Ok-- name an investment fund thst became succesful due to psychologists-- any fund that i know were already uber succesful prior to using psych. ( think about it).
Another aspect we've not yet broached The psychological techniques used - by the players To lure in.., trap in.., scare out.., trap out Suppose those don't exist either - LOL Trade well today everyone - win.., lose.., or draw I sure will RN
The fact that top financial firms hire psychologists (I've identified one wall street firm and one well known international firm) is not debatable. The issue is how does this translate for the retail trader (typical ET member) when the pros have access to such a resource to help with their trading or business objectives. The funny thing is this. I see a lot of retail traders here at ET say they want a fair playing ground with the big boys or they complain too much when they traverse from backtesting to real money trading... Its all there in front of our face especially when the markets is wired for most traders to lose along with the fact that the human brain decision-making process (cognitive abilities involving financial decisions) has been proven to perform poorly in stressful and time sensitive tasks. At BNP Paribas in France, they have industrial psychologists and clinical psychologists...they even help many of their business clients that plan on outsourcing via providing their clients with the proper tools to complete such and one of those tools that they consider to be a key tool in transitioning into outsourcing is psychology. Anyways, I didn't know about the above until I had a recent conversation with my cousin (an institutional fixed income trader for BNP) when he was talking about a personality test he had to take after he was identified for a promotion. So I asked him the question - You guys have quants (algorithms) and institutional desk traders...if the desk traders have performance problems...are you guys sent to some type of training program or what ? He said his pal a few desks over had some recent performance problems and was escorted outside and then taken down to the river and the shot in the back of the head. I didn't say anything, my mom and his mom gave him the infamous stare down because he made that comment at a Xmas dinner... He then said he's just kidding and any one that has been identified with performance issues are schedule for several meetings with their psychologists to help determine if the problem is psychological and then to find resolution. Now getting back to his work buddy...his performance problems were identified and linked to the recent birth of his 2nd child and the lack of sleep along with stress related to his wife still having serious health problems related to the birth. My point is this, how many of us retail problems have problems in our personal lives that's sabotaging our trading performance and we really do not know it ? We don't have someone looking over our shoulders in our home office and we don't have someone looking at our trading account to say something is wrong and lets go have a conversation. In fact, most retail traders can't afford such nor can they persuade an employer to pay for a psychologist for their none job activities in reference to traders that are part-time traders and have a full time job. Yet, the few retail traders that actually are paying for private medical/dental insurance...most insurance will not cover the expenses dealing with psychologists unless its clinical (I did some research on that issue). Seriously, I've met 3 traders at this forum in the past 6 months or so that have ADHD. In addition, I've met 10 other traders here at this forum that have admitted they have a learning disability (e.g. dyslexa, dyscalculia and other types) after they saw a conversation I had with someone here at ET in another thread involving that member having ADHD. Almost all of them have work related issues at their jobs because of the learning disability they have. Simply, it would be foolish for us to think they will not have any issues while trading (their second job or hobby). Yet, this conversation I've been having about the psychology of trading isn't about ADHD. It was prompt a few years back after a particular ET member went through a very nasty divorce involving his kids and he admitted it had a big negative impact on his trading results. I remember telling him about the trading performance of a friend that went through a nasty divorce too. I told him about my friend that had been extremely profitable for 5 consecutive years in Soy/Wheat futures. He then goes through this bitter divorce, shared custody problems for about a year...that one year he had his worst ever drawdown along with developing a depression disorder. Results was that almost every month was a losing month. Then his life begins to stabilize and he's in a new healthy relationship...he's back to being a profitable trader. What helped him turn it around...a psychologist that identified the depression and sent him to someone else for proper help. He no longer tells me that psychology is voodoo. Then there's the trade journal section here at ET where countless of traders "admits" they have discipline problems, lost their focus during the trading day, not able to manage at home distractions, not able to manage work distractions, forgot to do some key task involved in their pre-trading preparation... Ironically, all of them do not believe in the psychology of trading or underestimated its impact in their trading until after the dust had settled. Simply, how many more traders at this forum and elsewhere that are sabotaging their trading because of a psychological variable that doesn't manifest itself in backtesting or simulation trading ? Instead, that psychological variable shows its face when traders are under stress, under pressure when they traverse into real money trading...your hard earned money. Once again, the question - Is psychology in the markets really voodoo and if psychology is important in the markets...is it an edge as in those that have it will outperform those that don't have it ? I don't think such can be measured on the institutional trading level but I strongly believe it can be measured on the retail trading level. P.S. There are now algorithms scouring social media of the financial markets to read fear/greed to help locate trade opportunities. This stuff is getting more sci-fi every day...a little scary too.
Edge = Exploitation / take advantage for one's own benefit. There are many edges that exist, depends on how and where you look. Some are more efficient than others, sharper than others.....
The only genuine edges I know of are both illegal.... 1. Front-running 2. Trading on insider info Lots of people perceive other as "edge", but likely is not. JMV, FWIW....
I know for sure (3) works. Don't understand the other two and how they can create "edge" for retail trader.
1. Jameson Irish Whiskey 2. Moscato Wine 3. Starbucks Coffee What does this spell? Hell of a good time. Going to start early gals and gents, am sure it help my toothache or start one, ROFLMAO Oh wait, that wasn't the name of this Post, opps, hmmmmmmmm 1. Perseverance. 2. Being honest with yourself. 3. Back testing till you need stronger glasses. Yahooo, my turn on wearing the lampshade ....