The psychology of why you stay in losing trades (cognitive dissonance + live analysis)
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- เผยแพร่เมื่อ 6 ต.ค. 2024
- A couple of the reasons why we double down on a loser instead of exiting when we are wrong about a trade. This one took a long time to make. Hope you enjoyed it. Why are you down here in the description? I never put anything helpful in these. I don't even know why I'm writing this. Have a good day.
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Risk disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
"A reason to do something that happens to be the same reason for doing the opposite thing is not a good reason to do something."
I love this.
Morale of the story is : Trade what you see, not what you think, exit quickly with a small loss if the trade is going against you,wait for the setup to arrive and enter again. A small loss is very easy to recover than a big giant loss. " Always remember, Small loss Small Pain, Big loss Big Pain "
Recently addicted to your videos bro after watching your supply and demand video. You deserve more subs from the trading community.
Thank you very much!
same here started with the supply and demand videos
Exactly what I'm facing too 😂😂
He's good
I took my first trade yesterday!( demo mode) I was so happy!!! I did well and toke 39$profit-BUT then my sneaky ego crept in😮. Ok just add more contracts you’ll make more money its in demo mode( greed and manipulation of the ego). I was wrong and lost $1300😮. I quickly realized how undisciplined my mind really was. When I was about to lose I tried adjusting it. Then I really realized how much work I have to do. For someone new to trading I understand it from a technical perspective; however, what I soon realized is that we are the placebo within trading. It is actually reflecting back to us who we are in the shadows of our mind. This may be the reason for the high failure rate. It exposes the things which we are socialized to hide. Our beliefs are soon exposed whether we believe it or are aware of it or not.
This video is gold honestly, the example is just priceless
Ah, the old average down my options and hold over the weekend while keeping your GF up Sunday night because you are checking futures anxiously. I was there in the beginning too. You've seemed to quickly grasp that trading is much more learning how to lose, rather than learning how to win. This usually takes people years, so kudos. Your videos are spot on, and the stock videos you use are underrated!
Keep it up man, you're a breath of much needed fresh air in an otherwise pretty toxic YT trading environment. Aka "This one indicator made me 10 million in 3 seconds!!!!" "Market makers hate this 1 trick!!"
Oh and Merry Christmas
Thank you very much :), and Merry Christmas to you too!
I have been a victim of this kind of thinking and it has cost me dearly. I heard in someone’s video, or maybe it was one of yours, someone said, “I don’t want to be the best trader, just the most disciplined trader.” That philosophy would have saved me greatly in the past. I working towards that now.
I really enjoy your videos bc I am very interested in human behavior and why we do the things do. Keep them coming please. 👍
Thank you very much :)
This run down was fantastic. I’ve certainly been there before. I remember buying tops and selling bottoms and doubling down… good gravy. Now I’m making a point to predefine risk and only use on-chart trading with a logical stop and trading very low quantity to get my reps in. A far cry from where I used to be.
Probably the most important trading video I have ever watched! Such an important fundamental concept. Nicely done!
btw, "a reason to do something that happens to be the same reason to do the opposite thing is not a good reason to do something"...makes sense to me!
This guy risked almost 5K to win $600
huh
Literally.
That's how it works hoss... Glad you're caught up
Hell naa@@CloudParadox-is1jc
Nice one emmanuel! And thats why we use stop loss orders! Im proud of you!
Averaging is the lazy alternative to figuring out where to get good entries. This is huge. It does not exclude a distributed entry in a price region, since made BEFORE your first entry. Lock in your platform to add to a losing position has saved me.
Dude, that recorded trade is gut wrenching. Not because of the loss of money but because of how he handled it. I won't even be looking for a long at that point. It screams short with that big ass green candle.
Quality content and that ironic clip of him stating what is a dunning Kruger effect 🤣🤣🤣
Lol thank you 😁
You know what buddy? I fuckin love u. Godbless brother
Haha thank you
Concept of risk management and time efficiency is missing. That’s why people hold on to it. If trade going against you. Close it, and when as soon as it reverts open it.
0:09 "The answer to this includes many psychology terms, but one of the big ones that affects investors and prevents some people from becoming successful traders has to do with something called cognitive dissonance." This video was just specifically about cognitive dissonance and rationalization
avg in, my biggest enemy. The worste thing that can happen is, that is works, time and time again. Until it doesn't, and thats game over. The moment you are in a position, you are a cheerleeder for that position, ignoring evidence that go against your belief and putting to much weight (or imagine) evidence that supports your belief. I think it's confirmation bias.
This is the bane of my existence, it's what is keeping me from doing this full-time... I've recently opened a Webull account as a side "small account challenge" (My main account is TDA). Put $1000 in and I make small day-trades here and there. 26 trades so far.... 19 wins and 7 losses. Total profit of $86. I continue to let my losers RUN and cut my winners TO EARLY. Gotta break the habit, man, gotta break the habit.
It’s what gets all of us! Have you tried implanting “hard” rules? Like, determining your stop loss before the trade and getting out immediately if it gets there? I’m not sure about Webull, but on NinjaTrader I have bracket orders where I move the stop loss directly on the chart as a line. Only direction I’m allowed to move it is closer to my entry or to lock in profits. Bracket orders create a sell order at a specified price which goes live as soon as you do a buy order, so if it hits that price the position is closed. I love it because it doesn’t give me the chance to make the mistake I did when I first started. Glad to hear your small account is going well though :)
@@ImanTrading thanks! yea webull has the ability to add stop-loss and take-profit prices before placing a trade.. i'm just a dumbass lol. Was up $1072 on the small account but then took two big losses roughly $1000 between the two.. so now i'm at +$86. One thing is for sure I'm never making another trade without a stop loss. I swing or long term invest with my TDA account so the whole day-trading game is new to me. I'll get better as time goes on, main reason I told myself I would only start with $1000 in the small account challenge, I don't plan to lose it, but I can afford to.
@@ImanTrading oh and I actually watched that video of Clay's when he uploaded it, I follow him too because, for the most part, I like to watch "how not to trade" lol... good thing for him he has enough money where continuing to average down can work for him. this doesn't work for most traders. Got yourself a new sub, good video.
@@TuSevun oh crap my bad! Thought you meant +86 added to the starting balance. Hey, it’s an expensive lesson, but one that’s much more valuable than any other one, or is that what I tell myself to cope with losing $2400? Probably both lol. Automatic stop losses are game-changers.
@@TuSevun he inspired me to make this lol! And thank you very much :)
The worst part about it for him is that he got out of the trade with a profit. Why, because reinforces bad behavior. I know because I've done the same thing. You think to yourself, if I got out of the trade when it broke the trendline I would have taken a loss but by doing what I did I was profitable. It reinforces you to think you did the right thing because you made money instead of losing it. He may not be so lucky the next time.
I know why I'm losing now. I will continue to watch your videos and get a check on what I was doing back then
thanks btw
This is absolutely top notch psychology video you can't fine else were. I love this video man, thank you so much for this, I needed to see this. Pls someone like my come, I'd love to come back and rewatch this video over and over again.
Thoroughly enjoy how you explain the Psychology of a trade, especially with the example in the video.
Thank you very much!
in regards to pointing out how many of your viewers watch the entirety or who dont subscribe. my thoughts are though i understand the want to grow the channel, although with trading, personally i would care more about the people who do enjoy watching your videos to the end, as entertaining as you are, im here for your insights, especially the psychology. Even if you weren't comical, i feel like their would still be a solid [portion of people that want to hear what you have to say. The people who are really trying to excel and help each other in your community. I appreciate you see through alot of the traders who make B.S videos, and i dont just mean the obvious ones who sell courses or code. There are so many trading videos of people speaking nonsense or just waste your time with shiny indicators or the trading "vibe" like their cool setups and whatnot. anyway i know you didnt ask but just wanted you to know, you and your way of thinking is appreciated. keep it up
-zara
also female here! saw your stats being 100% men lol
plenty of women moving into trading, hope they find your channel
Thank you so much Zara. I needed to hear that, and you’re completely right. I will make sure to correct my intro to “hello Zara and gentlemen” 😁. Again, thank you for the kind words. Very happy to have people like you watching my videos.
@@ImanTrading “Zara and gentlemen” 😂😂😂
Superb content is an understatement. Your whole consists of pure gold .
Thank you very very much 🥲
When i decided to start learning how to trade, i found myself studying more about psychology 😅.
Dude you got the best channel! Info packed, and good jokes! Very entertaining!!! Thx bro
$keep it real
You are the most logical youtube trader in my opinion
I love all your videos man 😪😪 I thought I should give up on trading Forex but after seeing your videos I realized I was looking at everything the wrong way and I gotta say I'm falling in love with trading 🙃And I know how hard it really is to trade and how much time and effort I really need to put in.
Great stop loss importance video
It's easy to tell people what they should do in what is wrong, but executing and not doing the same mistakes that is hard. The whole youtube is flooded with advices so why we can't do what is in our best intention. I am sure we all know what is right to do but that is after the fact.
i had to watch this video well 1 year ago! amazing delivery - amazing insights - and jokes are incredibly funny - this dude should have 1 million subs... incredible!
How your mind works against you sometimes, not just in trading. Great video dude
I'm learning so much about myself from your vids, I hope your channel gets super big
Great work on the channel! The end of this video has not gotten the credit it deserves so I have to post a comment. The zoom and cut omg 😂
Haha thank you
BRAVO BRAVO BRAVO!!! i just discovered your channel!! but you do know a lot !! great work brother!! BRAVO!
Just joining in here with fresh eyes, was wondering if you've considered that he (claytrader) was simply adapting and making a split-second decision as to whether or not to try a different trade? Unless he's confirmed this, I feel like maybe it's possible he "considered" exiting the position, but then changed his plan to averaging down instead due to some other factors. I agree that's definitely a big risk and a decision he shouldn't have taken lightly (maybe he had really good justification for a recovery, idk), but I do like to give folks the benefit of the doubt sometimes. He may have changed his plan multiple times within that time period, so I still agree with everything you said, but I also am aware that it is important to adapt to the market you're trading in and switch things up when your initial plan goes belly up.
Your appreciated, the funnyness makes everything better! Thank you 💯
😁 thank you very much
20:03.. When that video started & he's explaining EXACTLY what he just did -- I died laughing!!! thanks for putting this together! LOL
Great example bro.
Thanks :)
My honest gratitude and congrats for your great videos!
By looking at the graph that you have shown, if i am buying, I would have exit it, no doubt.
In all my years of smoking cigerettes(shamefully) and eating carrots, I have never linked carrot and cigerettes being similarly shaped! Ever!!
Great content btw. I recently started keeping a journal and paper trading new ideas!
exactly what I saw someone experience they kept thinking exactly what he was it is insane. The worst part though is that they sold at a huge loss right when it reversed which really messes with your head and made new All-time Highs.
Trading can be very painful!
@@ImanTrading indeed it can be
After I cut loss when stock did not go to my favor, then it came back and went to exactly my plan. Because It happened many times, I started to keep my losing trading and hoped my stock came back to my favor.
Tell it!
Great video. Love psychology topics.
Thank you! Glad to hear that. Many more on the way :)
I love your channel an I only found it yesterday, I been learning about a year now an made progress but it's like I've hit a ceiling. You vids feel like more progress for me mentally tho... One thing I struggle with is understanding pips or points on us30 gold an forex. Can you make a vid on everything a person needs to know on pips or points. For calculations for the stop-loss an take profit
Thank you so much! I’m happy to hear that. I’m no expert with forex, but reddit is a great resource for those questions. Just type your question into google and add “reddit” at the end. It’ll bring up instances of people wondering similar things :)
I'm new to the channel and can't believe I haven't subscribed earlier. Superb content!
Thank you so much!
Thank you for the continued great content!
Im so glad i stumbled over your channel. Send you a big ❤ from my ❤ for your hard work.
The live trade was actually painful to watch.... because it happened to me too....
after watching ur videos..
i have create a super system..
it has green days in beacktesting..
but when i start live trading..
fear of loosing money kicks in 🙀
so i modify my stoploss too tight🤦🏻
stoploss hits and loss money 😿
after end of day when i backtest,.
it was profitable trade if i followed system correctly
but due to lack of disciplline trading,
only little profit
brokerage more than profit 😿
Sorry to hear that, but glad to hear you’ve found a good system. If the stop loss means you will be losing more money than what you are comfortable with, than you need to reduce the position size. Go extremely small and gradually increase the size over the next few months when you have demonstrated that you can handle bigger size. My anxiety video has more on this. You’ve got this!
This really helped me bro 👏❤️
Just found your channel, finally someone exposing all these frauds. Do a video on that martini guy from the cryptosphere!
the ending with clay saying EXACTLY what his dumbass did tho 😂
i continue to come back to this video, and all your other videos.
I know we mostly watch such videos to learn but can we take a moment and appreciate this guys ingenious sense of humour 😂😂
Love your Video, from ARGENTINA!!!
Grate concepts!!
Hey man dont know if you will read this but this week has been my worst week of my career. I only buy NQ, and I know my strategy works but for some reason literally every single day I was up more than 1k and I end up giving it all back and actually losing on the day. This but every single day this week and this never happens to me in a bull market..It hurts so bad man.. Im watching your vid in hopes that I understand why I traded like I did this week. 파이팅!
how did this last week go for you?
Perfect timing. Thanks Iman.
Thanks for watching :)
Actually hipothesis we live in simulation is not conspiracy theory. Great video. I always thought trading is 90% knowledge in economics. But actually its like 90% psychology.
Is there a specific reason you chose futures?
You need to do more of these analyze commentary
haha silly algorithm sending me to your channel when you describe exactly what is happening to me. now even google is trying to get me to close my short knowing as soon as i do the price will drop like a bag of dirt. i know im right and they cant fool me
I have one tip or more like a wish for you. Videos are good and funny, but I often see situations where your video has a slide or meme full of text, but you are explaining complex things at the same time. Viewer has a difficult situation batling between reading the long text slide or listening your explanation. Either read the text or move it later and leave some room (time) for viewer to read it while you are silent etc.
Aye I appreciate the respectful feedback. I’ll try to fix that in future videos ❤️
O ya nice one. Emotions can sure play with set goals. And reset and justify the new goals. Makes scenes to me. And I believe
you must become a good looser and accept the fact that there are no 100% winners even if you and your
ego would like to think so.
Absolutely :)
Not being mea to Clay but that was funny. Like if you're recording yourself working and catch a fart, it will happen to everyone and It has happened to me and I"m sure I've done it and not even realized it and still don't realize it.
Props to him for filming himself.
Thank you for another great video.
Hey Great Video, can u make a video on How to make a trade ( i mean strategy, a separate video) Step by step.
Thanks🙏🙏
Thank you :). I'm not good enough to make a video on trading! But, at some point I'm gonna make a video on the notes I've taken through my sim trading and through learning through videos.
What does scaling in mean?
Adding more positions
Can you link the video of the guy losing the trade?
Very Helpful
such a great example of an awful trade that ended up winning
The fun jokes u put in Between made the video cooler, keep them on 😆
Thank you :)
hello how are you i hope you are well I am a new subscriber
Here can someone explain briefly why we make losses pls😊
"Right, left, right" Clever
The example of that guy averaging down like that made my head hurt.
I have notebook?
You earned a sub, I just love your videos!
Thank you very much :)
Great video . Again !!! Thank you !
Thank you!
were u using win7 in 2021?
Did this trade play out tho?
thanks for the vid
Amazing content
Thank you very much :)
Goddamn that was painful to watch. 😭 I did this with NAS this week.
I Hear You On That
Watching this explains my rise(s) and fall(s) to a T. Dammit Man.
We all know better.
We know what we should do, but it’s hard to do it :). I’m loving chart trading and not even giving myself the option to size up or move my stop loss. Doesn’t give me the opportunity to do something dumb! Or, at least, it makes it a lot harder to do something dumb lol
not me experiencing this today 🤣🤣🤣 them memes funny tho
Would am example of cognitive dissonance be switching bias? I will see red candles enter on those and have a short bias then immediately switch to a long bias if the short doesn't work and then switch back to a short bias and back and forth endlessly. If this sounds familiar I would love more insight even just a link it is absolutely devastating to my trading causing over trades/revenge and panic switching
I haven’t heard of switching bias, but cognitive dissonance is more about when two things can’t coexist (two conflicting beliefs, a belief doesn’t match a behavior, or something happening doesn’t match a belief about ourself). I know what you’re talking about with trading like that though. I’ve tried doing that for fun on a sim account to see if I could do it, and I could not lol. What I would recommend is a hard rule. Something like forcing yourself to wait 5 minutes before allowing another trade would help. It’s simple things like that which can cause big changes. The only thing you have to do is respect those rules beyond anything else. Day Trader Next Door is an amazing trader and he forces a 5 minute break between trades. I think he only allows 3 trades per day as well. Hope that helps :)
@@ImanTrading maybe a better example would be you enter a short. Get stopped out and because you get stopped out you enter a long position right after and it just goes back and forth endlessly and I do like the 5 minute rule something like that could help.
@@DCTrades oh yeah, I’ve done that before. Forcing a break fixes it because we can use that time to collect our thoughts and reassess the situation. Switching like that is partly do to FOMO (fear of missing out), since we jump in because we were wrong and want to get in before the move is over. A 5 minute break will do wonders for a problem like that!
This video is Gold 🏆
Please make very simple video with simple english on trading
how can you chart trade in options
Interactive brokers had a chart trading system but it was really awful. Not sure about any of the major brokers for specifically trading options.
Kevin is an ICT follower.... 😮
you are hilarious, and teaching some great content!
Thank you very much!
good job !
excellent content.Thank you
Thanks for watching!
John Green? What are you doing here
(ur awesome Iman these videos are great)
At 945 you say trendline. That is not a trendline. It’s consolidating with smaller volume each time.
At 11:11 , which is where you can see the volume for the candles approaching the resistance line breaking candle where he got in, you can see the volume not just increased, but exponentially increased. The volume bar is over 3 to 4x larger than the bar four minutes before it, 2 to 3x larger than 3 minutes before it, and about 1.5x larger than the bar 2 minutes before it (2 minutes from the close of the bar that broke the resistance line). Volume is not getting smaller, it's getting larger. But, this video has nothing to do whether or not he should've taken the trade. The purpose of making this was to demonstrate *just* cognitive dissonance and rationalization. Sunk cost fallacy and the dozens of other topics that are going on are not talked about here, because I didn't want it to be a 10 hour video.
the ending though😂
These videos are awesome!
Thank you!
So what am I supposed to do with the pencil? I'm not John Wick.
Hah you ever seen the clip where the Joker does the pencil trick and makes it disappear? Gnarly. Love the John Wick movies. You seen the movie "Nobody" yet? It's by the same guys who made John Wick. I loved it, but I also have low standards.
@@ImanTrading I forgot about that Joker scene, lost it in the theater when it happened. "Tada!"
That hurt, waiting for strength... Lol