 Hey folks Tim here from Amplified Trading. We're going to have our second installment on trading psychology So we've had a fantastic week with the US presidential elections all the way from Tuesday evening Right the way into the end of the week lots of volatility and so what better time to be able to reframe our job as a trader and how we think about our job and What we could be doing better? So I'd like to take this video opportunity to go through one key way of how we can frame our thought process and Then we're going to go through four different very practical things that we can do with our trading, with our charts and so on and that can really help us get position to be able to think clearly and to get into a position where we can just in a very fluid manner do what we know We should be doing as traders So to kick this off. We are going to have a look at the whiteboard so You know, this is something that I've used with quite a number of traders and It's called Uda loop thinking OODLA Uda loop thinking This was a thought process sort of a thought decision matrix process developed by John Boyd. He was a trainer at the Top Gun Flight School for the US Air Force and This was a sort of a method that he developed in order to help pilots to frame their thoughts and base it in facts and then Feed in information and then come to decisions and take actions in very rapid succession and creating new thought loops new Decision trees in rapid rapid time and this would enable the pilots to essentially not get anchored down by old information when they're making a decision on the now and So let's get into this essentially what we're looking at here is Oh, let me just get this hand going Uda loop OODA So we're going to go through this the first stage is observe We observe a Situation the second stage is orientation Orientation the third stage is decision and the fourth stage is action So when it comes to trading This is something That's really helpful. We can come in in the morning and we open our charts and we we can clearly observe You know, okay Friday morning oil is down Okay. Well, we can see oil is down Dollars down euros up Equities are kind of ranging at the moment and so you're just really making Observation you're not taxing yourself with having to do anything at this time. You're just soaking it in and Then you're free to kind of move forward from there, right under this sort of loop Okay, so we're gonna we're gonna get this here And it's all about feeding forward essentially feeding forward. So we're in observation stage in stage one We're in Orientation stage in stage two Decision and stage three action at stage four. So as I said when we come in in the morning We just observe the markets look at the charts to see what's happening Okay, fine, we've observed oils down. All right, so then we feel comfortable to transition You know, I'll just put in here. Just look And then, you know, we feel comfortable in transitioning to The next phase which is orientation. So when we're orientating ourselves, you know, like a soldier dropped into You know a war zone a battlefield or You know someone put into a Any situation really you have your clear observations and then you have to orientate yourself to the details. Okay, so We can come in look at oil. We start, you know at the daily bar chart We can see this trending for the past couple of weeks on the upside Then that could come into play today And so you're starting to map out the market, right? You're starting to map here. So Mapping, right? You're mapping out, you know, finding levels Find levels You're finding support resistance You're observing where there might have been excess excess on the highs or excess on the lows You know, what time did the volume come in overnight and drive down where there's some data overnight? I was certainly looking for any overnight data that would have been talking down. Well When I first came into my chart at about half seven in the morning, I couldn't actually find anything. So but in phase two We're orientation stage. We're mapping out things. We're finding the levels. Okay So once we've done that, we're free then to feed forward again. We're moving forward now Don't be sitting there thinking well, Tim, I'm not gonna be I'm not gonna be writing down. Okay. I am now moving from the You know Observe stage the orientation stage to decision stage. That's not really what I'm asking you do This is really Something that happens quite naturally for most people, but we're gonna get into this and we're gonna see how we we have the very root of Some of the worst things that pitfalls that traders can can get sucked into Okay, so in stage two, we've come from just looking to the mapping out finding the levels drawing support drawing trends strong resistance Maybe looking at Delta or volume or something whatever you'd like to do And then we can kind of come to a decision. Okay, this is for me this uptrend from I think I can't remember the exact dates back, but it was intersecting on the lows of Friday, it was it was well below market when I'd first come in and it was coming in around 37 spot 38 on oil. Okay, so then For me, I was just and I've been tracking that level for days. We've been tracking it in the room I'm happy to say a lot of people got on this trade and I Simply wrote down. Okay decision 37 Where are we here? Let's get a different pen for this You can write down 37 spot say 40. All right, let's say 40 I want to be long there and WTI Okay, you can set up an alert or whatever you need to do But the important thing is is that we've come from stage one to stage two And now we're ready to make that decision to make a trade, right? We're not taking action. We're just making a decision From our calculations and from our smart work To take a trade long at 37 40 Okay, so What happens is market market came down actually market came down to that a few of us were looking at this and studying these levels in the room that morning and Lo and behold once we've done the decision work We're ready to feed forward. So what does it what does that entail? Well, of course that entails in You know taking the trade, you know So the action is when we come in 3740 if you haven't got a limit or order there You're hitting in at market or you might just place a limit order at the last minute or maybe you want to shake out a bit But then you take the action Okay, you take the action You take action you click the button or you know you click Click You enter the trade Right, you're in okay, so you've essentially The most important thing is here you do your job As a trader, okay. Now this might all seem really simple, but this is It's it's so simple that people deviate from this thinking that this is just a natural human response to Sitting down taking trades being a legend making loads of money easy peasy All right. Well It ain't that easy. Okay trading psychology With junior traders all the way through to people who I've coached who have been trading for 10 15 years It comes down to psychology. It's always psychology So, you know the technical stuff you can learn that like you can learn all the technical stuff You need to within a six month period, you know, but when it comes down to putting on risk Our minds just just play such evil tricks on us that we have to bring it back to basics We have to re-engage with a camera mindset so Where the problems come in here, right? And this is this is the more interesting part of this. Okay The problems come in. It's when we are the problems come in when we skip A beach on this steps one two three four, right? So, let me let me just bring this over here a little bit, right? I'm just gonna bring this over to Area here That's some tax. Yeah, okay, here we go So let's look at like easy peasy loop, right? And this is gonna be kind of frustrating because you're gonna think oh, Tim What are you talking about? This is like it's simple stuff, but an example of a healthy loop is right You wake up in the morning. You think right. I'm about to leave the house. You look at the window. I Think right, it's sunny. It's dry Let me check the weather app. I wonder how long it's going to be sunny and dry for so says 200 degrees brilliant It's gonna be a dry day No jacket. No jumper. Just t-shirts. You grab your keys. You walk outside. You get in the bus And the outcome is it's freezing cold The app said 21 degrees 21 is warm like T-shirt weather right for someone for someone in our new UK anyway and You think okay, let's do this again, you know, you take in the information again. You start another order loop, right? Okay, you go over the wind factor is making it like cold I need a jumper, but like, you know take this that you're still on the bus now Right, or you might be just walking on the road. So you're starting that new loop and you're going, right? It's cold because of the wind. I need jumper, but I don't need jacket Okay, I decide I'm only gonna wear a jumper Okay, so O ODA one two three four, right? Observe the wind factor is what make it's what making it's what's making this 21 degree Day cold to you number two you orientate yourself as to I need a jumper, but not a jacket Okay, and then number three. I'm deciding yeah, okay I'm only gonna wear a jumper number four you leave the you've gone back to the house get your jumper You leave the house again, and you forget about it for the rest of the day, right? That's a normal healthy OODA loop that we we would all do easily an unhealthy loop is This you know an unhealthy loop is You're right to leave the house. You don't check if it's warm or cold You don't check your app or look out the window or anything. You just put on like a t-shirt jeans Out you go You're walking on the road for five minutes And then you show It's cold, but I don't really care and then you spend two weeks being sick, okay? So number one you're about to leave the house. You're observing well You're not really observing anything here in phase one. Is it warm? Is it cold? You're not really even thinking about it then number two you don't orientate yourself with information You're not taking anything in to give you a guide or a barometer at all of what to expect when you walk outside so then Decision All right, you decide to go outside and then you're starting to get it getting you information that is freezing cold An action you don't take an action and you get sick, you know It's all it's all so simple, right? But oh, it's all so simple, but you know, this is this is where we start to get into What causes traders serious drawdowns and really big emotional? reactions to their trades, okay so we try to get this camera to focus again here What happens? To traders is that you know, we have things like fear of missing out revenge trading chasing a market Averaging into losers, you know, these are all the real You know the real nasty ones right and it gets absolutely everybody So in in a healthy state we observe We go to two Orientation mapping out finding levels Reading some news Looking at what that is coming up. Let me go to making a decision You know like I'm looking at oil on a on a Wednesday It's half 11 in the morning I map out some areas support resistance trends look at value and Then I decide, okay, I'm only gonna trade When we get our DOE data at 330 GMT in In the UK and Ireland, okay, and then when it comes into the into the data We get a volatility spike down into my level I decide to take the trade And I've taken my action Okay, and it's as simple as that healthy loop right done. Okay, cool. Brilliant Well in an all unhealthy loop, right Here's what happens. Oh Sorry with that. Here's what happens, right? We go from Perhaps one our stage one fine Stage one fine stage two. We find our levels fine. Great brilliant. We've got some good levels, right? And then we just go. Oh, you know what actually oils is or my market has actually Spiked into that level and now it's like 20 ticks up. I Actually liked the lungs from around there. So, you know what? I'm just gonna I'm just gonna jump out there and Get into this market Without paying any observation maybe to You know what might have happened at the level for example People skip Having a reference maybe they're just mapping out the market They're still in the process of that and then they just jump ahead They cut their analysis short and just take a trip. They just jump in there jump in there Put risk on pull the pull that arm on the slot machine, you know Other traders will Come in they'll have a look at the market. They'll map out the market They'll decide they want you know, I shouldn't laugh, but I mean we all Maybe have done this. I mean, I'm personally speaking on more of a fast thinker quite aggressive Trader Aggressive with action and attacking sort of with decision sets and whatnot and actions You know, but traders find the level To think about this is an amazing level of this trades or the one on the upside trades I know what I'm gonna do and it comes down to that The market comes to the level and they don't take the trade They don't take the trade. I have one session with a trader that I work with I've been working with for a couple of months and They've done really good analysis that morning They'd stepped away for like two four five minutes The market had come down to their level and then the trade had started working out and what happened was the market was Their trade that they hadn't yet taken Because they were out was now on side like 15 ticks or something And so they decided to chase the market down to enter at market Even though it was now say 15 ticks away from their perfect entry And what they didn't do was manage where the risk should be on that trade Originally where it should have been on the trade and so that trader Jumped in got stopped out Chased the market again jumped in stopped out. And so we actually had a chat and I happened to be trading at the same time and we got on a chat and I said listen Man, this market is actually gonna swing back up to your entry level and when it does Only when it does that I want you to take the trade again But don't be chasing this market around as it as it blows lots of different levels out of the water You had good levels, but you decided that You know You've done your morning prep fine. That's one OODA loop here Then we have another one to do when you come in and you've missed the trade You've missed your entry. Well, then you got to start and you OODA loop, okay? And you should orient or observe and orientate yourself that if you were to get in now would say 10 ticks of risk Chasing this trade the market can very well pull back and blow you out And you're gonna be right, but you're gonna lose money So luckily enough We had a great session on that trade the trade did come back the first attempt He actually did get blown out in the first attempt, but on the second attempt He was determined to stay with that trade and he pulled back all of his losses for that whole morning session on simply being persistent with his Mindset about how he was thinking he was now ready to feed new information in in rapid time So, you know the most common thing though that I see with traders that you know It's it's it's overactiveness and these traders when when I asked them well, what do you think is wrong with your trading? They'll say oh, man, I'm just I'm just overactive. I'm just too active. I don't know I don't know what is going on. I'm just can't stop being such an active trader, right? Well, what happens is they come in They know I'll get a new loop going here for this, right? Okay, they come in and they observe orientate They have a decision to act at a certain level and take action at that level and sure enough They they take action, right? What happens is, you know, they take the action And they get stopped out and they go I shouldn't even use a green pound for this they take the action they take a trade and Maybe they got stopped out, right? Well, they just go back to making a decision of saying, you know, I'm gonna get in again I think I just I think I just got blown out on the level there I think it's now it's gonna be supportive, right? So they make a decision. You know, I think I'm just gonna buy in again Okay Well This is dangerous now. They've taken another action. They're probably buying a market that was probably falling against them They take that action and they say, you know what? I'm just gonna buy some more. I'm gonna move my stock out Instead of instead of getting that action and the feedback and then going back to Just watching this market Or maybe the levels are good and they just go back to orientation and say are these levels good? Maybe I need to go back out to the daily bar and see is this level now getting crushed Instead of doing that these traders Decide to chase this market down They decide to chase the market down and continue to take actions So they're buying buying buying then it comes against them so much that it just hurts too much and they've got a puke it okay, and Then what they do is oh, you know what? You know what actually I know what I'm gonna do. I'm gonna get short this market I'm gonna short this market right. I'm short this market now because it's going down and kept going down I'm gonna get short. Well, I think we all know this story. We've heard this one before Let's create a new color for this bad decision of flipping Against the market that's coming against you Well, they take the decision to short the market now because the lungs have been crushing them Or they've been gonna crush some of the lungs So they decide to short the market and they get stopped out because the market is now Cooked on the downside and it's ready to firm up in this area and lo and behold what happens is The traders blown probably their daily risk limits may be more and now the trade starts working out in their favor I mean, it's it's it's really really really common. Okay. Now. How can we fix this? All right, how can we get better right? You know, that's all in this stuff. How can we avoid this, right? So what we do is we simply you know a very common solution to this is when we get our feedback here at this point You know where we're getting stopped out where we're flipping, you know, all these things, right? When we get our results We should simply just feed back into observing the market or Reorientating ourself on the market, but instead we get stuck in this loop and da loop. I call it a da loop It's just really really really dangerous stuff the old da loop We just get stuck there. We don't want to be calm and observe because we're really amped up We just want to be in the market, you know, something I talked about in the first sessions where was You know, we need to rethink what working means and what working is All right You know, this is not a job where the longer you spend with Contracts in the market the more money you make Now unless you unless you're consistent unless you have a good handle on your psychology That that is that is the baseline sure if you're a swing trader, obviously, you know You need, you know, if you need to trade thesis to work out over a number of days weeks months fine Okay, that's different situation. But us as interday traders scalpers for example position traders for example It's not that's not the case Looking back at the first video, you'll see that I'm talking about we have to think differently about work It doesn't just because we're sitting at the computer does not mean we're we're get we're making money every minute that goes by This is this is not, you know an office job This is not for clocking in clocking out if you want to job the clock in and clock out of You should you should not watch this video anymore and forget about trading because that is simply not what this job is So You know Working is waiting to meet, you know with trading and and working is not Just sitting in front of the casino all the time. So really that's all I wanted to cover on this was to make people Just to make people aware of OODA loop what we do naturally is traders What we should aim to do naturally is traders, you know, if you're stuck in a DA loop, right? The best thing for you is to Say hold on a second. This is madness and click a flatten all button On your on your system and just get flat and then get up from your desk And go for a walk five minutes minimum five minutes And then when you come back to your charts, you'll have a whole different Physiology, you know, you'll feel different. You'll you'll you'll have released some tension You'll be able to look at your charts and what was going on in that market with a whole new set of eyes And you'll be able to become sober in a sense From this DA loop that we can get stuck in. Okay? All right, moving on here really What we can do essentially as Traders in a practical sense, you know, what can we do? apart from all this psychology stuff Tim well Number one for me is really having clean charts Having clean charts Clean charts Clean mind Absolutely, you know Every chart that you use on your screens should have a very specific job Okay, you shouldn't have charts on there that you know, well, I have one chart for the stochastic So I have one chart for the holy grail indicator. I have another chart for the Double fast holy grail indicator of another one for my keys. No, no, no you need to really cut down on all these indicators and Simply just have price action bar charts, for example, if you're not trading value, which is something that my team do and that I You know, I work a lot with You know, we also use a lot of time bars really actually You know You really just need to throw out all these other indicators and things you'll see in the room Every day in the discord that I'm looking at and trading just clean 30-minute bar charts In conjunction with a daily bar chart in pretty much nine different markets It's the same for Sam. It's the same for Will Pierce It's the same, you know, you don't need all of these indicators So you shouldn't have as well, which is quite common as tons of news resources, you know on multiple screens like, you know, Bloomberg Reuters and Al Jazeera, you know CNBC, you've got these four videos going and sky maybe and you know, your brain is just getting completely Cooked with all this information overload when really you just need the simplicity of your charts maybe a squawk and An analyst like like the way we have Anthony in in the room, you know This is all we need as traders. We don't need 10,000 Veins of information coming into our into our brains at all times It's just too confusing and it's too much and it's also very easy to get turned around doing so So simplification really Get rid of the non-core data and also, you know to time your phone out of sight and on silence essentially for all of the trading day You know next thing really for me, which is the common pillar For everybody about their trading is stats, you know, I like to call this the mats of me team up, right? What are my stats? I need I need to get better as a trader. Okay. How how Where do I start to get better? Well, I need to know about myself as a trader So what are my stats? What's my win rate? So you can pull up your charts your charting package You can pull up pro real time You know trader view VUE comms a great trading statistics package you can't Upload Spread betting data there, but you can upload futures DMA direct market access trades to it And you can upload equities trades options trades all this sort of stuff. It's a fantastic program This edge wonk as well You know, there's a lot of brilliant ways out there to just track your stats. So what's my win rate? Okay, what's the win rate? Okay, well 35% let's take that you have a 35% win rate. Okay, fine Well, what does that mean? Well, that means that You need to be winning one in three trades on average and What we actually really need to find out here is what Is your risk? Okay So if you have say let's say you've a you know around a 33% win rate, right? Well, the win rate is is not that important when it comes to I'm really, you know Getting to know yourself as a trader what what is important is, you know, we have risk versus reward, you know one two Say three one is the three my risk Risk is one unit. I'm reward Is three units, okay, so out of three trades you lose You lose Your win. Well, I only lost one dollar here One dollar here, but I made three dollars here. So what's my net total here? It's one Okay, so we're winning Okay, we're winning, right So you got to think about this in the maths And that if your win rate is like 33 percent 35 percent That doesn't mean you're a terrible trader at all It doesn't mean you're a terrible trader. I've seen fantastic traders and these guys are are openly out there that have 25% win rates You know, but the the the important thing is is that these guys have they Look to make On their trades, they're looking at risk reward rates Of something like, you know, one is the five Okay, one is the five something like quite big like paul tuter jones He targets one is the five or one to eight, you know, like One unit of risk to five units of reward Or one unit risk to eight units of reward, right? Because that means that they know that they're going to lose 70 percent of their trades But the ones that they win on they need to win big on to make up for all those seven losers, right? So, you know, your improvement will start with knowing your stats and knowing what that means now if anyone has any trouble Working out what their win rate Um is indicative of for what sort of risk reward returns that they should be looking for at the minimum Feel free to get in touch with me. You can email me at t.doggan at amplified trading.com. That's no problem at all And you know, you can reach me on youtube by putting a comment down below here You know, I'll be more than happy to to help you with that It's easy peasy So The other thing is your truth. Okay. You're the truth of your trade. All right. Let's trade your truth I see this happen a lot where traders have really good trade concepts. They want to Get in at a certain level and then the market comes into that level and Some other trader might say to them. Oh, you're you're gonna buy that level. Are you? I don't know. I think I want to short there and that and then the trader is completely bombed Psychologically And through their confidence their confidence is completely shot them in this trade because You know, they don't have the psychological conviction to their analysis And their oudaloupe that they've just done to get from o o to d And then they're not able to take a the action because They see that, you know, this trader over here Well, he maybe or may not be better than me or she may or not be But actually now I don't know what I think about this trade. Well, that's That, you know, you have to trade your truth the way you see the market We talk a lot about this in my group. We talk so much about this and that You know, you got to have psychological conviction in your levels, you know, that's why And where that's really where sorry, I spend most of my time when I'm working with people with working with traders Is building up the psychological conviction they have To their trade and their levels Okay, I want to I want to get those traders to a point where they have so much read on the market And their analysis as they're going through their o o d a or their o o d That when the trades come up at these levels, they're only looking for very minute details To sway them one way or the other to actually You know, get in that trade They're not compromised. They're not sitting there at a deficit of knowledge or confidence in their job And their ability to do their job They know that they can trade and they know that they want to get involved in this level They're not going to have someone at CMBC or on the squawk saying, oh, we're just seeing, you know, this happened actually on Thursday or the Thursday or Friday where the squawk came on and he said we're seeing a huge amount of sellers coming on on the book For the S&P 500 at X price 33 25 for example, I can't remember the exact price And so if you are sitting there and you're looking to be long on the market And you're saying and you're seeing that's there's a huge amount of selling coming in and it's in on this level You're going to be sitting there thinking Oh, shit. I don't know if I want to I don't know if I want to get involved in the lungs here now The squawk is saying there's a whole load of selling here. There's a whole load of selling all the time You've got to have conviction in order to do this job In your ability to do this job. Okay, so be good to yourself The fourth thing Is to have realistic expectations. Okay, so A lot of traders think in the early days they think wow, I can come in here. I can make like One two five six eight grand a day just smashing it on the Nasdaq. This is so easy I've seen, you know, X trader and Y trader just being able to kill it And they're driving Lamborghinis on Instagram and da da da da da You know, this this is not this is not What trading is like this is not What trading is like? um You know traders who are on maybe micros Trying their hand at trading learning developing their skills um I think it would really pay dividends, you know to say hey What is my figure per day that says to me that that tells me That i'm winning that i'm doing good What is that figure? Hands up who has that figure out there, you know The point is is that, you know, we deny ourselves The win Why not defining What our target amount is per day per week per month We don't do it Who has written down on their desk what the those figures are If I reach X amount of dollars today, I'm gonna stop if I I'm sure they have all all sorts of downside figures, but you know It baked into their head or written down on spreadsheets and da da da da Breakers in their in their software system, whatever But when did they make the same commitment to the upside? Well, the answer is they rarely do Traders do not set themselves up to say I've won today I'm stopping trading It's just no continuous continuous trading trading putting on risk putting on risk putting on risk Until the wheels start to come off the bus so much of them. They stop Well, how about you set some realistic expectations and develop consistency that way You know, if you're trading micros and you're trading maybe I don't know Uh, like a thousand dollars in a micros account like one trader was that I was talking to recently He said oh, it should be super easy for me to pull down like five or six hundred quid a day trading micros And I was like well Yeah, but you do realize that's the equivalent of like five or six thousand dollars a day If you were to be trading full-size clips And he's like, yeah I said, you know If you're starting out and you're not if you're not consistent That's just unrealistic And you're holding your your your target at such a high level that You're really kind of designing for yourself to to find it very hard to win. You're designing a very Very difficult game for yourself here. How about how about you design a game that's really easy Like, you know, I talked in the first video that making money is relatively easy But keeping hold of it and compounding it is what's relatively hard, right? A few of you have agreed with me on that and talked to me Since about that and agreed with that, right? So how about we start to fix this game in our favor and we say, you know what? This is my dollar amount today. I'm trading micros. I have a small account This is the amount of my I want to make I want to make a hundred dollars today And I want to make a hundred dollars every day this this this week or this month And then I can build that consistency I can compound that money day on day week on week Okay, and this is how we start to grow as a trader the amount of confidence that we can derive and grow from just simply having five six 10 15 consecutive green days in a row. Yeah, maybe you don't have to hit your target Maybe some days you will far super is far far overshoot your target Okay, but There'll be other days where you're finding it hard to hit your target and you just feel like, okay You know, I'm gonna I'm gonna walk today, but I didn't lose any money. I'm green on the screen I'll fight again tomorrow, you know, but design the game so you can win And and build on those wins So that's really all I have for you guys You know, I think it's it's going to be Maybe one or two more videos the next session. I want to do is going to be with creature who is a sports psychologist and she specializes in elite performance psychology for sports sports professionals So I've actually worked with creature uh On a number of occasions. She's worked with quite a few traders a lot of rugby players in arland and australia She is really fantastic at bringing a practicality towards tuning into higher performance thinking And how we can set ourselves in a position to think better and to to gain that performance So Thanks so much for tuning in Thanks for letting me take your time this evening. This is video two done. If you haven't seen video one Go back. Have a look If you're not subscribed to the channel Please do click the link below and subscribe to the amplify youtube We've got some really fantastic content coming out daily. We're also in the discord room daily Analyzing these markets checking what's happening in real time and seeing what's happening overnight and talking about what's happening Coming up through the week You know, we have fantastic stuff going on in discord Um, it's a great room. So I look forward to seeing you there And until the next time. Bye. Bye. Thanks for your time