Thread by @ProdigalTrader

Right Trading Psychology - Role of conviction on ur process & practical way to build it

In my early days
trading wasn’t making progress
I had no idea if my approach would work
Does it have a high probability or not

Took a big leap when I started to learn coding

Thread 1//22

Once I started coding,
I started mechanically checking the set ups I use
Surprisingly I found that I oversee majority of the failure set ups
& end up understanding am playing on low probability set ups
I was betting more on hope than on fact.

2//22

That forced me to test everything before executing
becz
I knew I tend to see what am looking for
Not what actually was there in front of me.

Then
I went on to test

3//22

If a strategy is viable
Does it have high RR historically?
Does it work on all scrips?
If not, what scrips comply with it?
Does it give movement fast enough or just spike near to market close
Is it scalable or not
If scalable, what scrips comply with that?

4//22

For scaling up, what r the optimum position size at various stages
How many times potentially scale up can be done in one trade on an average
Is it viable to scale out or needs to exit in one go
What r the scrips needs to manage with all in/all out in one go

5//22

Does it obey any TSL method?
How does it work in different market conditions?
How many of the signals are getting avoided in range bound market
What are the chances to escape from a major market counter move?

6//22

Does that performance improves in recent times compared to former period
How much maximum position size can be attempted with each scrips?
If movement doesn’t come after entry, the time period beyond which it won’t come (time stop)

7//22

The optimum RR against strike rate
The scrips which hits SL frequently
Demand conditions in market where signals end up as traps

(these are just example parameters.
I personally test few other factors as well.
I woulld like to keep them with myself)

8//22

Even the minutest details were put to the test
Which resulted in the trust I had on my approach.
Now, I know the tools, methods and strategies I use for

Entry, SL and exit
Scaling in/ scaling out
Risk management
Position sizing
Compounding

9//22

stood the test of time in the market and have higher chances to do the same.
Hence whenever things aren’t going my way
I know there is nothing to panic
Just needs to avoid making mistake, rest are already taken care of.

10//22

"Behind every heart breaking story in stock market,
there is a senseless mistake
which was committed out of ignorance"

The moral is conviction and trust on urself and ur process
Develops thru a thorough mechanical process.
Thats what lead to right trading psychology.

11//22

Right trading psychology is not about reading motivational messages, meditation,
Or reading psychology books

Look thoroughly,
All motivational messages are mere justification to the mistakes u r making
& helps only 2 stay in that delusion of "U r not wrong at all" again

12//22

The way I know trading psychology has nothing to do with ur mental strength
It has much to do with Ur coding skills/backtesting than with ur mental strength
It’s the result of the trust u develop on the process u r formulated

13//22

Make it completely mechanical,
make sure that everything is tested for the viability
There by removing even the traces of self-doubt

Nothing remains to blame anymore

14//22

Now when things arent going ur way, u are self assured that u r betting on high probability which has a procen record.
That stable assurance on ur process removes lot of stress from ur trading

Now, u r in the right mindset

15//22

If u look around,
u would c many traders around u would preach about the importance of screen time
&
y u shouldn’t use scanners/mechanical trading systems
They will advise u instead of opting for the scanner
u should prefer to scan with ur eyes
&
develop required skill

16//22

Imagine,
in the past when computers were introduced in India, thr were lot of protests against it blaming that people will lose job & unemployment would increase.
Now think about a world whr it was accepted
We would have been at least 50 years behind the rest of the world

17//22

So do not commit to the mistake,
that the tools & methods existed 10 years back
& even if it’s popular even now,
of being comfortable with what u know,
refusing to learn new things.

18//22

Pretty soon they will be outdated
Coding skills u should have learned yesterday
If u didn’t, then start now, start today
U r not late yet
A person who lacks a definitive method of back testing his process inside out
is just throwing blind
&
destined to perish

19//22

Alternative method is go for
thorough manual back testing of strategy,
scale up potential,
ideal RR
&
compounding prospects with the method.

It’s hectic and time consuming. But it’s doable

20//22

At present,
if any new idea clicks in my brain,
all it takes is 15-20 minutes for me to check if it’s viable
If found not viable, ditch it
If found interesting then, it goes thru the above mentioned process.
Once passes, put it under the fire test by the market.

21//22

The trust and conviction u develop this way is called Right Trading Psychology.

(thr may exist other ways to develop healthy trading psychology.
Dont just deny its exixtance if u do not know abt it.
From person to person, how to acheive it may differ.
Be open to ideas)

22/22