Subconscious Errors.

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sigmund1

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In our family we're big on the mind.

Our Nan paid for us to have psychology lessons when we were kids.

Our Nan is a financial genius, it goes back generations.

Our Nan flies private all the time.

Think Jane Fonda, not Dowager Duchess, Downton Abbey.

Think Yoga, Vegetarianism.

We still have family share certificates dating back to Jonathan's Coffee-House London.

Everybody is prone to making errors of judgement, most people make more and bigger errors than some.

If you've got to get out of a warm bed and commute to work then your probably the victim of generations of subconscious errors.

Although most people will instantly reject that concept when told it. Especially the ones that have to get out of that warm bed.

And if that's you, then you've just made a subconscious error. Easy isn't it!

The Error...

You probably think you are rational, logical person who makes smart decisions most of the time.

The Fact...

You are not as smart as you think you are, you make lots of mistakes and your social economic position in society reflects this.
 
Should be Easy

Trading that is...should be easy.

Should be easy to make a profit.

Should be easy to make a BIG profit.

Our Nan's good at trading.

So, how come...

Because she doesn't make the mistakes most other traders make.

Over a large number of trades her profits are bigger than her loses.

How difficult is that.

According to strong scientific research most people find it impossible... Bless.

The Myth...

Your a strong minded individual and it won't happen to you.

The Truth...

Your a nervous little soul that will close the position first sight of profit but will hang on to a losing position until the pain is too much.
 
If you open a journal of after event trades , you won't experience this sort of reactive patterns , folow all these after event journals and enjoy a fantasy of trading experience , of being a winner .

You can post after event , and feel good about these imaginary trades.If it is a loss , you just have to treat is a long term investment , but if it is a profit join the "after event posters " and post here.This will make you feel profitable.
 
Disposition Effect

Discovered in Behavioral Finance 50 years ago.

Daniel Kahneman, Nobel Prize winner wrote about it 30 years ago.

But what is it...

It's the reason 90% of traders lose money.

It's a traders inability to to cut their loses.

The Myth...

90% of traders believe they don't suffer from it.

The Reality...

90% of traders suffer from this psyche in bucket loads.
 
sigmund1 said:
Discovered in Behavioral Finance 50 years ago.

Daniel Kahneman, Nobel Prize winner wrote about it 30 years ago.

But what is it...

It's the reason 90% of traders lose money.

It's a traders inability to to cut their loses.

The Myth...

90% of traders believe they don't suffer from it.

The Reality...

90% of traders suffer from this psyche in bucket loads.
Click to expand...

You are mistaken , almost 99 % suffer from it , but the idea is to keep this information hidden from potential traders .The trading gold rush mechants are all making fortunes from it , and if you told them "there is no gold " , the speculators would run .

This is why Forex factory forum has no psychology section.only trading systems and price action courses (without the human brain command centre failure information).


http://www.trade2win.com/boards/foyer/223126-vendors-tactics.html

BTW good psychology behavioural lectures by psychologist ANDREW Menaker on youtube.
 
Say What

I did make a mistake, a big mistake, a really big mistake.

90% of traders think they don't suffer from it.

The Disposition Effect that is.

How wrong could I have been...

90% of traders haven't even heard of it.
 
When a trade breaksdown or your stop loss is hit or trade goes against you by a few ticks or market become chaotic , highly volatile and wild or other risk event , your subconcious takes over and your primitive response system comes in to give the commands of the brain.


Trading is stressfull mental activity , it arouses emotions and stress responses , Your emotional brain is faster than your rational , it calls all the shots in live trading.

Our emotions have helped us immeasurably over the course of human evolution. Emotional responses are milliseconds faster than cognitive (thinking) responses; the lightning-fast reactions that bypass the rational brain centers were often survival responses for our distant ancestors. The limbic brain sends us the warning of a crisis before the rational brain can even process the incoming signal: the body has been alerted and is ready to act on our behalf.

An Amygdala Hijack is an immediate and overwhelming emotional response out of proportion to the stimulus because it has triggered a more significant emotional threat. The amygdala is the part of our brain that handles emotions. During an Amygdala Hijack, the amygdala "hijacks" or shuts down the neo-cortex (the command centre of the brain).Mistakes are made especiality when your brain is not in reality

http://www.trade2win.com/boards/edu...92-your-brain-wasnt-built-handle-reality.html

The prefrontal cortext holds the circuitry we need for abstract thought. It allows us to concentrate on the task at hand while storing useful information in temporary storage for later on. It also prevents you from performing inappropriate actions and is basically the command centre for the brain.


Search on google

"amygdala and prefrontal cortex emotion"
"amygdala hijack"
"amygdala hijack examples"



http://www.trade2win.com/boards/psy...nt/194038-no-plan-no-trade-8.html#post2893844
 
BeedyBrandy said:
Trading psycholgoy is important but using a strategy that works is critical
Click to expand...

Most trader fail because of the pychology , they do not fail due to the lack of systems/methods.

There are plenty of system and method vendors and plenty of very good free systems .

Search on google for t2w high probability system 75%

I also use other systems , where I call trades in advance and post them here on t2w , so it is not lack of systems.
 
It's in the Genes.

I read that 90% of the worlds wealth is controlled by just 10% of the worlds population.

I also read that just 10% of people who use market timing and stock picking methods make a profit.

I also read that 90% of people who try stock picking and market timing lose money.

Crickey, that's a coincidence, the numbers are identical.

Does this mean that successful profitable traders are born not made.

Does this mean that successful profitable traders inherit from their successful profitable ancestry.

That's tough titty if from the council estate.
 
sigmund1 said:
I read that 90% of the worlds wealth is controlled by just 10% of the worlds population.

I also read that just 10% of people who use market timing and stock picking methods make a profit.

I also read that 90% of people who try stock picking and market timing lose money.

Crickey, that's a coincidence, the numbers are identical.

Does this mean that successful profitable traders are born not made.

Does this mean that successful profitable traders inherit from their successful profitable ancestry.

That's tough titty if from the council estate.
Click to expand...

That is true ,losers learn from losers (read on google loser's personality) winners learn from winners , winners have winners as role model and losers have snake oil salesman .Snake oil salesman from council estates breed more snake oil salesman , they can't trade so they sell snake oil.
 

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foroom lluzers said:
When a trade breaksdown or your stop loss is hit or trade goes against you by a few ticks or market become chaotic , highly volatile and wild or other risk event , your subconcious takes over and your primitive response system comes in to give the commands of the brain.


Trading is stressfull mental activity , it arouses emotions and stress responses , Your emotional brain is faster than your rational , it calls all the shots in live trading.

Our emotions have helped us immeasurably over the course of human evolution. Emotional responses are milliseconds faster than cognitive (thinking) responses; the lightning-fast reactions that bypass the rational brain centers were often survival responses for our distant ancestors. The limbic brain sends us the warning of a crisis before the rational brain can even process the incoming signal: the body has been alerted and is ready to act on our behalf.

An Amygdala Hijack is an immediate and overwhelming emotional response out of proportion to the stimulus because it has triggered a more significant emotional threat. The amygdala is the part of our brain that handles emotions. During an Amygdala Hijack, the amygdala "hijacks" or shuts down the neo-cortex (the command centre of the brain).Mistakes are made especiality when your brain is not in reality

http://www.trade2win.com/boards/edu...92-your-brain-wasnt-built-handle-reality.html

The prefrontal cortext holds the circuitry we need for abstract thought. It allows us to concentrate on the task at hand while storing useful information in temporary storage for later on. It also prevents you from performing inappropriate actions and is basically the command centre for the brain.


Search on google

"amygdala and prefrontal cortex emotion"
"amygdala hijack"
"amygdala hijack examples"



http://www.trade2win.com/boards/psy...nt/194038-no-plan-no-trade-8.html#post2893844
Click to expand...

"prefrontal" is an oxymoron. in front of the front wtf??? its either the front or it isn't :confused:
 
piphoe said:
"prefrontal" is an oxymoron. in front of the front wtf??? its either the front or it isn't :confused:
Click to expand...

The limbic brain sends us the warning of a crisis before the rational brain can even process the incoming signal: the body has been alerted and is ready to act on our behalf.
 
There are so many important elements -

But one must have a PLAN.

The plan must be the basis for the test, of not only the validity of its productivity, but also the test of the persona to actually follow it to the finest detail.

The initial plan does NOT have to yield trading results. This is the hardest part for aspiring traders to appreciate. As we are nurtured to believe results count (ie from school on wards).

"3 out of 10 - bad boy, you'll never get anywhere in life!!!!"

So naturally with this upbringing, we are scared to be wrong, and create any defence mechanism possible.

Try to keep all plans clear, not too complicated and see where we go.

All in my opinion only of course
 
I'm sure Daniel Kahneman got out of his warm bed 5 days a week and commuted to his university office before he won the Nobel prize.
 
It's all in your Mind.

Decision making has sometimes been called cognitive illusions.

Merely learning about illusions does not eliminate them.

Investors and traders, the majority are dramatically overconfident and optimistic.

Prone to an illusion of control where none exists.

The Illusion...your in control, you know what your doing.

The Truth...it's an illusion in your mind and your in for a good spanking.
 
piphoe said:
"prefrontal" is an oxymoron. in front of the front wtf??? its either the front or it isn't :confused:
Click to expand...

In mammalian brain anatomy, the prefrontal cortex is the cerebral cortex which covers the front part of the frontal lobe.
 
Geeks v Monkeys

I've just finished a cup of Kopi Luwak coffee, sat in our Nans Tudor Box Widow Seat overlooking the Tudor Box Garden, how cool is that!

Anyway, does Wall St make subconscious errors, maybe so.

Hedge Funds and Investment Funds.

They hire all sorts of people, Geeks, Maths Experts, Savants, Engineers, Quants, Rocket Scientists, Psychopaths, lots of psychopaths and an array of people you probably wouldn't invite over for Sunday lunch, thats if you had any sense at all.

But the question is, why do 80% of Funds Under Perform the Index's in the short term and all funds under perform in the long term.

Maybe Wall St should just get a Monkey with a dart.

Monkeys are a lot more entertaining.
 
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