I’m the first to agree that trading is not all psychology, but I’m also the first to point out to traders that I speak to, not to underestimate its importance.

Perhaps part of the issue is that the word psychology has such negative connotations. Perhaps if we talked in terms of thinking strategies or mindset it would be better?

Many traders have potentially profitable trading systems with a great edge that they just can’t trade successful because they haven’t learned to address the big mindset issues – accepting risk, not needing to be right, staying objective so that they don’t see things in the charts that aren’t there etc etc. These issues keep contributing to their inability to be consistent.

My philosophy is find an edge (and continue to make sure it is an edge), put in place sound money management strategies – and then put every ounce of your effort into refining your ability to execute that edge consistently by working on your mindset (and everything that entails).

All the best

Mo

Thanks for the feedback on his first book.

re “psychology is overblown” – I’ve heard people say that “trading is all psychology”, that mastering psychology and discipline is the single most important factor in trading, that emotions are the single greatest block to trading success, that emotional skill is more important than picking entries and exits, money management, and risk management. There have been a number of books that are solely devoted to psychology and typically fall into this trap.

I know that Brett has specifically attacked these views (http://www.traderfeed.blogspot.com/2006/12/three-pervasive-myths-of-trading.html) which is why I was interested in his books in the first place. Framing trading as a performance activity does help put psychology and other factors into their proper place – you need to achieve some minimal level of competence but ultimately trading is about trading, not mind games.

I’m hesitant to agree with you on your feeling that “psychology is overblown” without really knowing what that means. Do I think some folks improperly place it on top of everything else and claim it’s the most important thing? Yes, I do. Brett does too. That said, do I think psychology is important in trading? Absolutely – as it is in all performance activities.

I too don’t have any psychology background, but I heartily agree with you that, in my case, the struggles I had weren’t solved by psychology but by finding a better match for my abilities. I believe that the idea of working on your weaknesses may be a good idea for an elite performer but for the rest of us the best results come when we find a way to minimize the consequence of our weaknesses while focusing on our strengths. We’d be more successful and much happier.