Thought For A Day
Archives of “January 12, 2019” day
rssRevolutionary Trading Psychology
Everyone thinks the market is a game of numbers. We use complex models, umpteen oscillators or retracement calculations and even a fundamental analysis of supply and demand – all based in numbers and about numbers.
But in reality, the numbers of the market are but an illusion.
Markets are only the vacillating prices that other human beings, using the same mathematically based tools, are willing to pay. For example, what can be expensive one day can be very cheap the next if a trend has ensued.
It is only a matter of perspective. And perspective is a matter of the judgments you make.
Judgments on the other hand will be influenced by both impulsive feelings and by intuitive feelings – or pattern recognition. The trick is to have all the data on the table so you can tell the difference.
In order to do this, us market participants need to do a couple of things – give up the notion of a iron-clad trading plan based purely on historical probabilities and replace it with a trading plan based on historical probabilities (yes you read that right) AND a systematic way to leverage your judgment under uncertainty. This way you can make a decision about factors that may now be in play for the future probabilities. I mean who thought the VIX could stay over 30 for 6 months? … I am just askin.
Now in order to do this successfully, you have got to learn to optimize your judgments – which means spending more time focused on deciphering and understanding them than you spend on deciphering and understanding the charts.
This is revolutionary trading psychology – and it works.
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A few thoughts from Ari Keiv
Top Five Quotes From Market Wizard Ari Kiev:
One of the therapies for depressed and suicidal patients is to help them become more self-reliant and assertive. These same skills are applicable to athletes and traders as well. – Kiev
This was the first of a number of interesting comparisons Kiev made between athletes, traders, and other psychiatric patients. The big take-away for me was a reminder that regardless of what you are doing, it takes an enormous amount of effort to become a world-class talent.
More specific to this reference, I can see why Kiev would want to encourage traders to become more self-reliant and assertive. This would give them a feeling of control and responsibility for their outcomes. This would likely remove the buy and hope aspect of trading and force the trader to focus on the things that they can actually control, like risk and position size.
If you’re going to make it, then you have to start today to do those things that are compatible with what someone who is performing at that level is doing. Most people don’t believe it is possible and settle for not succeeding, or at least not succeeding at the level they have chosen. You have to be willing to put yourself on the line and go for it, even with the thought that you will feel humiliated if you don’t make it after you have promised that you would. – Kiev
This quote had a big impact on me. It makes perfect sense and reminded me of little league coaches telling me that you’ll play how your practice. Kiev takes that a step further by adding that you have to believe success is possible or you are doomed from the start. In the interview, he discussed how he forces traders to set lofty goals for themselves and then use those goals to determine what they need to accomplish on a daily basis.
This is one of the biggest struggles I face in both trading and life in general. The name of this site was actually a derivative of the fact that I didn’t like talking about stocks at work because I was afraid people would point out what I didn’t know. That type of fear has held me back for years, so it is enlightening that Kiev commented on it.
Promising the result commits you to doing it and leaves you no alternative but to do it if you are going to live by your word. Letting others know that you have set a goal and are committed to achieving it makes it more likely you will achieve that goal, whether it is in the realm of athletics, trading, or something else. – Kiev (more…)
Bill Gates teaches you how to count to 10
5 trillion dollars.
Get Comfortable With Being Uncomfortable
In the trading world, you will either make money or lose money on any given trade. All that matters in the end is making more money when you’re right than you lose when you’re wrong. Knowing this, traders have learned to accept failure as part of the game, but they also use the information they acquire from their mistakes as a learning tool. Frequently, what they learn from losing money is more valuable than what they learn when they make money”
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Perspective
Words to live by: "Nobody knows anything."
The European Countries With The Most Psychiatrists
If Europe is driving you nuts, we have some simple advice… head to Finland!
As Statista’s Niall McCarthy notes, according to new Eurostat data released to mark World Mental Health Day, the European Union has about 90,000 psychiatrists in total and Finland has the most per 100,000 inhabitants (23.60) followed by Sweden (23.19) and the Netherlands (22.95).
You will find more statistics at Statista
The fewest per 100,000 people can be found in Malta (9.49), Poland (9.01) and Bulgaria (7.59).
In 2014, 183,500 people across the EU died due to mental and behavioural disorders with women accounting for around two-thirds of all deaths.