Overcoming cognitive biases

Trading is often about how to take the appropriate risk without exposing yourself to very human flaws.
max_usted
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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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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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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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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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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 :)
max_usted
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Euler wrote:
Fri Mar 09, 2018 5:31 pm
Thought so, I've done a video on it.

https://www.youtube.com/watch?v=RbHhD5PylAo
That's a great 'vid', thanks very much Peter. I know which side of the balance I'm on, but do think I'm getting better and great to hear that you successfully conditioned yourself to take on more risk.
Dave C
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ShaunWhite wrote:
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.

Ha I was thinking the exact same thing, Shaun :D

I'm impulsive and a procrastinator- where do I fit into all this?

Seriously though, I have all the books that Peter suggests reading and I'll read them all one day but you know what- I'm scared I won't see and "get" it. Reading some of the posters on here sometimes makes me think that to succeed in Trading you have to be a Superbrain. It's quite offputting.
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Derek27
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Dave C wrote:
Fri Mar 09, 2018 10:06 pm
Reading some of the posters on here sometimes makes me think that to succeed in Trading you have to be a Superbrain. It's quite offputting.
I would imagine most marathon runners once couldn't imagine themselves running 26 miles and thought it's only for the super fit. But I reckon most people in fairly good health, even people like me who skip their two-mile run because it's cold outside and spend the evening drinking eight cans of beer instead, would be capable of training for and completing a marathon if they're determined enough. :)
Dave C
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The difference is Derek that a large percentage of people who put in the sufficient training can run a Marathon. We're constantly told that only 5% can make a living doing this.

I think I read that up to 25% of climbers die attempting to scale Everest? Yeah, f*ck those odds!
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ruthlessimon
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Image
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SeaHorseRacing
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Thats brilliant, thanks for sharing Ruthless
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Derek27
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Dave C wrote:
Fri Mar 09, 2018 11:00 pm
The difference is Derek that a large percentage of people who put in the sufficient training can run a Marathon. We're constantly told that only 5% can make a living doing this.

I think I read that up to 25% of climbers die attempting to scale Everest? Yeah, f*ck those odds!
Don't take any notice of what you're constantly told - just take notice of what you have reason to believe.

I don't know if it's 5% of Betfair users or 5% of people who attempt to turn professional (with no clear definition of attempting to turn professional), but either way it sounds like a complete guess.

More importantly, in relation to your post, you don't need to make a living from trading, or even large amounts, to be classed as successful.
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ShaunWhite
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Dave C wrote:
Fri Mar 09, 2018 11:00 pm
We're constantly told that only 5% can make a living doing this.
5% might be true, but if you exclude the lazy, the impatient, the dickheads and those without the time, sufficient capital or humility to recognise their own weaknesses, I reckon it's much closer to 50/50. It's certainly not the case that everyone starts with a 5% chance.

You mentioned being intimidated by the 'superbrains', fear not, it's certainly not a prerequisite although starting with a particular type of brain is a distinct advantage.

Not overly analytical and not overly impulsive seems to be key (quelle surprise) and beyond that it seems to be beneficial to have experienced having to accept authoritarianism, perhaps a strict or military background (Eg cb) where you learn to obey orders and surpress your own instincts. Yet at the same time it helps to be a contrarian. Strange mix.

That last point isn't critical as people can retrain themselves to be disciplined especially the younger ones or some people just naturally are disciplined. But speaking from experience as someone who'd never 'done' rules, it's a son of a bitch to change how you tick and maintain it 100% of the time.
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Derek27
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ShaunWhite wrote:
Sat Mar 10, 2018 1:39 am
5% might be true, but if you exclude the lazy, the impatient, the dickheads and those without the time, sufficient capital or humility to recognise their own weaknesses, I reckon it's much closer to 50/50. It's certainly not the case that everyone starts with a 5% chance.
That's a good way of putting it. Peter has often made the point that random trading, if you exclude commission, can result in breaking even. You only need to find a slight edge and apply strict discipline to exploit the edge. So perhaps it's the lack of basic qualities that are attainable by many that leads to unsuccessful trading, rather than lack of brain power.
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