Psychology
Continuing from my last post, I want to explore how emotion influences our thinking and bias. Humans are not (purely) rational In my trading and investment work, one of the things I stress is that all human decisions are made from a combination of reason and emotion. Even if you
General Comments
It’s been a rough few months for all of us—everyone, all over the whole world. I want to share a few thoughts on the coronavirus epidemic, politics, and what this reveals about human thinking. For future reference, this is being written in late May 2020, and the U.
Psychology
In the face of recent historic moves in stocks, crude oil, bonds, and many currencies, it is a good idea to step back and think about a fundamental question: what really moves markets? The one thing In the short term, only one thing moves markets—buying or selling pressure. In
Psychology
Trading can be emotional. The market often has volatile moves and it seems new highs or the end of the world are just around the corner. In this environment, it’s natural for traders to be emotional. Of all the emotions traders deal with, regret is probably the most common.
General Comments
Here’s a bit of a stream of consciousness post in response to today’s (5/13) market movements. First, these types of moves are often called ‘risk off’ moves because we see nearly one-sided trading in different assets—people rush to sell assets that are perceived as risky (stocks
Psychology
Creativity is, for me, right at the heart of our growth as humans. In this post, I’ll share some ideas for connecting with your own creativity and bringing the power of a new perspective to problem solving. Right away, we run into a problem. “Creativity” is a problematic word.
General Comments
One of the very positive advances over the past decade is the amount of attention focused on cognitive biases. We are, through the work of some gifted authors and speakers, becoming aware of how easily our brains misfire and cause us to make mistakes. The list of cognitive biases is
General Comments
So, it's January 14th and I'm writing my first blog of the year. There's an important lesson here: habit, momentum, and daily rhythm are important. I have come to believe the power of habit is one of the most-neglected truths of the human experience.
Individual Traders
In a Facebook discussion group I run, Dan asked if anyone was worried about the market. In this own words: Should have gone to cash, taken a day or three off, and turtled up, gone small. Didn't.Struggling with fomo, missing out on the big one, when it
Market Math
In a previous post, I gave a look at my published swing trade record, with a title on the post of Trading is Hard! Let's revisit that concept, almost exactly a month later. The point of that post was that outcomes are "streakier" than we wish--we
Psychology
Trading is ugly. Many of us, when we first get into the business, have the idea that the market will eventually be an ATM machine—you can sit down at the screen, do some things, and money will come flowing out. In the very long run… yeah, it sorta works
Psychology
Many traders struggle with making impulsive trades. For some reason, we can create the best and most carefully crafted trading plan, review the patterns we intend to trade, and resolve ourselves to doing everything correctly—but then we discover that half the trades we execute don’t fit into the