Tag Archives: Psychology
The Psychology of Trading – Positive Personality Traits – Part 2
Dear Reader
Trading and investing in the stock market not only means you need to have a thorough understanding of Fundamental Analysis, Technical Analysis, Trading Strategy, Portfolio Management and Risk Management. You also need to be able to understand yourself, or more importantly understand how you react to certain situations.
Here we have a list of personality traits that are akin to people we all know, and in fact we all have a little of all of them in us. Here we detail the positive personality traits.
Captain Contrarian
“A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.” Warren Buffet.
When the news is as bad as it could possible get, when brokers are losing their shirts, their jobs and their Porsches, when apparently sane people are moving to the country to live off the land because of economic meltdown, THAT IS THE TIME TO BUY, and BUY BIG. That is where the biggest profits are.
Sir Right Royal Run for the Hills
All successful traders incorporate the gentry into their trading style.
Be ready to change your opinion, quickly When the trade goes bad, get out! Pride = Pain in the stock market.
Corporal Commitment
Not a role usually associated with young males, however when you commit to a trade commit.
The most successful investors, when they have made a decision commit with everything they have. George Soros broke the Bank of England through his commitment to his belief. If he had gone into the commitment half heartedly, he would have lost everything.
Even if you commit everything be prepared to back out quickly, the size of your commitment, should not hinder your ability to change course in rough seas.
Sir Houdini
Always have an escape plan, know the criteria by which you will get out. Be it a bad earnings report, a loss of 5%, or a potential global financial crisis.
The Saint
My mother is a living example of this as she has the Patience of a Saint. Unfortunately I did not inherit this trait naturally, and have had to learn this the hard way. Profits, like a fine Italian Bardolino wine, take time to develop, but when they have developed taste so much better.
Private Timeout
You do not always need to be in stocks, give yourself a rest stay in cash until the coast is clear.
The Runner
Do not cut your profits short. Never say “when I make 15% I will sell”. I made this mistake with Smith & Wesson Holding Corp (SWHC). I bought this stock end of March 2009, for $ 3.25, when it broke through a 4 month resistance line. I sold on 10th March 2009, for $ 4.25 (30% gain in 10 days. A healthly gain.´ the stock went on to a heady proce of $ 6.61 over 100% gain. Ouch. Most important is of course make a profit. But if you can learn to control your emotions, and let it run, it big wins are there.
Brigadier Big Win
It is OK to loose, chances are you will lose 50% of the time, ensure you lose small and win bigger. We will learn more about stop loss strategies in future articles. I hope this section helps you to learn more about positive mental attributes required to help improve both the numbers of winning trades and the size of the wins.
Summary.
I hope this section helps you to learn more about positive mental attributes required to help improve both the numbers of winning trades and the size of the wins.
This Article was published by the Liberated Stock Trader – Barry D. Moore.
Related Positive Mindset Articles
The Psychology of Trading – Positive Personality Traits – Part 1
Dear Reader,
Trading and investing in the stock market not only means you need to have a thorough understanding of Fundamental Analysis, Technical Analysis, Trading Strategy, Portfolio Management and Risk Management. You also need to be able to understand yourself, or more importantly understand how you react to certain situations.
Here we have a list of personality traits that are akin to people we all know, and in fact we all have a little of all of them in us. Here we detail the positive personality traits.
The Philosopher
“The wise man knows that he knows nothing” Socrates
One way to gain confidence in your trades is always be a student, always look to learn, improve, and better your understanding. But do not kid yourself; you can never be 100% confident. If you are a true Philosopher you will also know what you do not know. Always understand that you cannot know everything, crowds make strange decisions, buying patterns fluctuate almost like organized chaos.
The Student
Learn, Learn, Learn and most importantly understand. This website is dedicated to this cause. Learn what the indicators mean, learn how to read a balance sheet, learn how earning affect stock price, learn about yourself.
Take a Jung Typology Test (10 minutes)
The Jung-Myers-Briggs evaluates personality type and preference based on the four Jungian psychological types:
extroversion (E) or introversion (I)
sensing (S) or intuition (N)
thinking (T) or feeling (F)
judging (J) or perceiving (P)
It is incredibly accurate and thought provoking.
The Good Shepherd
Understand that the market does not always move logically the market is emotional. Crowds are really emotional, the crowd is akin to sheep but amongst the sheep there are wolves in sheep’s clothing (negative earnings reports / bad news) and when the wolves unveil themselves the sheep tend to panic and scatter. Do not let the occasional wolf throw you off course.
The Believer
Having Self belief in the market place is vital and possibly the hardest of all emotions to develop, first you must become a philosopher, then a student, and only then can you start to believe.
Do not rely on anyone else to sell you the secret of success. If they had it they would not need to sell it to you because they would already be rich.
The Realist
Read the Section This will demonstrate to you, that in the real world, you will not become a millionaire overnight, in one year or ten years. However, given enough time, consistent profits and compounding, it is possible.
Stocks regularly move up and down 1-10% in a day. Sealing in a 10% gain in a day or week is an excellent result. Do not expect to double your money in a week, month or year, this is very rare, and this is the bait used to sell you trading robots, stock newsletters or secret trading strategies, it is all FOLLY.
“People who pay for automatic trading systems are like medieval knights who paid Alchemists for the secret of turning base metal into gold” Dr Alexander Elder – Trading for a Living p15. Joy of Winning Joy of Winning is a beautiful women, and to be in her presence is intoxicatingly good.
Winning is a way of life. But not always in the stock market, every day can mark us a winner or a loser. The true winners, have more money at the end that they started with. Winning can be addictive, but do not let it cloud your vision.
Joy of losing.
Believe it or not, there can be a great joy in loosing. I have had many times where I have bought a stock and instantly it turned strongly against me. How could I possible enjoy that? Easy! I get out of the stock quick. SELL. When I sell, and then the stock plummets, I get a deep satisfaction about how much money I saved by being nimble, flexible and most of all decisive.
Summary.
I hope this section helps you to learn more about positive mental attributes required to help improve both the numbers of winning trades and the size of the wins.
This Article was published by the Liberated Stock Trader – Barry D. Moore.
A completely free guide to learning how to find winning stocks, and make money from trading can be found on the http://www.liberatedstocktrader.com/ Website.
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Focus on Goals – The Positive Psychology of Hope
My favorite Positive Psychological strength is HOPE. If you have high hopes you look down the road of your life and see lots of potential accomplishments. You know there will be hard times – even times you’ll want to give up. You are, however, confident that ultimately your abilities (and your ability to solve problems) will lead you to new and better things. Your goals make life exciting and interesting!
Contrast this with a person of no or low hopes. That person still has dreams and goals, but those goals cause anxiety and self-doubt instead of interest and excitement. That person looks down the road of life only to see potholes, detours, and dead ends. Often just thinking about all those obstacles is enough to make someone quit before they even start. Better to stay wherever you are, even if it’s stuck in the mediocre mire, than to start something that will be a lot of trouble and won’t work anyway!
Good News! Hopeful thinking is something you can acquire at any age. Some people learn it as children, but if you learned just the opposite in your childhood there’s still time to change your outlook. No matter what your family background, your money “issues”, your education (or lack thereof) – you can raise your level of hope and look towards a more exciting future. Keep in mind I didn’t say it was easy – there are old habits of thinking and living that are safe and comfortable. Some of these old standbys will have to go. They will not go quietly.
Hope is active. Hope involves setting goals and finding ways to accomplish those goals. Sometimes it requires finding different ways if one path turns out to be a dead end. Hope also involves a driving energy force that keeps moving you towards your goal. You need the power of both your will and your creative ways. This is interesting – hope does not depend upon achieving your goal 100% of the time. All you need is a little taste of success along the way as you practice. Those little victories keep the feeling of hope building inside you.
Hope can be measured and hope can be taught. The first step is to ask the miracle question: If a miracle occurred and I could have my life exactly the way I want it, what would it be like? The next step is to look at all the arenas in your life and ask yourself that same question. If a miracle occurred and I could have my personal relationships exactly the way I want them, what would it be like? If a miracle occurred and I could have my career and work life exactly the way I want them, what would it be like? Do the same for physical health, education, finances, mental health, recreation and spirituality.
It is interesting that satisfaction with life does not necessarily mean the achievement of grand and glorious goals. It does mean that you have met the goals you set for yourself to your satisfaction.
Let’s say that your life would be most different if a miracle occurred in the arena of physical health, fitness and recreation. These may be areas that could benefit from a little boost of hope in your life. You might decide to set a goal to begin an exercise program. Next it’s up to you – your ability to find a way to begin and willpower to carry you through. The way is usually easy at first glance. You decide that a way to begin is to get up at 5:00 AM and run for a mile. Don’t forget to plan for a way to make you get out of bed! Maybe you need to move the alarm across the room and leave the snooze feature disabled. Will power doesn’t come into play right away, as evidenced by how many folks religiously pursue their New Year’s Resolutions – for three weeks. Will power has to kick in when you get tired or bored or aren’t seeing the results you wanted.
Hope is a way of approaching life that says YES and I CAN. Positive Psychology reminds us and our coaches and counselors that hope can be learned at any age. The best we can do for ourselves is to focus on what we CAN do and where we want to go. Clarity and persistence come from the hope we nurture in ourselves.
http://www.travisps.com
Dr. Mary Travis practices positive psychology in Winter Park, Florida. She evaluates for giftedness, learning disabilities, attention deficit, depression, anxiety, asperger’s disorder and emotional intelligence. Her practice niches are trichotillomania (compulsive hair pulling), trichadrem (skin picking) and victims of female bullies. She coaches and counsels individuals and groups for anxiety, depression, social skills, female bullying and body focused repetitive disorders.
Positive Psychology – What Makes People Happy is Pleasure
Smart Alek: I have been working very hard lately. Soon I will have my great reward.
Aleks Psych: What will that be?
Smart Alek: I will never work again.
Aleks Psych: What will you do if you do not work?
Smart Alek: What else, expect everyone else to look after me and vehemently complain if they try to stop! Their frustration and pain will be my ultimate pleasure.
All positive psychology practitioners agree that one crucial aspect in the psychology of what makes people happy is the development of pleasure. The seeking of pleasure underlines everything that we do. Even when we decide to do an activity that we know will not be pleasurable in the short term, we do it in the hope of it leading to an eventual outcome that will be pleasurable.
The research into how to become a happy person has shown that the pleasurable feelings and things that make people happy in the short term are not the most important factors in living a fulfilling life. Having a life filled only with pleasurable activities will not sustain most people as we need to have a greater sense of purpose that is effortful and aimed at benefiting others. I will address these issues in other articles. However, becoming a martyr is not how to become a happy person either. A life with little to no pleasure will lead to burn out.
When it comes to the psychology of happiness, learning how to become a happy person requires you to understand and develop the activities that you find the most pleasurable and know how to use them in order to increase the quality of your life. I have broken up the pleasurable things that make people happy into 2 categories, they are Regular Pleasures and Reward Pleasures. In daily life, it is important to have a few standard pleasures that are practiced regularly to make life enjoyable but in order to pull yourself towards growing as a person and achieving your greater goals, you need to create reward pleasures that you can only receive once you have earned them.
One of the flaws in the common psychology of what makes people happy in modern life, is many people are so used to immediate gratification that they will never obtain the full pleasurable feeling that comes from a reward that they have worked to earn. Compared to previous generations, luxury item debts are ludicrously high, and yet current generations are not happier. That is because the novelty of a fancy toy or experience that you did not work hard to obtain wears off quite quickly. You can not live a non challenging lifestyle and expect to feel intense pleasure. However, if your toy or experience is an honest and fair reward based on what you have accomplished, the potential pleasure of that reward once obtained is considerably greater.
When I decided to become a life skill coach and began work on my coaching program ‘Fulfilling Happiness’ one thing I really wanted was a motorcycle. However, I did not buy one. Instead I decided to make it my reward for when the program is completed. I can afford a motorcycle, especially when considering all I am seeking is an older bike that I can learn on. But I knew if I bought one, I would spend too much time on it learning and it would distract me from a more important and meaningful goal. That is why at the time of this article, I am still without a motorcycle as ‘Fulfilling Happiness’ is almost, but not quite complete. But that is ok, because in a short time it will be complete, and I will savour every moment of my sweet 100% deserved, completely guilt-free ride.
Positive Psychology: What makes people happy? Exercise: Write out a list of your current regular pleasures. (E.g. TV shows, social engagements, sports, reading, hobbies, creative pursuits etc) in your life and your larger pleasures (E.g. New products, holidays, special events etc). Then rank your regular pleasures in order of importance and plan how you could increase the time you spend on your favourites and decrease the time spent on ones that are not that enjoyable. With your larger pleasures, write down what important activities you need to accomplish first (and within what time frame) before rewarding yourself with them.
Aleks Srbinoski is a Clinical and Coaching Psychologist, Company Consultant, Creative Writer and Author, Humorist and Inspirational Motivational Speaker.
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