- “There is only one thing that makes a dream impossible to achieve: the fear of failure.” -Paulo Coelho
- You win by living on your own terms–as well and as fully as you can, for as long as you can.
- If you’re chasing someone else’s goal, you always lose.
- Most people overestimate what they can do in a year, and they massively underestimate what they can accomplish in a decade or two.
Archives of “human behavior” tag
rssThree motivations For Traders
There are three motivations behind taking a trade: monetary reward, educational reward, and/or psychological reward. The first pays the bills, the second will pay the bills, and the last will prevent you from paying the bills.
Whenever I feel the pull of psychological reward, I have the voice saying “do you want to be a trader?” Letting go of the psychological need to take a trade or be right, is hard. Our brain does not know what money is. It listens in terms of chemical releases. Letting go of psychological reward is not easy. It is the most instantaneous form of reward.
The best way I know to give psychological power to money is to make a habit of seeing money as opportunity. Opportunity for financial freedom and opportunity to make another trade. The brain understands opportunity. This needs to be in balance as well.
If you are feeling the psychological pull, take a few seconds and answer the following. (more…)
Traders :Don’t Blame the Market or Others
- When pain surfaces, if you are honest and in touch with yourself, you will own the upset and seize the opportunity to release that internal reality — to forgive! Pain functions to inform us of our errors.
- False forgiveness is based on the belief that others are responsible for what we feel, and therefore it tends to reinforce that error. To forgive others, in this manner, for what happens in your mind leaves your pain intact and the opportunity to heal is lost.
- Making use of every opportunity to heal is an important decision you can make and that decision will immeasurably accelerate your process.
Prayer of Forgiveness
Hilal searches for inspiration on the golden walls, the columns, the people coming at this hour of the morning, the flames of the lit candles.
– I forgive the girl I was, not because I want to become a saint but because I do not want to endure this hatred. This tiresome hatred.
This was not what I expected.
– You may not forgive everyone and everything, but forgive me.
– I forgive everything and everyone. I forgive you because I love you and you do not love me. I forgive you because you reject me and I am losing my power.
She closes her eyes and raises her hands towards the ceiling.
– I am liberated from hatred by means of forgiveness and love. I understand that suffering, when it cannot be avoided, helps me to advance towards glory.
Hilal speaks softly but the acoustics of the church are so perfect that everything she says seems to echo throughout the four corners. But my experience tells me that she is channelling the spirit of a child. (more…)
Chimpanzees Are Like Stock Traders — They Take Gambles
Humans aren’t the only gamblers in the animal kingdom.
Our closest primate relatives, chimpanzees and bonobos, demonstrate behaviors considered basic to human economics such as delaying gratification and assessing risk, according to new research published Wednesday May 29 in the journal PLoS One.
Though they don’t bet on stock exchanges or casinos, they also have strong emotional reactions to games of chance — like when they are betting on food showing up. They don’t like losing or waiting for payouts, and can even correct their own behaviors based on successes or failures.
“Apes are also experiencing rich emotional reactions in an economic context,” study researcher Alexandra Rosati, of Yale University, said in a statement. “They are making decisions about their most valuable resource, which is food.”
“Even though economists can be quite puzzled about human behavior and what it means, biology suggests that these economic biases have their roots in non-human foraging behaviors,” Rosati said. (more…)
Persistence -Self Discipline
Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan “Press On” has solved and always will solve the problems of the human race.
– Calvin Coolidge
Persistence is the fifth and final pillar of self-discipline.
What Is Persistence?
Persistence is the ability to maintain action regardless of your feelings. You press on even when you feel like quitting.
When you work on any big goal, your motivation will wax and wane like waves hitting the shore. Sometimes you’ll feel motivated; sometimes you won’t. But it’s not your motivation that will produce results — it’s your action. Persistence allows you to keep taking action even when you don’t feel motivated to do so, and therefore you keep accumulating results.
Persistence will ultimately provide its own motivation. If you simply keep taking action, you’ll eventually get results, and results can be very motivating. (more…)
The Psychology Of Speculation – The Disconcerting Effect Of Sudden Losses And Gains
Time for another classic trading book excerpt. The subject is similar to the one in yesterday’s post. It is about limiting losses and ultimately becoming a better trader if you are willing to embark on that never ending journey to better understand yourself. James L. Fraser from Fraser Publishing clearly understood that. The introduction he wrote clearly shows his deep understanding of human psychology, trading and speculation. Human behavior never changes. That’s why I am a huge fan of old classics. Buy those books. Read them. Apply the wisdom imparted.
Henry Howard Harper: ‘The Psychology of Speculation – The Human Element in Stock Market Transactions’
Introduction
First privately printed by the author in 1926 and only found in secondhand stores at rare intervals this classic deserves a more wide spread audience. Harper’s human behavior material gives us insights into the handicapping prejudices that ruin our stock market theories and sound resolutions. Especially in our computer oriented age does the average investor seem incapable of calm reasoning , with the result that he often does precisely the opposite of what he had intended doing.
Moreover, Harper’s easy writing style clearly shows you how the correct ideas of theory are turned into the wrong formulas of practice, and how tickeritis, though mentally intoxicating, leads on to poverty. In a contrary way, we seldom see the favorite caprice of the stock market which is to violate precedent, and do the thing least expected of it. You had better believe it for there are no certainties in this investment world, and where you have no certainties, you should begin by understanding yourself. (more…)
10 Ten Reasons Traders Lose Their Discipline
Losing discipline is not a trading problem; it is the common result of a number of trading-related problems. Here are the most common sources of loss of discipline, culled from my work with traders:
10) Environmental distractions and boredom cause a lack of focus;
9) Fatigue and mental overload create a loss of concentration;
8) Overconfidence follows a string of successes;
7) Unwillingness to accept losses, leading to alterations of trade plans after the trade has gone into the red;
6) Loss of confidence in one’s trading plan/strategy because it has not been adequately tested and battle-tested;
5) Personality traits that lead to impulsivity and low frustration tolerance in stressful situations;
4) Situational performance pressures, such as trading slumps and increased personal expenses, that change how traders trade (putting P/L ahead of making good trades);
3) Trading positions that are excessive for the account size, created exaggerated P/L swings and emotional reactions;
2) Not having a clearly defined trading plan/strategy in the first place;
1) Trading a time frame, style, or market that does not match your talents, skills, risk tolerance, and personality.
This Brilliant Pyramid Outlines The 6 Steps To Financial Success
You’ve probably heard of Maslow’s hierarchy of needs.
It’s the ranking of primary human needs for psychological well-being as described by American psychologist Abraham Harold Maslow, and is usually illustrated not unlike the old-school food pyramid:
The financial blogger known only as Mister Squirrel recently shared his own version of Maslow’s hierarchy: the path to financial success.
Here’s what it looks like:
Time Tested Rules (Part 1)
Optimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.
Take a trading break. A break will give you a detached view of the market and a fresh look at yourself and the way you want to trade for the next several weeks.
It is a safe bet that the money lost by (short term) speculation is small compared with the gigantic sums lost by those who let their investments “ride”. Long term investors are the biggest gamblers as after they make a trade they often times stay with it and end up losing it all. The intelligent trader will . By acting promptly—hold losses to a minimum.
People who buy headlines eventually end up selling newspapers. (more…)