trading psychology

Exploring the Nature of Trader Intuition: Research from Cal-Tech

In short, ..."tests show that Theory of Mind (ToM), rather than mathematical, abilities are better predictors of success in forecasting stock markets".

By |January 9th, 2010|Definitions, Pure Science, Risk Decisions|0 Comments

The Rose Bowl & Risk Decisions

60 seconds in and Ohio State is plowing down the field. As I write this sentence, they dropped the ball in the end zone. … Try it again – 3 and 10 and in!! Now the question relevant to trading and risk psychology is … 15 minutes ago did they KNOW that was how it […]

By |January 1st, 2010|Learning Psych Cap, Markets, Risk Decisions|0 Comments

Risky Business

Here’s an ironic twist – research shows it is easier for the human mind to comprehend and leverage probabilities and logic IF the question is posed in terms of people versus cards, numbers or objects. Yet research also shows that we continue to build arsenals of data in the form of numbers and that in […]

By |December 28th, 2009|Risk Decisions|0 Comments

What I Learned/Re-Learned @ Harvard

A few weeks ago I trekked to Cambridge for Harvard’s annual Investment Decisions and Behavioral Finance conference. Excited to hear a speaker list that included renowned economist Richard Zeckhauser, MIT’s Andrew Lo and Michael Mauboussin who recently authored THINK TWICE, The Power of Counter-Intuition, I admittedly however didn’t know quite what to expect.

Reflecting now – […]

By |November 22nd, 2009|Emotion Analytics, Learning Psych Cap, Risk Decisions|0 Comments

An Emotional Conversation over at Tyler Cowen’s Marginal Revolution blog

Somewhere down the road, you just might find you agree with more than you expected. Or worse, learned a thing or two about making better decisions in the face of UOUP (rhymes with soup) - uncertain outcomes uncertain probabilities.

By |October 28th, 2009|Emotion Analytics, Risk Decisions|0 Comments

“Emotional arousal” is not something to avoid, but to master. By Elise Payzan Le Nestour

All this suggests that emotions are key information providers when deciding under uncertainty. They make us tuned to our environment. Actually, in some contexts of fast and intuitive decision-making in the face of unstable (high vol) conditions, one expects that the stronger the emotional uncertainty signals of the day-trader, the higher the performance.

By |October 20th, 2009|Emotions & Decisions, French PhD Chick, Risk Decisions, Worth Reading|2 Comments

Conviction, Anxiety and Belief

I mean we also hear "believe in yourself" but where do these advisories leave you when a trading idea is going wrong? How do you handle the teeter totter that holds belief and conviction on one side and price and risk management on the other? What fulcrum can you depend on?

By |October 19th, 2009|Risk Decisions|0 Comments

New Risk Psych from Academia Pt. 2 – Social & Affective Neuroscience Conference

If you have tried reappraisal or what most call reframing or even reprogramming and it didn't work for you, don't waste one second wondering or worrying about why. The Darwinian nature of trading and the meaning of a red P&L is almost certainly a "bottom-up" emotion and behavioral & brain picture evidence says that strategy worsens the situation.

Risk Psychology & Neuroeconomics Society 2009

Back and rested from a weekend trip to academia –

The annual Society for Neuroeconomics meeting, held in Evanston this year, reviews a cornucopia of pre-publication research papers centered on the topic of decision making under risk and ambiguity. With everything from electrodes being implanted into patients who were having brain surgery for intractable epilepsy to […]

By |September 28th, 2009|Emotion Analytics, French PhD Chick|0 Comments

Another one-year later post – with a twist

A year ago tonight I was merrily watching my Cleveland Browns actually win while on a Jet Blue flight to the CME’s Inaugural Global Financial Leadership conference when my first cell beep on landing was Bill Long calling to say LEH was BK and ML was BAC. 365 days after that watershed event we have […]

By |September 14th, 2009|Markets|0 Comments