3 thoughts about behavior

Discussion in 'Psychology' started by TradeWrecker, Sep 3, 2010.

  1. olias

    olias

    good stuff here
     
    #11     Sep 24, 2010
  2. FMR... sorry for the lazy late reply. I'd suggest two books to get started, one small, one big, both exceptionally notated with additional research.

    The Little Book of Behavioral Investing - J.Montier
    Advances in Behavioral Finance - R.Thaler

    These will help you lay a foundation and provide some basis for my own "belief biases".

    The trick with this kind of research is application: How do we actively apply it to our own decision making processes? I think the answer is a humbling one. We can't... At least not until we've engaged is significant study of how we make decisions with regards to our trades and then intentionally break them down and try to really analyze what we did wrong.

    The real problem with that process (at least this is what I believe) is, it takes years and years to actually grow the skill sets that enable us to look at a market, access the over-load of data and make a calculated decision that actually has merit. I've often paralleled trading to becoming a surgeon. The amount of study required and the commitment to do it, to suffer through it, aren't common in most people. This is a very hard task, no matter how easy the retail bucket shops try to make it appear.

    People should have a ten-year plan for trading and how they will survive that decade financially. If you make it before then, good for you, but no one should ever plan or assume they will do it quicker. Deep, deep, knowledge of your craft and the surrounding, hyper dynamic environment is required to survive, much less excel.

    And the finger waggers will be on this post in 3,2,....1
     
    #12     Sep 24, 2010
  3. Research trumps replying to posts with no substance... this is Elite Trader not DailyFX.

    You're assessment of the original point equaling "bull-shit" seems to contrast one's need to "control your emotions". If this post lit your fire you must be pretty new to the job.

    "Trading is engineered from within". LOL... i'd love to read the research that is based on. Can I just "ohm" my way to success.

    Do you sit in the house at night and dream of writing a book to teach others how to make ten percent a month... I bet you do. Good luck with that. If history has taught us anything it's that there really is a sucker born every minute... I'm sure your bag of tootsie roll pops are waiting for your triumphant entry into FxStreet.com where you to can be admired by thousands.

    As I'm not a professional trader (i.e. money manger) anymore I don't really feel the need to avoid conflict, so if you want to engage in a debate by all means have at it. I'll eat your breakfast and show you the door to knowledge the hard way...

    I can hardly wait for your next installment of deep experience...
     
    #13     Sep 24, 2010
  4. IMHO... there is a tremendous amount of good information in this post.
     
    #14     Sep 24, 2010
  5. Psychology is way overrated in trading literature. When you understand this:

    %win x avg win > %loser x avg loss = profit

    the right state of mind naturally follows.

    I'm not saying that experience doesn't matter, but writing 500 page on trading psychology? no way
     
    #15     Sep 24, 2010
  6. Jack Hershy - Interesting take on BF; Reading your emotions; Journaling, and the iterative improvement process.

    bearmountain - I don't think the TradeWrecker was offended, but I don't think he was prepared to defend BF in this thread.

    wrbtrader - Nice summation.

    TradeWreaker - Thanks for the book references. How long in your own evolution did it take for you put your emotions in their rightful place?

    I've had a funded account since 1994, but have only traded off and on when I've had time to work at trading. I'm coming back to trading after over 5 years of not looking at markets. In my work life example (engineering ops), I beat back my fears / stresses by building deep level component / system / process knowledge. It took me about a year to fully integrate the theoretical training (engineering degree) with the real world actions.

    Duplicating the required assessment / reaction skills in markets is the make or break challenge we all face. I'm a profitable trader (but not sure I would label myself consistently profitable). I'm making a choice to re-engage because I have more time to devote. I do love the intellectual challenge of trading :)

    Anyone else what to volunteer how long they've been trading?

    Great Comments All; Have a great weekend :D
     
    #16     Sep 24, 2010
  7. My BS comment seemed to have pushed quite a few of your buttons. Other than a few silly personal attacks and something about fx, I didn't hear anything of substance.

    btw. its "om" my way to success. and not "Ohm". Ohm was a German physicist. Ohm's Law defines the relationships between power, voltage etc I don't think you would want to short circuit your brain.(joke)


    Yes, I would like to debate you sir, it will, I believe further my understanding. Where would you like to start?

    PS. my background is in computer science and not psychology. I study psychology to become a better trader. Thanks.
     
    #17     Sep 24, 2010


  8. I was "lucky" enough to have been a research assistant at Dean Witter in 87 & 89, while in college... I saw the immediate direct effects of over trading by my senior manager who "managed" to wipe out a handful of accounts through both of those rocky years. I was just entering the fray of professional trading in 2000 when the markets collapsed again. At the time I was over-leveraged in my personal accounts and paid the price. Once bitten, twice shy...

    I sucked it up and dug back in for three more years to reestablish my track-record. What I experienced in those years emotionally was completely different than what I felt at DW or when trading my funds earlier. When your exposure is in check, it's only the worst decisions that get you looking for the Maalox.
     
    #18     Sep 24, 2010
  9. Redneck

    Redneck


    BM,

    What say we dispense with the niceties – AND cut through the bullshit...

    You are dead nuts correct

    RN
     
    #19     Sep 24, 2010
  10. NoDoji

    NoDoji

    If this were true, the vast majority of traders would be profitable because there are so many excellent trading books, CDs and seminars that teach you how to trade with positive expectancy, statistical edges and positive reward:risk ratios. Statistically, all you have to do is follow a set of rules and you can't help but be net profitable over time. The rules to follow aren't difficult understand, trade execution and management have never been easier, and you don't even need huge sums of money to get started (my son's friend started with $300).

    I'm consistently profitable using really basic methods found in trading books I either checked out at the library or bought on Amazon.com, or saw demonstrated in free on-line webinars. I saw some of these webinars and read some of these books very early in my trading career and continued to trade inconsistently, make mistakes again and again, and realizing nasty losses for a significant period of time.

    Knowledge and understanding in no way guarantees that the right state of mind (and consequently the right actions) will follow, because the hard statistics tell us that over 90% of traders are not profitable despite free educational materials and almost no barriers to entry.
     
    #20     Sep 25, 2010