Wednesday, January 14, 2009

Trading and Market Psychology: The Best of TraderFeed 2008 - Volume Two

Below are the standout posts from the second quarter of 2008; the first quarter's posts can be found here. Here are archives for the best of 2007 and the best of 2006.

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4 comments:

MACDOW said...

Dear Dr. Brett
As you know we all love your writing because its interesting and its writen in plain simple english. Not that I need plain simple english but that does make it more fun to read. This is slightly off topic but the following comes from an article on bloomberg. http://www.bloomberg.com/apps/news?pid=20601124&sid=a0DSeeJp9jWg&refer=home
The good Professor Coates, a professor at the Judge Business School at the University of Cambridge in the UK said the following.
“Economics hasn’t actually looked at the physiology of people in stock market bubbles and crashes to see if their rationality is being impaired by their physiology,”
Could you tell me what is this man trying to tell us and whats the point of studying digit ratios of London traders?

Tom said...

Dr. Brett,
Great stuff. RE: about the World Class Trader, Are there any World Class traders that Swing Trade or are all the great traders day trading the s&ps? Most of what I read on your blog about performance i.e. video taping yourself, heart rate monitors etc. has to do with day trading...correct? Having said that most of the trading errors/patterns can still happen in swing as in day trading just at a slower speed...so maybe just journalize your thoughts as a stock gets to your entry/exit point?

Brett Steenbarger, Ph.D. said...

Hi MACDOW,

Finger digit lengths are sensitive to hormonal levels (testosterone), which are in turn correlated with behavioral patterns (aggressiveness). So it does make some sense to correlate physiology with trader behavior--

Brett

Brett Steenbarger, Ph.D. said...

Hi Tom,

Many very successful hedge fund traders operate on swing time frames. I find that the challenges they face are similar to those of daytraders, with the exception of greater planning and execution focus on the part of longer time frame participants--

Brett