The reason 95% traders lose: Humans 'have six-hour window' to erase memories of fear

Discussion in 'Psychology' started by tmarket, Dec 9, 2009.

  1. Researchers have found that humans have a six-hour window of opportunity when fearful memories can potentially be erased, a study says.

    Reliving a harrowing memory opens what experts call a "reconsolidation window" - a time-limited period when it can be changed from bad to good.

    This is probably why 95% of traders lose - because mistakes or traps in trading are easy to come by, but erasing those bad memories is not easy after the six-hour window. This also suggests that you would need to go over the same trade within six-hours and somehow neutralize the bad memories (tequila or vicodin?).

  2. No, this is just another convenient excuse for those who don’t make it trading to blame something else for it instead of the real reason: themselves. The lengths those will go to “save face” in their own mind. If you don’t take responsibility for your actions, sooner or later it is inevitable that an outside force caused your troubles in trading or life and it “wasn’t your fault.”

    Trading brings great potential rewards but in exchange for those rewards, the market can’t protect you from yourself (nor should it IMHO). There is the rub. If you cross a busy street everyday without looking both ways, it is inevitable you will sooner or later get creamed. It may not happen today, tomorrow or next month, but it will happen. Trading without taking responsibility is like crossing the street without looking. You will pay the price sooner or later.

    Good trading

  3. Tide31


    Thanks TMarket, this is no joke to me. A senior trader I worked with years ago told me that you had to come in each day with no recollection of a bad previous day. To be able to compartmentalize (put things away in compartments in your brain) and move forward with no fear of recent transgressions, to use Tigers fad word. I forgot this on Friday. That nasty selloff I got caught long in at 10am Friday and I never recovered. Market drifted higher rest of the day to close where it opened and I was living in fear of a repercussion. P&L is kind of like those electrode stingers!
  4. heypa


    Emotions have no place in trading activity.
    Psychology is mostly psychobabble.
    Make your plan.
    Trade your plan.
    Correct it as necessary.
  5. Tide31


    I never go into the day with a gameplan. Like a fisherman I take what the day offers and I never know what that will entail until after the bell rings. Playing off traders emotions and getting into the heads of market participants is exactly how I trade. What is the least likely thing that 'should' happen? What is the obvious trade that everyone is set up for and expecting? - then I go opposite.
  6. This is why the algos tear you a new one daily.

    They are not you man.

    Get it .

    You man.
  7. haha kinda neat
  8. All the mumbo jumbo psychology, voodoo squiggly lines and philosophizing aside:Most traders fail simply because the system requires it.
    #10     Dec 17, 2009