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Stress management

  
  Education
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A lecturer, when explaining stress management to an audience, raised a glass of water and asked,

“How heavy is this glass of water?” Answers called out ranged from 20g to 500g. The lecturer replied,

“The absolute weight doesn’t matter. It depends on how long you try to hold it. If I hold it for a minute, that’s not a problem. If I hold it for an hour, I’ll have an ache in my right arm. If I hold it for a day, you’ll have to call an ambulance.”

“In each case, it’s the same weight, but the longer I hold it, the heavier it becomes.” He continued,

“And that’s the way it is with stress management. If we carry our burdens all the time, sooner or later, as the burden becomes increasingly heavy, we won’t be able to carry on.” (more…)

Successful, positive people have different brain connections

  
Analysis, Education, Video
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Scientists have for the first time observed a connection between particular brain centers and the presence of talent, success and positive lifestyle choices in people. The fMRI technique opens the door to extensive research which could improving human cognition.

The research was undertaken by the University of Oxford’s Centre for Functional MRI of the Brain (FMRIB). It took a large sample of 461 individuals, and crossed them with 280 behavioral traits, as well as demographic, traits – including language, vocabulary, education, income and others.

 

 

The initiative was part of the $30 million Human Connectome Project (HCP), funded by the US National Institutes of Health, aimed at studying the neural pathways of the brain. In this particular study, the Oxford team wished to create an average map of the brain’s processes.

“You can think of it as a population-average map of 200 regions across the brain that are functionally distinct from each other,” Professor Stephen Smith of Oxford University, said.

“Then, we looked at how much all of those regions communicated with each other, in every participant.”

The resulting maps, which the scientists called connectomes, included 280 behavioral and demographic traits for each subject. Compiling all data, a ‘canonical correlation analysis’ was able to establish correlations between the two data sets.

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Book Review: MarketPsych

  
  Education

Traders, especially discretionary traders, have long recognized the importance of psychology to their endeavor—trying to fathom not only what’s in their own heads, but what’s in the heads of those on the other side of their trades.

As a result, there is a fairly extensive bibliography of books and articles on trader psychology. Not so with investor psychology, at least not outside the world of academe. Richard L. Peterson and Frank F. Murtha, co-authors of MarketPsych: How to Manage Fear and Build Your Investor Identity (Wiley, 2010), seek to help fill that void.

The authors, by training a psychiatrist and a psychologist, are also the co-founders of MarketPsych LLC, a company that “trains financial advisors, portfolio managers, traders, and executives in emotion management and intuitive decision skills.” Its website offers free personality tests for investors and traders.

Throughout the book the authors draw on the findings of research in 

behavioral finance. For instance, in one chapter the authors identify ten investor blind spots (or mental traps), some of which should be familiar to those who have read (or read summaries of) the work of Kahneman, Tversky, Thaler, and their colleagues and followers.

The traps are: win/lose mentality, down with the ship syndrome, anchoring, mean reversion bias, endowment effect, media hype effect, short-termism, overconfidence, herding, and hindsight bias. The authors profile hypothetical investors, each of whom falls into between two and five of these traps. We meet the Wicked Gardener, Corporal Clinger, Mr. Magoo, the Roulette Player, and Maxwell Smart. Let your imaginations run wild trying to match them up! (more…)

Patience, Preparation and Performance

  
  Education
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Everything is difficult before it becomes easy.

With the current volatility of the financial markets, it is extremely important that each of us resolve to be patient in our decisions and not make snap judgments. These can create future disaster.

The most successful individuals around the world have a foundation of processes that they utilize consistently, no matter whether the markets are trending with clear direction or being extremely volatile.

Each of us needs to be patient and allow the trading plans that we use to provide points of execution for trades. We need to be prepared for any and all movements in the market, yet stay committed to our plan and then perform with a self-confidence that ensures that we do not stray away from the steps of our plan.

Patience, preparation and performance surrounded by a solid trading plan along with money and risk management will produce the highest probability for profitable success.

Preparation combined with Opportunity creates a new word I would like to give to you — Prepartunity. Every day provides new opportunities for us. If we are prepared then we will receive the highest results possible.

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