- Find a voice recorder and record your stream of consciousness through the sequence of two to three trades or decisions.
- Do this in sequence
- Write down five to ten memories from before you were 18 years old.
- From that list, pick three that stand out from the rest. Maybe they still have an emotional charge, maybe you even think of them every once in a while.
- For these three memories, write the story of what happened, in the form of a kind of news report on who, what, where, why, and when.
- Take these stories and look at them from a different point of view. Ask what the other people in the story were feeling or what it seemed like they were feeling.
- Last, write down how the situation made you feel in the moment and what you told yourself about the situation.
- Then set the writing and the recordings aside for a few days or weeks. Just let both simmer in the back of your mind.
- Keep a bedside notebook and jot down your thoughts and feelings from your dreams right away. What matters is the sequence of feelings and emotions in the dream; or, in other words, those feelings that you wake up with in reaction to the events in the dream.
- Now summarize the following using the data of your memories
- What do I expect for myself?
- How do I expect things to turn out?
- How do I seem to feel about myself?
- What kind of labels do I talk about myself with?
- What fears come up?
- How do I react to others?
- How do I react to being told something other than what I want to hear?
- Go back to your trading recordings and summarize what feelings came up during your decision-making moments. We are looking for the themes and feelings that repeat themselves across market and decision sequences. Compare his information with what you discovered in the previous steps. What seems similar? If it doesn’t immediately click, let it rattle around in the back of your brain for a few weeks.
Archives of “Cognitive science” tag
rssUS President Trump says Congress have reached a deal on debt limit suspension
As if there was ever going to be any doubt the US would once again add to its gargantuan deficit
Trump says a deal has been reached between Congress and the White house
- debt limit ratcheted higher
- for the coming two years
For those with a stick up their you know what – this is not a real photo, K?
Risky cravings
“When you are threatened with extinction, you act like nothing matters,” said Andrew Lo, a professor at M.I.T. who has studied the role of emotions in trading. Mr. Kerviel, he said, is a case study in loss aversion.
“The best traders are the ones who have controlled emotional responses,” Mr. Lo said. “Professional athletes have the same reaction – they use emotion to psych them up, but they don’t let those emotions take them over.”
Successful, positive people have different brain connections
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.
Strong correspondence between a set of brain links and positive lifestyle/ behaviour traits http://t.co/T6uPlytCfc pic.twitter.com/X7fUZvSZkI
— Oxford University (@UniofOxford) September 29, 2015
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.
Self-awareness
1) the recognition that our thinking and our emotions are intertwined and both influence our perception and judgment that leads to our decisions and actions (this view also happens to be consistent what the leading brain scientists are now saying)
2) much of our motivation – the intertwined thinking/emotion that drives our behavior – is actually subconscious, e.g. we assume we are trading the market but on other levels we are also trading our P&L and our feelings about our P&L (and what our P&L represents to us) is just one example.
3) when we understand (self-awareness) the underlying/subconscious motivation for our behavior we are in a better position to choose an alternative.
Obviously, nothing can guarantee change or improvement (contrary to many claims made by pseudo “experts”), but at least an approach that emphasizes expansion of awareness puts the odds in your favor. (more…)
Read these 12 Books to become A Better Trader/Investor
1. The Talent Code by Dan Coyle. There are four ingredients for being good at anything, thus trading. Domain knowledge, critical feedback, sustained energy, and purposeful practice. Train with these ingredients to find trading success.
2. Golf if Not a Game of Perfect by Bob Rotella. Confidence trading a $GOOG or $SPY is something built and essential. This book, written by a top sports golf psychologist, helps you learn to build real confidence.
3. The Daily Trading Coach, by Dr. Brett Steenbarger. Dr. Steenbarger is the Coach K of coaching in the trading world.
4. Bounce by Matthew Syed. This book studies why a small cluster of young lads in England became the best table tennis players in the world. This read emphasizes the importance of great coaching for elite performance.
5. Drive by Daniel Pink. When we were young our parents preached, “Find something you love and do it. The rest will take care of itself.” Dan offers a better thought, “Do what you do.” If you are not trading, then how can you really love trading? In today’s world the barrier for entry into trading is almost nothing. Paper trade, open a small account, back-test. But you should be trading if you love trading. Do what you do!
(more…)
One Liners for Traders
- “The paradox is realizing that being in control is about letting go.”
- “Even if you give your investments to others to manage, you are wholly responsible for that decision.”
- Letting go of your ego doesn’t create self-esteem. In order to trade soundly, you must lose your ego AND replace it with sound, prepared, professional judgment.
- The conscious mind assembles the data. The unconscious mind notices the patterns, makes the connections and guide your judgment.
- “The depth of your emotional resources is as important as your finances.”
- “The market is a collection of beliefs.”
- There is no content, only context.
- “If we ever fought battles, the main opponent was ourselves.”
- “If you persistently adopt someone else’s view, expect their performance. In that case, why don’t you just put the money into one of the thousands of funds and crystallize your implicit delegation of responsibility.”
Deliberate Practice & Learning Curve
How much time do you spend each week practicing trading-specific skills, obtaining feedback about your performance, and consciously working on improving your performance?
Do your trading results reveal a positively sloped learning curve? What specific skills have you learned–and do you employ–over the past year that have made you a better trader?
4 Main Reasons Why Traders Fail
# They do not understand that the markets are a mirror of life on a chart. Markets are a living thing and reflect crowd behaviour and your own, view of the world. CAVEAT: How you see yourself and the world is buried deeply in the subconscious part of your mind.
# Traders do to understand their own authentic personality hence they find it hard to settle on a trading style. Know yourself well, it makes THE difference between long term trading success or failure.
# Traders fail to notice how they transfer the feelings and emotions of the collective consciousness to their trading believing that their emotions and feelings are their own. Self awareness brings market knowledge, literally.
# Traders have subconscious mental blocks which they supress with superficial positive thinking and learned discipline. We all have blocks, to think that you are the one who has not is dangerous arrogance. Welcome to the experience of oneness!
Fear or Greed
Fear and greed are powerful emotions. The key is determining which one is more important to you. Having your portfolio outperform your brother-in-law’s in an up market? Or minimizing your losses in a down market? Because you can’t have both.