Category: Trader Psychology
The analysis published under this category are as follows.
Wednesday, July 07, 2021
The Matrix of Market Psychology / Stock-Markets / Trader Psychology
By: Gary_Tanashian
In the midst of work uncovering a target for the US dollar that will surprise many if it comes about, of taking a hard look at the messages of long-term Treasury yields and the yield curve, defining potential macro outcomes (inflation, Goldilocks or deflation) based on these indications and planning strategy accordingly, NFTRH 662 got a little out there with a discussion of the mindset that is behind the name of the Notes From the Rabbit Hole service.
The mention of John Hussman (I could also have put the estimable Jeff Snider or the Robert Prechter of yore in this piece) is not meant to insult. It is meant to simply state that a fiduciary manager like him, honestly following his work, is not geared to make significant gains during high risk market phases.
I too do not make the gains I could make (temporary though they would be) if I were a blue pill gulping all-in happy idiot. I am bound to ongoing risk management, but also avoiding the red pill while profit making and profit taking (part of risk management) with an awareness of the importance (for me) of high cash levels in a persistently high risk market (as defined by structurally over-bullish sentiment among other things).
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Friday, September 06, 2019
When Most Investors Believe Something, It’s Usually Wrong / InvestorEducation / Trader Psychology
By: Jared_Dillian
You have probably heard that $15 trillion of bonds are trading with negative yields. That’s 25% of all sovereign bonds outstanding.
Lots of people are furious about this—but it’s no use getting mad at the market.
Lots of people say it doesn’t make sense.
It makes sense to me, and to a few other people.
If you see something in the market that doesn’t make sense, it’s usually best to stay away, rather than picking a fight with it.
We’re not in uncharted territory here.
Tuesday, September 11, 2018
What Personality Traits Do You Need to Be a Successful Trader? / InvestorEducation / Trader Psychology
By: Boris_Dzhingarov
When you first start trading, you’ll find there are tons of resources out there. While this can be a good thing, it can also become quite overwhelming. In order to be a successful trader, you need a mix of knowledge and the right personality traits to succeed. All the knowledge in the world won’t help you if you’re impatient and blow your money quickly. In this article, we’re going to look at the personality traits you need to become a successful trader.
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Thursday, October 12, 2017
Two Highly Recommended Books from Bob Prechter / InvestorEducation / Trader Psychology
By: EWI
Hello,
Bob Prechter's two new socionomics books showcase one of the most exciting disciplines in the social sciences today. Social mood undergirds the entire Elliott wave forecasting model, and I can't recommend these books more as an intro to how mood works throughout society. Here's a short note from Bob about the books and a special offer:
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Friday, March 10, 2017
This Time Is Different - 4 Words That Broke Many Investors / InvestorEducation / Trader Psychology
By: John_Mauldin
BY PATRICK WATSON : Four little words may have cost more investors more money than anything else in stock market history: This time is different.
Granted, in a sense, every time is different. History never repeats itself in exactly the same way, but it can certainly rhyme.
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Tuesday, December 01, 2015
Financial Markets are a Psychological Phenomenon - Video / InvestorEducation / Trader Psychology
By: EWI
Interview with Robert Prechter
Watch this 2-minute video where Robert Prechter talks about his developing theory on finance with Douglass Lodmell for The Mind Of Money series.
Since then, Bob has been hard at work on his new book about his now fully developed theory on finance (scheduled for completion in 2016).
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Friday, August 28, 2015
How I Learned to Stop Worrying and Love Market Fluctuations / InvestorEducation / Trader Psychology
By: John_Mauldin
Patrick Cox: Most of you know that my day job involves finding disruptive technologies for investors. Most of you also know that the stock market has recently taken a southward plunge.
When I was younger, I always wondered why big fluctuations in markets seemed to cause so many people so much anxiety and consternation. It’s not as if we don’t know that, historically, markets have always displayed big swings. Understanding this, it always seemed clear to me that a rational individual would not invest money in equities if that money might be needed in the short run.
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Monday, March 23, 2015
The Psychology Behind Your Stock Market Pessimism / Stock-Markets / Trader Psychology
By: Investment_U
Alexander Green writes: Over the course of the last few columns - and during my recent talks at the Investment U Conference - I’ve laid out my case for viewing the future of the economy and the stock market optimistically.
Yet Editorial Director Andrew Snyder polled our readership and found that only 38% of you agree with me.
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Thursday, March 05, 2015
The Psychology of a Sideways Stock Market Trend / InvestorEducation / Trader Psychology
By: Clif_Droke
A fascinating study is the psychology that accompanies a prolonged sideways market trend. It also holds insights into what the future likely holds for stock prices.
When equities get stuck in a sideways trend for several months, investor psychology goes through four basic stages of change: 1.) initially they feel expectant that stock prices will quickly breakout of the newly formed range; 2.) when this fails to materialize sentiment turns sour as stocks drop to the lower boundary of the range; 3.) as stocks continue bouncing from the top to the bottom of the range investors begin to lose interest and eventually quit participating altogether with many selling their stock holdings. This is what forms the basis of a bullish accumulation pattern since “smart money” professional investors eagerly snap up the disgorged supply from disgruntled retail investors. 4.) Finally, as the range is nearing its final resolution, small investors who may, or may not, be invested are thoroughly frustrated at the lack of directional movement.
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Thursday, August 21, 2014
Why Emotional Discipline is Key to Trading Success / InvestorEducation / Trader Psychology
By: EWI
If you are serious about trading, Elliott Wave International's (EWI) Jeffrey Kennedy has some advice for you: learn emotional discipline. In this article from his Trader's Classroom Collection, he shares some expensive lessons he learned during his 20+ years trading the markets.
Friday, March 14, 2014
Predicting Human Behavior - Social Mood Conferencel , Get the Socionomic Edge / InvestorEducation / Trader Psychology
By: EWI
Find out how at the 4th Annual Social Mood Conference
Robert Prechter forecasted more than 10 years ago that the War on Drugs would become more violent, leading eventually to the decriminalization of the possession and sale of recreational drugs. The Socionomist followed up in 2009 with an in-depth story by Euan Wilson called "The Coming Collapse of a Modern Prohibition." We published an update in November 2013, "Marijuana: The Mood Shifts, and Decades of Prohibition Go Up in Smoke," that was a timely reminder just before marijuana stocks exploded in early 2014. The recent rush of new state laws to decriminalize pot bears out these forecasts.
Friday, March 07, 2014
How Understanding Market Psychology Can Help You Time the Market / InvestorEducation / Trader Psychology
By: EWI
Two economic reports hit the newswires Thursday morning (March 6). Both were important, yet each one had the opposite implication for the trend.
The market chose one report over the other, and the question is, why -- and what can we learn from that?
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Friday, February 07, 2014
Dead Man’s Curve - Let's Hear it for Brain Damage / InvestorEducation / Trader Psychology
By: Janet_Tavakoli
Let’s hear it for brain damage. The Journal of Economic Literature reported that with regard to investments “frontal damage can result in superior decisions,” in the article “Neuroeconomics: How Neuroscience Can Inform Economic".
At least that is what the authors—Colin Camerer of the California Institute of Technology’s Division of the Humanities and Social Sciences, George Loewenstein of Carnegie Mellon’s Department of Social and Decision Sciences, and Drazen Prelec of the Massachusetts Institute of Technology’s Sloane School of Management—believe, even though such damage results in poorer overall decision-making ability.
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Tuesday, November 19, 2013
Are Market Bubbles Caused by Psychological Problems? / Stock-Markets / Trader Psychology
By: Frank_Shostak
According to the popular way of thinking, bubbles are an important cause of economic recessions. The main question posed by experts is how one knows when a bubble is forming. It is held that if the central bankers knew the answer to this question they might be able to prevent bubble formations and thus prevent recessions.
Sunday, October 27, 2013
Is Stock Market Perma-Bearishness a Form of Mental Illness? / Stock-Markets / Trader Psychology
By: Investment_U
Alexander Green writes: There was a revealing story in this week’s Wall Street Journal…
David Rosenberg, the chief economist and market strategist at Gluskin Sheff & Associates, spent a decade warning about the health of the U.S. economy and the future of the stock market. That meant he missed the bull market a decade ago but helped the firm’s clients avoid the 2007 to 2008 financial crisis. Unfortunately, he missed the rebound that followed. (Such is the fate of market timers and other psychics and clairvoyants.)
Wednesday, July 17, 2013
Nadeem Walayat's Trading Lesson - The Psychology of Technical Analysis, Past, Present and Future / InvestorEducation / Trader Psychology
By: Nadeem_Walayat
If you have read my past trading articles and ebook's you should understand that I consider Technical Analysis in large part to be a red herring in terms of the decision making process with regards trading. In that technical analysis assumes knowledge and understanding of past price history as the key towards trading success i.e. that the outcome of past price patterns are likely to repeat in the future and thus should be acted upon when they re-occur.
Monday, April 22, 2013
Robert Prechters Video on How Market Losers Think / InvestorEducation / Trader Psychology
By: EWI
Dear Investor,
To become an independent investor, you have to crawl before you walk and walk before you run.
Even after you're on your feet, the first step isn't easy: A nudge in the right direction can help.
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Tuesday, April 09, 2013
The Confidence Game / InvestorEducation / Trader Psychology
By: David_Petch
Last night I was staring at a computer screen with numerous bullet points for this article and was wondering how to weave them together and what to call it. After sleeping on it, the perfect title for this came to me...”The Confidence Game”. In human psychology, there are many different levels of human emotion or behaviour, from which other forms of behaviours stem. This might seem like a pointless exercise, but follow the flow chart below with a background thought about relating this to money, the banking system and precious metals.
Thursday, December 13, 2012
Important Factor In Determining Stock Trends and Election Outcomes / Stock-Markets / Trader Psychology
By: EWI
In the wake of the Presidential election, the Social Science Research Network (SSRN) reports that the study, "Social Mood, Market Performance and U.S. Presidential Elections" has earned the #3 spot among the most-downloaded papers in the past 12 months.
Tuesday, December 11, 2012
Social Mood Impact on Stock Markets and Presidential Election Results / InvestorEducation / Trader Psychology
By: EWI
In the wake of the Presidential election, the Social Science Research Network (SSRN) reports that the study, "Social Mood, Market Performance and U.S. Presidential Elections" has earned the #3 spot among the most-downloaded papers in the past 12 months.
Wednesday, August 15, 2012
Critical Trading Lessons - Trader Psychology: Don't Trade With Your Ego / InvestorEducation / Trader Psychology
By: EWI
Senior Analyst Jeffrey Kennedy is a busy man. Along with his regular duties at Elliott Wave International, he prepares 3-5 video lessons each week that teach technical traders how to anticipate -- and act on -- trading opportunities.
Subscribers say that what sets Jeffrey's educational service apart is his unique ability to combine easy-to-understand, actionable advice along with a no-nonsense, uncensored look at trading psychology.
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Wednesday, November 16, 2011
Investors Three Psychological Stumbling Blocks That Kill Profits / InvestorEducation / Trader Psychology
By: Money_Morning
Keith Fitz-Gerald writes:
Face it, the past 12 years have been horrible for most investors.
This is not necessarily because the markets have been rocky, but rather because the vast majority of investors are hardwired to do three things that kill returns.
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Tuesday, November 08, 2011
Are Crowds Capable of Identifying Stupidity? / InvestorEducation / Trader Psychology
By: Aftab_Singh
Herd opinion seems to be a chronically troublesome matter for the allocator of capital. Not only does the herd hold a deep suspicion for making money as such, but it seems that agreement is regarded as an imperative when it comes to considering the future. I might contend that the question; ‘How dare they consider that which all of us are unable/unwilling to consider?’ contains the primary sentiment behind the crowd’s contempt and condemnation… Supposing that this suspicion is true it might be considered quite important for us, as speculators, to overcome this. As ever, we think that it is contrary thought that reveals the key to prudence. Here I invite you to mull over the controversial question in the title; is the crowd capable of correctly identifying intelligence and stupidity?
Monday, February 14, 2011
The Short Story of How We Lose, The Concept of "Myopic Loss Aversion" / InvestorEducation / Trader Psychology
By: Ashvin_Pandurangi
A curious thing happened to a middle-aged Frenchman in Monte Carlo last year. He had unexpectedly received a year-end bonus of 10,000 from his employer, and decided to visit Le Grand Casino for a weekend, where he could relax and gamble with his new found wealth. Since his wife and daughters were visiting his stepmother that weekend, he would be able to focus entirely on making some money. His first night was judiciously spent at the Roulette tables, where his sharp instincts and calculated patience presumably allowed him to double his allotted wealth in just five hours. It was an excellent night for the man, who was now 10,000 richer, and he spent the next afternoon lounging in a cabana at the hotel's pool.
Wednesday, February 09, 2011
Resolving the Stubborn Psychology of Fish / InvestorEducation / Trader Psychology
By: Ashvin_Pandurangi
For those unfamiliar with the game of poker, it is essentially a game where players attempt to win money from other players at their table by having the best five-card hand at showdown or by betting their opponents off of the best hand. The most popular form of poker is Texas Hold Em', in which each player is dealt two "hole cards" followed by a round of betting, then a three-card "flop" followed with another round of betting, a one-card "turn" with betting, and finally a one-card "river" with the last round of betting. Each player can, but is not required to, use one or both of their hole cards, and must use 3-5 cards on the board, to construct their best possible five-card hand (from best to worst - straight flush, four of a kind, full house, flush, straight, three of a kind, two-pair, pair, high card).
Saturday, May 29, 2010
Addicted to Trading! / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
Don’t just do something---sit there…Zen Koan
The most difficult thing for traders to do is to sit there and wait. Why? Because, we live in a world that is on a total dopamine, hypomanic binge. This is never more clearly manifest than by those who absolutely have to be in the markets at all times, desperately need to be trading and simply cannot wait. They are human do-ings, rather than human be-ings.
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Tuesday, April 13, 2010
Common Sense, Bogus Metrics Plus Baloney Justifications, Is Silver cheap relative to Gold? / Stock-Markets / Trader Psychology
By: Graham_Summers
Almost every other day I receive an email from a concerned investor asking me if some asset is cheap relative to another asset or if some metric justifies that some perceived outcome is about to unfold.
Among the various question
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Friday, January 08, 2010
Trader Fatigue / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
Having trouble sleeping these days? You aren’t alone. The National Sleep Foundation’s 2009 study shows that some 30% of the U.S. population reports sleep disturbances. These include challenges with falling asleep, staying asleep or early-morning wakening with inability to get back to sleep. Last year, there were nearly 57,000,000 prescriptions written for sleep meds. That’s 57 million. In his book “Sleep Thieves,” Dr. Stanley Coren says that lack of sleep is causing us to be “clumsy, stupid, unhappy and dead.” Evidence is mounting that the tragic death of Michael Jackson was related to his inability to sleep without powerful sedative drugs.
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Monday, December 21, 2009
Are you Scared when you Trade Commodities? / InvestorEducation / Trader Psychology
By: Andrew_Abraham
I have seen countless times with inexperienced traders the fear that can come about. The reason of this fear is due to uncertainty in any particular trading situations. These traders do not have a plan. They get themselves into a situation in which they are losing money very quickly. Then there is the situation when one is scared and is stimulated to think. The reality is man is a lazy creature. He wants to be told what to do…how to invest and how to make money.
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Wednesday, October 28, 2009
The Psychology of Risk in Commodity Trading / InvestorEducation / Trader Psychology
By: Andrew_Abraham
The psychology of risk in commodity trading is not that often of an issue discussed. I want to share an interview with my colleague Martin Bedick.
Tuesday, October 27, 2009
Great Expectations / InvestorEducation / Trader Psychology
By: Charles_Maley
The best things in life are unexpected - because there were no expectations - ELI KHAMAROV
Legendary trader Roy Longstreet was once asked by Intermarket Magazine, “Why have you succeeded in trading to such a degree and why do most traders fail?” Roy answered “Many major problems people have in trading are caused by their expectations – of where the market is headed, how much money will they make from this trade, etc. One thing I learned that has helped me: it is wrong for a person to enter any market with any preconceived expectations.”
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Monday, October 19, 2009
The Red Badge Of Courage, Financial Markets are No Place for Bravery / InvestorEducation / Trader Psychology
By: Charles_Maley
If you lose hope, somehow you lose the vitality that keeps life moving, you lose that courage to be, that quality that helps you go on in spite of it all. And so today I still have a dream - MARTIN LUTHER KING JR.
Roy Longstreet, legendary commodity speculator once said, “To trade successfully, one needs two things: Knowledge and Courage. The knowledge you can learn or buy. Courage cannot be learned or bought. You either have it or you don’t. But you cannot succeed without it.”
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Friday, October 16, 2009
Trading Trap, Failure To Truly, Madly and Deeply Believe In Yourself / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
Magic is believing in yourself. If you can do that, you can make anything happen...
Johann Wolfgang von Goethe.
This trap is deceptively simple because most people, when questioned, say that they totally believe in themselves and deserve to be successful as traders.
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Wednesday, October 14, 2009
The Rhythm Of Living / InvestorEducation / Trader Psychology
By: Charles_Maley
Action and reaction, ebb and flow, trial and error, change- this is the rhythm of living. Out of our over-confidence, fear; out of our fear, clearer vision, and fresh hope. And out of hope, progress - BRUCE BARTON (AMERICAN CONGRESSMAN 1886-1967)
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Thursday, October 01, 2009
Come Out Of Your Shell (Part 1) / InvestorEducation / Trader Psychology
By: Charles_Maley
We don't see things as they are, we see things as we are - ANAIS NIN US (French-born) author
I was having a conversation with one of my clients yesterday on the subject of whether good traders are born or whether they can be taught. I brought to his attention that this was the identical argument between Richard Dennis and Bill Eckhardt back in the early 1980’s.
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Thursday, October 01, 2009
10,000 Hours To Graceland / InvestorEducation / Trader Psychology
By: Charles_Maley
The world’s a stage and most of us are desperately unrehearsed - SEAN O’CASEY, IRISH DRAMATIST
Do we really have a clear understanding of raw talent? Is there such a thing as a natural born trader?
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Thursday, September 24, 2009
Are You Trading For Thrills Or Dollar Bills? / InvestorEducation / Trader Psychology
By: Charles_Maley
According to Ori and Rom Brafman in their book “Sway” the National Institutes of Health (NIH) conducted a rather interesting experiment. They gathered participants and placed them in a MRI like machine and gave them a computer monitor and a joystick. Then they played a game.
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Thursday, September 24, 2009
Would You Pay Over $200 For A $20 Bill? Don’t Be Too Sure / InvestorEducation / Trader Psychology
By: Charles_Maley
I just read a very interesting book. It is called “Sway”: The Irresistible Pull of Irrational Behavior.
Max Brazerman is a professor at The Harvard Business School and introduces his new students to a game at the beginning of the semester. He auctions off a $20 bill with only two rules to the game.
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Wednesday, September 23, 2009
Why Are We Such Suckers For Prediction? / InvestorEducation / Trader Psychology
By: Charles_Maley
I keep CNBC on all day while I work. Perhaps I think I will miss something, or maybe it’s the background noise that’s appealing. In any event, what I always find amazing is the parade of experts making one prediction after another. I think I would fall out of my chair if I heard one of them say “Well, to tell you the truth Mark, I have no idea”.
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Tuesday, September 22, 2009
A Mindset Is A Terrible Thing To Waste / InvestorEducation / Trader Psychology
By: Charles_Maley
Success is the ability to go from one failure to another with no loss of enthusiasm - SIR WINSTON CHURCHILL
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Friday, June 05, 2009
Which Came First, The Happiness or the Success? / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
What’s the deal with happiness and success?
Why is it that we live in such an amazing world, filled with blessings and opportunities, yet so few are happy?
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Thursday, June 04, 2009
This Stock Market is a Fool’s Paradise / Stock-Markets / Trader Psychology
By: Q1_Publishing
Bernard Baruch, one of the world’s most legendary speculators, said, “The main purpose of the stock market is to make fools of as many men as possible.”
Right now, that’s exactly what’s going on. And I assure you, a lot of folks will be made into complete fools in the next year or so.
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Friday, March 13, 2009
Trading Emotions, Fear, Greed and Hope / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
How to Eat Like An Elephant - The legendary W. D. Gann spent a lot of time describing three emotions that drive most traders and investor—fear, greed and hope. You enter markets on the hope of gains, too often get greedy in expecting profits, and finally liquidate on fear . Your brain has not changed much from the time of the Neanderthal man who greedily hunted wild animals for food, and ran in fear from beasts and neighboring tribes that threatened his survival. Read full article... Read full article...
Friday, February 13, 2009
How to Succeed in the Current Market Conditions / InvestorEducation / Trader Psychology
By: Nazy_Massoud
These are uncertain and confusing times. Everywhere you look, any conversation you listen to, it is about the economy and its impact on our lives. We hear about deficit, raising taxes, unemployment and lack of liquidity. It is enough to make everyone enter a negative emotional spiral.
How can you deal with these uncertain times?
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Saturday, January 31, 2009
President Barack Obama: The Temperament of a Champion Stock Trader / InvestorEducation / Trader Psychology
By: Investment_U
I think President Barack Obama would make an exceptional short-term stock trader.
I've never met the man, personally. And I know nothing about his stock portfolio or whether he even has one.
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Tuesday, January 20, 2009
Stock Market Investor Sentiment Indicator Remains at Neutral / Stock-Markets / Trader Psychology
By: Guy_Lerner
The "dumb money" sentiment indicator remains neutral on the equity markets, and the "smart money" has turned more bearish. It should be noted that this is the sixth week in a row where the "dumb money" is neutral, and this is not a scenario that is generally supportive of higher prices especially with prices on the S&P500 under their 40 week moving average. The ideal situation for higher equity prices would be for the "smart money" to be bullish and the "dumb money" bearish (i.e., bull signal). Read full article... Read full article...
Tuesday, December 02, 2008
Trading Markets Trap #2 Failure to Take Personal Responsibility for Your Trades & Investments / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
"One can have no smaller or greater mastery than mastery of oneself… "
- Leonardo da Vinci
We buy stocks, options, futures, currencies, commodities, etc, because we want them to go up and make profits. We short them because we want them to go down and make profits.
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Thursday, May 22, 2008
Leadership and Trading / InvestorEducation / Trader Psychology
By: Nazy_Massoud
I was participating in a meeting the other day and the speaker was talking about leadership.
When I was thinking of leadership, it occurred to me that as traders, we own our business and we set its direction. We are leaders and how we run our business is very essential to our success.
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Thursday, April 03, 2008
How To Develop Your Mental Trading Edge / InvestorEducation / Trader Psychology
By: Nazy_Massoud
I was in Vegas speaking at a recent Trader's Expo. There were a lot of exhibitors, speakers and attendees. All were talking about how traders and investment managers could make more money.
There were various systems, numerous indicators to use, and various news sources to listen to.
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Wednesday, December 12, 2007
The Trading Doctor - Finding Your Trading Edge : Support & Resistance Levels / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
“I'd be a bum on the street with a tin cup if the markets were always efficient…” Warren Buffett
Edges are what separate successful from unsuccessful traders. Those traders who find and exploit edges are the ones who end up winning. Moreover, the ability to execute on an edge is at the heart of behavioral trading.
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Sunday, December 09, 2007
The Psychology of Investing in the Stock Market From 1996 to 2007 / Stock-Markets / Trader Psychology
By: David_Petch
Taxidermy refers to the job of taking the skins of dead animals and mounting them onto a plate of some form that depicts them in a naturally occurring state. With the era of photography and cartoons, this is not required for today's article. Instead, pictures are strategically placed onto the S&P 500 Index chart to “capture” what the general populous was thinking at a particular point in time.
One of the main reasons for this article taking along time to publish was finding the appropriate pictures. A picture is said to be worth 1000 words, so each picture is supposed to be representative of the thoughts of each individual at a certain point in the stock market cycle. The stock market is a barometer of how the economy is doing and the footprint left by the "tape" directly captures the summation of all participants. Many assume the market is a random beast that does not follow any particular pattern, but instead, quite the opposite is true.
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Monday, December 03, 2007
Traders - Get a Mental Edge to Avoid Tripping Yourself Up! / InvestorEducation / Trader Psychology
By: Nazy_Massoud
Have you been in situations where you had several winning trades which were wiped out by one losing trade?
Have these become a pattern?
Like some of my clients, you may be saying, “I have spent hours creating my plan.” Then you start the day with every intention of following it. After a few losing trades, you lose your control and with that, your plans go out the window. You try to make up for your losses by chasing after deals and increasing the size of your trades. So you get in at the wrong entry point and the size does not warrant the risk.
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Friday, November 16, 2007
Stocks Bull Markets Climb a Wall of Fear / Stock-Markets / Trader Psychology
By: Regent_Markets
After the party comes the hangover, and of course the bigger the party, the bigger the hangover. Over the last few years, financial companies have been gorging themselves on 'foolproof' credit trades, based on sub prime debt. Now the party is over and companies are having to face up to their antics in the cold light of day, says BetOnMarkets.com's Michael Wright.Read full article... Read full article...
Sunday, November 04, 2007
Intuitive Trading: Fact Or Fiction? - Part 1 / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
Why did you sell silver yesterday? Why did you buy the S&P e-mini (ES) just now? Why did you decide to cover your shorts in the dollar? Why? Why? Why?
If you ask these questions to a group of traders, you will likely get one of two types of answers. The first answer will be something about the indicators:
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Sunday, July 15, 2007
The Trading Doctor - Finding Your Trading Edge : Introduction / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
The heart and soul of trading is neurobehavioral. There is no way to deny this, as evidence continues to build that traders bring themselves and their brains into every aspect of trading. With this comes irrationality and neuropsychological biases.
The only way for a trader to succeed, i.e., perform in a consistently profitable fashion, is to have an edge. Those of you who have coached or mentored with me for any period of time will recognize immediately that I continually stress three critical elements of trading: risk control, money management and edge. What is an edge?
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Monday, July 09, 2007
Trading Doctor - The Trader As Hero / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
Courage is more exhilarating than fear, and in the long run it is easier. We do not have to become heroes overnight … just one step at a time, meeting each new thing that comes up, seeing it not as dreadful as it appears and discovering we have the strength to stare it down — Eleanor Roosevelt
Thursday, April 19, 2007
Trading Wisdom - Trading is a game of Probabilities and not one of Certainties / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
One of the great evils of trading is false exactness...Trading is a fuzzy process and I mean fuzzy in the best sense of the word. That is, as in fuzzy logic, as in the willingness to accept the idea that things aren't exactly quantifiable and to forge ahead anyway....John Bollinger ( creator of the Bollinger Bands)
Trading is not about perfection. It is about probability and progress. All charts, analyses (fundamental and technical) and trading plans are built on probabilities.
Why then, do so many traders strive for perfection? Why do so many traders miss trades, waiting for exactly the right entry and then beat up on themselves when it doesn't come and the position runs away while they sit there scratching their heads and condemning themselves?
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Tuesday, April 17, 2007
A look at Stock Market Psychology / Stock-Markets / Trader Psychology
By: Clif_Droke
The past five days were bullish, overall, for the stock market. That isn't surprising given the level of bearish sentiment we saw in last week's AAII investor sentiment survey. This week's AAII poll, released Thursday, showed a slight increase in bullish sentiment (41%) over bearish sentiment (38%). That's not enough of a disparity between the bulls and the bears to cause any overt worries in the immediate term, but it's enough to slightly increase our caution.
The still rising dominant internal momentum indicator for the NYSE, the 200-day HILMO index, should act as a strong underlying support for anything unusual that gets thrown at this market in the coming weeks. The interim trend remains bullish.
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Monday, April 02, 2007
The Trading Doctor - A Broken Heart - Learn to Trade with Discipline / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
And in the end, it's not the years in your life that count. It's the life in your years... Abraham Lincoln
Today, I had to admit a 25-year-old trader to the hospital. He complained of crushing substernal chest pain and collapsed at his trading desk.He will survive this, most likely. However, it is pretty clear that he will never be the same. No one gets out of this type of situation unscathed. The trauma will pass, and the immediate stress will dissipate. The anxiety and the post-traumatic stress will be with him for years to come.
Tuesday, March 27, 2007
Learning to Trade Financial Markets - Are you unbiased in your analysis of market direction ? / InvestorEducation / Trader Psychology
By: Marty_Chenard
A simple test to see if you look at the market in a non-biased way ...
One of the things that complicates are ability to read the market right is "non-objectivity".
Non objectivity is when we "have an opinion" of what the market will do and we subconsciously let that opinion tell us a different story of what the chart is telling us.
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Sunday, March 11, 2007
Trading Doctor - Trapped in Quicksand by Holding Losing Positions . - Cut your Losses Short ! / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
Take an old pair of jeans and cut a hole in one of the front pockets. Now, start pouring sand into that pocket. What happens? Sand runs down your leg and to the ground. What do you do? Keep pouring until the sand is up to your ankles? Your knees? Your waist?
At what point do you realize and act on the fact that no matter how much or how fast you pour sand into the empty pocket, you have a hole in your pocket? At what point do you come to the conclusion that you either have to stop pouring sand or just take off the pants and run away as fast as you can?
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Thursday, March 08, 2007
Trading Doctor - The Importance of Stress Control in Trading - The 'C' Word / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
Those who think they have no time for bodily exercise will sooner or later have to find time for illness...
Edward Stanley (14th Earl of Darby, 1799-1869)
The C word is not churn, candlesticks, commodities, contango, crash, curbs or any other Wall Street term that comes to mind. It's CORTISOL
Cortisol. an adrenal hormone, plays a critical role in the "normal" response to stress. By "normal" I mean "short-lived, fight or flight and it is over" type of stress. In this way, it is useful and protective to the body.
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Wednesday, March 07, 2007
Trading Doctor - When it All Falls Apart - Coping with Losses / InvestorEducation / Trader Psychology
By: Dr_Janice_Dorn
The worst lies are the lies we tell ourselves.
We live in denial of what we do, even what we think.
We do this because we're afraid…Richard Bach
Many years ago when I first started to trade, I went to a trading guru. In fact, I went to a several gurus. I asked them to help me, to teach me, to mentor me. Every one of them said "No", some more emphatically than others. The reasons they gave ranged from "I'm retiring soon" to "come back when you have a Ph.D. in losses and maybe we'll talk." In the interim, I got a Ph.D. in losses, but I never returned to any of them. Call it rejection sensitivity, call it stubbornness or call it whatever, I did not go back to the gurus. I learned the hard way.... by teaching myself. I made every possible mistake that a trader or investor can make, ranging from lousy stock picks to bad execution, not cutting losses, not letting profits run, not listening to the market.... and on and on.
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