Trading Psychology : Overcoming cognitive biases

Trading is often about how to take the appropriate risk without exposing yourself to very human flaws.
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ShaunWhite
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Wed Mar 07, 2018 2:33 am

Euler wrote:
Mon Feb 19, 2018 10:17 pm
I can spot somebody that is going to struggle to trade from the way they project themselves.
I was considering a visit to Hook sometime but now I'm terrified that I'll get a thumbs down from the Emperor the moment I step inside the arena.

Seriously though a remark like that is how 3 pint lunches begin, you can't just stop there! :D

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ruthlessimon
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Wed Mar 07, 2018 4:46 pm

Euler wrote:
Mon Feb 19, 2018 10:17 pm
I can spot somebody that is going to struggle to trade from the way they project themselves.
Also, I will just say

The curse of knowledge is a cognitive bias Peter, careful on us newbies!!

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ShaunWhite
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Wed Mar 07, 2018 4:55 pm

ruthlessimon wrote:
Wed Mar 07, 2018 4:46 pm
Euler wrote:
Mon Feb 19, 2018 10:17 pm
I can spot somebody that is going to struggle to trade from the way they project themselves.
The curse of knowledge is a cognitive bias Peter, careful on us newbies!!
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max_usted
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Fri Mar 09, 2018 2:25 pm

Euler wrote:
Mon Feb 19, 2018 10:17 pm
I think some of it comes down to changing as a person, that's my experience anyhow.

I'm a different person from the one I knew before learning to trade. I can spot somebody that is going to struggle to trade from the way they project themselves.
What do you mean? What kind of behaviour would lead you to believe someone will struggle?
You often need to think and act in a way that just isn't 'normal' as the cognitive biases are there for social reasons and difficult to overcome.
Do you mean that you'd expect people who are lower on social skills (and I find such people are often high in terms of their analytical skills) would usually make better traders?

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ShaunWhite
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Fri Mar 09, 2018 2:47 pm

max_usted wrote:
Fri Mar 09, 2018 2:25 pm
Do you mean that you'd expect people who are lower on social skills would usually make better traders?
I can't wait for the Christmas party, sounds like it's going to be a riot.

max_usted
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Fri Mar 09, 2018 4:21 pm

ShaunWhite wrote:
Fri Mar 09, 2018 2:47 pm
max_usted wrote:
Fri Mar 09, 2018 2:25 pm
Do you mean that you'd expect people who are lower on social skills would usually make better traders?
I can't wait for the Christmas party, sounds like it's going to be a riot.
Lol

No it's just I've noticed this about a lot of people who are employed as analysts etc, fairly easy observation to make actually (I think).

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Euler
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Fri Mar 09, 2018 5:24 pm

Impulsive people tend to get into trouble easily and take too much risk, analytical types take no risk and never do anything then say it's impossible. You need a balance of two IMHO. Of course, there are exceptions, but you need to show a bit of humility and be middle of the road. Curious, but not a procrastinator. Able to assess risk, but willing to take some on. You sort of tend to find people who don't ask any questions are not curious enough, people who ask too many are often over qualifying things.

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Euler
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Fri Mar 09, 2018 5:31 pm

Thought so, I've done a video on it.

https://www.youtube.com/watch?v=RbHhD5PylAo

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SeaHorseRacing
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Fri Mar 09, 2018 5:50 pm

What Peter says is so true. I posted a long time ago, for most of us we need to change our paradigm.

For example, I have always been quite an impatient person, even when it comes down to eating at the table. I always just gulped my dinner down and drink like its going to be taken from me. So many nicks within your personality can pull through in your trading.

Things I used to do before I learned to trade were as follows, Smoke, bite my nails and not chew my food. Working on my paradigm has done this. I no longer do any of them things.

I quickly learned my problems with my trading where acting with impulse, rushing and compounding losses and that all links back to one area.Blowing banks could be related to my smoking, eating and nail-biting if that makes sense. In order to change that I had to change life outside of trading too.
Look at bad habits or behaviour issues the look to see if this is a similar cause within your trading.

I think anyone who does well at trading from originally struggling will show massive signs of being a different person.

I think the problem for most traders though is they are not prepared to do this, or for some, it takes them 5 years to realise this.

3 years ago, i used to be on this forum arguing 24/7 with every other member, I cannot remember the last time I did that, again another personality trait I worked on.

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to75ne
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Fri Mar 09, 2018 6:48 pm

SeaHorseRacing wrote:
Fri Mar 09, 2018 5:50 pm

3 years ago, i used to be on this forum arguing 24/7 with every other member, I cannot remember the last time I did that, again another personality trait I worked on.
i remember it well :)

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