Trading Psychology

This page contains mostly links to content I have gained a lot from or I thought rings true to my own experience. Where relevant I have added some context/notes on what I found useful. I add to this page as I come across new and useful material.

Trader Feed by Dr Brett Steenbarger

He is a psychologist who started working with traders, his bio is here. This site contains many articles around different issues traders have / mistakes they may encounter and suggestions on ways to identify and correct the mistakes.

He’s also on Twitter which is good because then you just get one article or idea at a time.

The Trading Tribe by Ed Seykota

The insights I have gained from reading Ed’s material are really profound and yet seem simple. I came across his story from Jack Schwager’s Market Wizards series (Ed’s story is from the first in the series) Schwager published a series of interviews with Traders he heard about through word of mouth and market reputation. The books are definitely worth reading but Ed’s interview was a standout for me.

One phrase in particular was one I keep coming back to:

“Everybody gets what they want out of the market”

At first I thought this was complete bullshit because who wants to lose?? The more I thought about it and combined it with another phrase also from the same interview:

“Can a losing trader turn themselves into a winning trader?”

“No. That’s what winning traders do.”

These two ideas combined have done more for my trading than anything else. The implication of the first idea is that ‘if you wanted something different then you would do what you need to in order to achieve the other outcome’.

Ideas that fall out of this include:

  • you need to know what you are doing right now, in very precise detail
  • once you know exactly what you are doing, you can start to change it
  • then you record the results of that change
  • if it’s an improvement in outcome then you keep the change
  • if not you make another change and observe the outcome of that change.
  • detailed record keeping is required of trades, thoughts, circumstances.
  • awareness of what happened before, during and after the trade.
  • awareness of how you respond to events and influences in your life including work, family, winning and losing, financial pressures, social influences.