Thursday, May 29, 2008

Constructivism: Changing Viewing and Doing

All of us are like scientists, in that we are driven to make sense of the world around us. Just as scientists construct theories to explain their observations, we generate our own mental models that provide coherence to our experience. When a trader speaks of his or her trading, the depiction is not a photographic representation, realistic in each and every detail. Inevitably, some facets are left out and others are emphasized, as the trader creates a narrative. This narrative is constructed to fit with the trader's existing mental models. What we're hearing is not reality, but the trader's reality: how the trader is construing his or her experience in the markets.

Our mental maps are necessary--without them experience would seem chaotic--but they are also prisons of a sort. Fixed modes of viewing lead to fixed modes of doing: we can become trapped by the lenses through which we view the world. One trader, affected by his childhood, sees the market as a battleground of "us versus them". Another trader, equally influenced by his experience, regards trading as a way of overcoming past failure and finally proving himself worthy to others. Still another views trading as an arena for displaying his intellectual prowess and tinkers, tinkers, tinkers in search of grails.

Constructivism in psychology emphasizes that the goal of change is the ability to revise our mental models just as scientists revise their theories. By encountering experiences that don't fit our models, we have the opportunity to change those models to account for new experience. That is why all psychological change requires novelty and discrepancy: the good psychologist afflicts our comfort as well as comforts our afflictions. New experience forces us to alter our viewing, and that leads us to alter our doing.

The challenge for traders seeking to change is to generate their own novel, discrepant experiences. Talking to a counselor or coach, in itself, or writing in a journal does not create change. Change requires fresh experience that we can internalize--i.e., that can revise our mental maps. Just as new viewing leads to new doing, new doing can generate fresh views. More on this aspect of coaching oneself shortly to come.


Becoming the Play-Actor of Your Ideals

The Relationship Between Happiness and Success


Raphael said...

I enjoyed your entry, but can you elaborate on what you mean by discrepancy in the last two paragraphs? Thank you

Brandon Wilhite said...

Nice post.

For some reason I've been thinking a lot lately about the human capacity to create stories for/about ourselves. Specifically, I've been thinking about how we tend to inject present knowledge into the stories we tell ourselves about past decisions. It's a dangerous thing for traders.

This post is about another facet, however, which is how we inject idealizations of ourselves into our narrative of the present.

Good things for me to meditate on.


The Financial Philosopher said...

Dr. Brett:

Would you agree that self-awareness is paramount to the kind of "viewing" that would result in constructive "doing?"

If we know ourselves intimately, we may obtain the level of emotional intelligence required to make rational decisions but more importantly to avoid situations that get us into trouble.

Science may help us to understand ourselves as humans but aligning our "viewing and doing," I believe, is an inner-production that has more to do with our mind than our brain...

Thanks for the thought-provoking post...

"You have power over your mind - not outside events. Realize this, and you will find strength." ~ Marcus Aurelius

SSK said...

Hello Brett, very interesting points, That is very true regarding change, when I have a losing trade, I like to go back and play the day in rewind, and completely let the emotions of the loss go, and knowing what is about to happen during the replay of that slice of market action, creates a positive thought pattern instead of dwelling on the negative pattern that actually occured earlier,,its like you can trick your mind into believing that you actually took the right trade. It seems to have helped me, or maybe my short term memory is just fried! LOL Thanks as always, Steve