinds of special ways.\u00a0 But I\u2019ve screwed up in every way. And I\u2019ve <a href=\"https:\/\/www.psychologytoday.com\/blog\/anger-in-the-age-entitlement\/201410\/how-we-make-the-same-mistakes-over-and-over\" target=\"_blank\" rel=\"noopener\">done the same mistake<\/a> sometimes dozens of times over the course of years before I finally decided that I was an idiot and I had to stop.<\/p>\n<p>So whenever someone asks me about something and they ask, \u201cHave you ever had the same problem?\u201d the answer is a very strong \u201cYes.\u201d\u00a0 And I probably made the mistake many more times than you, and I probably made the mistake much worse than you.\u00a0 But that\u2019s &#8212; you know, I\u2019m being honest.\u00a0 So yes &#8212; at this point in my career, I am not surprised by anything, and every time I see the potential to do something stupid, you know, I think back \u201cYeah, I used to do that.\u201d\u00a0<\/p>\n<p>So yeah, yeah.\u00a0 To answer your question, yes, I\u2019ve had any problem that you can possibly imagine.<\/p>\n<blockquote>\n<p>&ldquo;Insanity: doing the same thing over and over and expecting different results.&rdquo;<\/p>\n<p><cite>&mdash;&nbsp;Albert Einstein<\/cite><\/p>\n<\/blockquote>\n<p class=\"content-box-green\">Okay, question: Buying below a bar obviously means buying a great bear bar at point of entry.\u00a0 Any idea how to overcome the fear to enter in such a moment?<\/p>\n<h3>Limit order trading fear<\/h3>\n<p>So he\u2019s saying this:\u00a0 If you\u2019re buying below bar 50, right, you\u2019re getting filled on bar 55 at a point when it\u2019s a very good-looking bear bar.\u00a0 If you\u2019re buying below bar 55, at the time you\u2019re filled it\u2019s a bear bar and it\u2019s growing, and you\u2019re afraid it could end up looking like 70 or like 40 and having a lot of follow through.\u00a0<\/p>\n<p>To me, what I\u2019d do is I\u2019d just use a stop, and if I get stopped out, that\u2019s how when I get stopped out.\u00a0 I\u2019m usually willing to scale in, and use a wide stop and that increases my probability, and you can see traders who were buying lows here below 45, below 50, below 55, below 61, right, they certainly were not happy by 70 close, 71 close, and they may have just exited there.\u00a0 But some of them said, \u201cScrew it.\u00a0 We\u2019ve had so much trading range price action today.\u00a0 It\u2019s unlikely the gap below 61 will stay open.\u00a0 I\u2019ll just buy more two points lower, and try to get out at the 60, 61 low\u201d.\u00a0 So as long as you understand what the market is trying to do, you have a much better chance of being able to do the right thing and not getting scared into doing the wrong thing.\u00a0 In other words, you have a much better chance of making money than losing money.\u00a0<\/p>\n<h3>Limit order trades not for beginners<\/h3>\n<p>However, when traders are starting out, I do not think they should be buying the 50 low, the 55 low, the 61 low, the 72 low.\u00a0 But after you\u2019ve traded a long time, you start to see stuff and it\u2019s totally the opposite of what you think.\u00a0 You know, you hear people saying, \u201cOh, you got to sell below 45; you got to sell below 50,\u201d and to me, that\u2019s dumb, right? If you\u2019re going to be selling in a market that\u2019s most likely converting into a trading range or a bear channel, it\u2019s better to be selling above bars instead of below bars.\u00a0 And it takes a long time to make that adjustment.\u00a0 Everything\u2019s counterintuitive.\u00a0 You got to think about if I\u2019m a beginner, where would I be getting in, where would I be getting out.<\/p>\n<h3>Understand your emotions &#8212; trade logically<\/h3>\n<p>And if I\u2019m a beginner, I\u2019m losing money, and therefore the experts are doing the opposite of me and they\u2019re making money.\u00a0 So how can I get to the point psychologically of doing the exact opposite of what feels natural?\u00a0 And it takes time to get to that point, but once you\u2019ve lost often enough and lost enough money, you start to realize that what feels natural based upon experiences of everyday life is the exact wrong thing to do when you\u2019re a trader.\u00a0 And it doesn\u2019t matter if you\u2019re trading commodities, stocks, trading houses, trading cars, trading anything. It\u2019s still the same process. And it is a rational behavior, and if you\u2019re really good and objective, you can make a lot of money buying or selling anything.\u00a0 You just have to understand human behavior and what is logical, and get away from what is emotional.\u00a0 What is emotional is, \u201cThe market is falling, I better sell below lows.\u201d\u00a0 What is logical is, \u201cAah\u2026 I\u2019ve seen a lot of trading range price action today.\u00a0 I bet if it falls below lows, bears will take profits and bulls will buy for a scalp.\u201d\u00a0 \u00a0And it takes a while to be able to look at it logically and figure out what is likely to happen.<\/p>\n<p>All right, hope everybody has a good night.\u00a0<\/p>\n<p><em>Al Brooks<\/em><\/p>\n<p><a title=\"Al Brooks&#039; trading room\" href=\"https:\/\/www.brookstradingcourse.com\/online-day-trading-room\/\">Information on Al&#8217;s Online day trading room<\/a><\/p>\n<hr \/>\n","protected":false},"excerpt":{"rendered":"<p>Lacking confidence, making mistakes, and fear BPA trading room Q&amp;A: October 13, 2015 Question:\u00a0 I was able to read the price action pretty well today, but have a hard time trusting my read.\u00a0 Do you ever have the same problem, and do you have any suggestions? Video duration: 8min 10sec You can also view this [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[159],"tags":[],"class_list":{"0":"post-56015","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-ask-al","7":"entry","8":"has-post-thumbnail","9":"override"},"featured_image_src":null,"author_info":{"display_name":"BTC Admin","author_link":"https:\/\/www.brookstradingcourse.com\/pt-br\/author\/richardhk\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/56015","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/comments?post=56015"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/56015\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/media?parent=56015"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/categories?post=56015"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/tags?post=56015"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}