The Ingredients Necessary for Trading Success
Must read for those who are interested in understanding market crashes and macro trading. Not as useful for those whose trading or investing time horizon within a week or so. Overall a good book to keep as a reference.
Manias, Panics and Crashes: A History of Financial Crises
Written by Charles P. Kindleberger and Robert Z. Aliber
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Mr. Gilbert tells us how we keep making bad decisions even though we know clearly how not to. It is one of the original Ted Talks that really drive home the difficulties of making sound decisions that involve both time and money.
Note: Be reminded that it is a long talk at 34 minutes.
Perception matters.
Most of the time, it is our worse enemy in trading.
It takes practice to hammer into our mind making rational decisions only in trading.
It takes more than just practice to be patient in trading. Not an easy task at all.
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Ms. McGonigal talks about stress and how new findings in human response to stress leading to overhaul of our understanding of stress.
Ms. Gonigal mentioned courage which is really the main theme of the video.
Courage is known to be a born with characteristics. Some prefer calling it a potential only because it still takes effort to bring out the courage. What Ms. Gonigal says is that courage can be developed through the willingness to connect with other people and the willingness to feel what others feel.
I am bringing this up because traders are often facing adverse scenarios. Many people simply paralyzed when they are facing sudden change in the market environment that their logical self just couldn’t keep up. Courageous people, however, has the advantage of accepting the situation and move on.
I am not saying that trading with so much emotional swings is a good thing. I am saying that if the market can inflict emotional swings on you so badly, you need courage to overcome the adversities. What Ms. McGonigal says is a way out to reprogram our mind so that we can handle stressful environment better without the innate advantage.
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