The Psychology of Trading

In our debt to others, we find the true measure of our wealth.

How we seek values and manage the associated risk will determine our personal and professional success.

You can only learn to master the markets by immersing yourself in the markets.

Possessing the right tools is necessary, but not sufficient, for success.

Acting counter to one's initial impulses is the winning move.

Solutions are the patterns we enact between problems.

Successful market participants seek out their weaknesses and learn when they fail. Unsuccessful ones avoid their short comings and, thus, fail to learn.

How people deal with losses

When a trader loses a good portion of capital on a botched trade, it is not so much the dollars and cents impact that becomes depressing, as it is the loss of hope that one can ever recoup.

Depression is nature's way of conserving energy, damping the diversion of resources towards ends deemed unreachable.

The difference is that the depressed trader has lost hope as well as money. The mechanical trader pushes forward precisely because losses are built into the system with no mechanisms for anticipating or handling losses, the depressed trader sees no future and loses all motivation.

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Learning from adversity

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