“Inside the Investor’s Brain”--little by little, I’m rewiring mine

There’s an old French adage—“little by little, the bird builds his nest.” I didn’t want to believe my mentors when they told me that it would take years to learn to trade. 3 years later, I believe it. Armed with a good plan, high probability methodology and indicators, I still often find myself succumbing to emotion and impulsivity. I’ve tried becoming emotionless and robotic—doesn’t work. Now I’m working on recognizing, managing and redirecting my emotions, instead of suppressing them--and it looks like there may be hope.

In his book “Inside the Investor’s Brain,” psychiatrist Richard Peterson says that the brain is capable of neuroplasticity, or “neuronal resculpting.” Apparently, the brain’s neurons actually change and grow new connections becoming physically larger in the area controlling the new activity. Peterson says “Such extensive neural networking occurs over time, due to practice and concentrated use.” So now, day by day, I try to stay in tune with what I am feeling, and whether I am following my methodology or not. If I’m not trading according to plan, I try to stop trading and analyze what I am doing and why.

Maybe someday I’ll go beyond just emotional awareness and actually use it as an indicator in itself. Peterson: “Traders such as ‘Stock Market Wizard’ Mark D. Cook have learned to use emotional awareness and self-discipline to their advantage. Cook is considered one of the most successful short-term traders in history. Cook remarks, ‘Whenever I am most fearful of the market that emotion helps me decide to go long and buy…Whenever my fears become overwhelming, my discipline tells me to buy and discipline must win out or you are doomed to failure.’”

 

Discipline is very very important.
Everything else you say also makes sense.

 

What if: The reason for continued impulsivity/emotions are because the plan does not reduce your emotions or impulsivity.

"I’ve tried becoming emotionless and robotic—doesn't’t work."

Then the plan should do it for you or reduce what you feel.

Confidence can reduce emotions. Knowledge can reduce emotions. Trust in your indicators can reduce emotions. May not be a case of suppressing but recognizing and satisfying them. What if sometimes your emotions are correct how can you reconcile that with your plan.

What if you had an emotional reaction repeatedly to a particle of truth that in hindsight should become part of your plan? Then the emotions are not a bad thing, they could become discovery. Just kicking around some ideas to work with the enemy, so to speak.

 

This is one reason I'm trying my hand at trading. Research shows that learnng new skills helps an adult brain prevent memory loss diseases.

 

kwtrade, PMed you

 

I hope it doesn't take another 3 years for you to realize not all emotions are bad.