We tend to intend of trading ideas too positions inwards price of their objective characteristics: the marketplace set traded, the location of the trade, its direction, the size of the position, the target, etc. This tin possess got the resultant of making whatever i merchandise await similar to others when a trader behaves inwards a disciplined fashion. It becomes confusing to the trader why but about seemingly proficient ideas run out too others don't.
Suppose, however, nosotros intend of trading inwards subjective terms: how ideas acquaint themselves to the trader. For example, but about ideas are experienced yesteryear the trader primarily equally subjective hunches too felt tendencies; other ideas may endure expressed equally explicit, planned ideas. Still other ideas tin manifest themselves equally images: pictures of what the trader thinks volition happen. Yet other ideas possess got the degree of analogies too metaphors, sometimes drawn from other markets, other times from exclusively other spheres of experience.
Moreover, traders inwards the same market, looking at the same information (technical, fundamental, etc.) may procedure this information quite differently. Just equally nosotros possess got unique combinations of personality traits, nosotros also possess distinctive cognitive styles.
Where fear, greed, overconfidence, stress, risk, too dubiety may impact surgery is yesteryear nudging traders out of their normal, effective cognitive styles. Under duress, a conceptual trader may human activity impulsively on a hunch. An intuitive trader mightiness overthink markets. The trader who reasons inwards images or metaphors may decease likewise item oriented, analyzing where they should endure synthesizing.
This suggests limitations to the green coaching of traders, which tend to focus on strategies too feelings, non the cognitive path yesteryear which ideas are generated too expressed equally trades. Traders may locomote into slumps, non because of marketplace set dislocations or psychological stress alone, but because of subtle too unrecognized shifts inwards how they procedure information.
A cognitive framework for thinking nigh trading surgery strikes me equally uniquely promising too fits good alongside my observations of hedge fund portfolio managers. In my adjacent postal service on this topic, I'll offering a specific event too elaborate but about of the implications of this thought for self-coaching.
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