Friday, January 15, 2010

A Cognitive Self-Appraisal for Traders

Yesterday's post offered a self-appraisal of emotional experience for traders. Now let's follow that up with a cognitive self-appraisal. See where you stand on these cognitive pairs:

PATIENT . . . . . . . . . . IMPATIENT

FOCUSED . . . . . . . . . . DISTRACTED

OPEN-MINDED . . . . . . . . . . CLOSED-MINDED

PREPARED . . . . . . . . . . UNDER PREPARED

CLEAR HEADED . . . . . . . . . . CONFUSED

ALERT . . . . . . . . . . FATIGUED

Your mind, not your hardware or software, is your ultimate trading tool. The quality of your thought and perception will be reflected in the quality of the actions you take.

If you correlate your emotional self-assessment (from the last post) with this cognitive assessment, you may be able to see patterns regarding how your emotional experience affects your processing of market data and patterns.

And those are likely to affect the trades you take, how you take them, and whether you take them.



The Stock Speculator said...

I don't want to argue, but it's a well known secret that the more screens you have the better the trader you become.

For the record I have 9 screens and a 55" backlit LCD in my office as well.

Just sayin'


zacht said...

hi brett

on last night's post, i was STRONGLY skewed to the right

i was anxious more than i was confident

i was full of regret and lacking happiness

i was very frustrated and not satisfied at all

and althoug i was motivated to succeed, i am very depressed

i do try my best

you say a successful trader is determined part by how much time he spends when the market is closed

and to that, i am confident that i do my part

but it's been a year and a half and it's still very very hard

my account is making fresh new lows by the day

but i simply don't get it because i seem to get the market "correct"

it just seems like though that i get stopped out of every single trade that i make, only to see it go my way a little while after

in today's post you brought up several more attributes while trading

and unlike yesterday's list where i was scoring on the bad side, on today's list i was dominantly on the right side

i am very patient, i plan my trades

and for that, i am focused, and i pay attention to multiple factors

i am somewhat open-minded, until i plan my trades after assessing market action

i can say i am prepared, judging by the time i spent the day prior

and although i try to keep an open mind, i am always full of doubt, a doubt that i will once again lose money on the day, so i guess that is not so "clear headed"

and although i am alert, i am frustrated and feel helpless and tired for the above reason

what can i do?

Ziad said...

Hi zacht,

I don't know if this will help, but check out this small blog post I wrote a few months ago addressing some fundamental reasons why most traders stay frustrated and never see success. Hopefully you can take some insights from it and turn your situation around.

All the best....

JimRI said...


I saw a new perspective in the latest book by Malcolm Gladwell. "What the Dog Saw." His short chapter titled "The art of Failure: why some people choke and others panic" explained a lot for me. When choking we go back to being a beginner where we consiously think through every move and we are not operating from our automatic mind. In panic we are not thinking at all. I think what I do is get into the choking mode too often. Maybe that is true for you too.