Brain Hacks For Traders: Hijack Your Mind Skyrocket Your Profits by Walsh Harvey

Author:Walsh, Harvey [Walsh, Harvey]
Language: eng
Format: epub
Publisher: Shelfless
Published: 2015-10-30T00:00:00+00:00

Hack It!

Let’s deal with the chatrooms and forums first. These are easy to handle — in theory. You simply stay away from them during trading hours. If you’re reliant on a trading room to make your decisions for you, then you’re not a real trader anyway, you’re just a clone. You might as well close your trading account and put your funds into a managed investment account. It’s the same principle and you don’t need to do the work of placing the trades. Real traders don’t need to be watching any kind of social media (unless, I suppose, you have figured out a trading strategy that makes decisions based on the activity of a large group of people, which isn’t the same thing as following individuals).

Like giving up smoking though, staying away can be easier said than done. The forums and chatrooms can be addictive. We’re social animals and we crave the company of others (level three of Maslow’s hierarchy). Most of us trade alone at home, so it’s natural that we seek out companionship in our work. Natural, but destructive. If you find it too difficult to switch off the forums, or close Twitter, then you’re in luck. There’s an app for that! There are web browser plugins and apps you can install that will block access to certain sites for fixed periods of time. Set one up to block your problem sites during market hours, and you will be removing temptation. It’s a bit like the smoker locking their cigarettes up in a safe. If they really really want them, there’s a way. But by putting them out of reach at a time when the temptation is not there, it makes it that much harder to access them when it is. See the Resources Page for links to some examples of blocking apps.

When it comes to the temptation to test new strategies that you pick up outside of trading hours, that’s tougher. Trying to improve on what you have is a virtue, but it shouldn’t be allowed to interfere with what’s already working. So if you want to try something new, I’d recommend doing so in a simulated environment. That can be paper trading, or a full-on simulator. Ideally you want to do this with recorded data that can be replayed in real-time outside of market hours. That gives you the chance to try out your new thing in close-to-real conditions, but still leaves you free to trade your regular strategy, which pays the bills.

That just leaves us with those seductive price moves that everyone seems to know about except us. The stellar spikes that beg to be traded, even though they don’t in any way conform to anything on our trading plan.

The way to deal with those is the same way we deal with contrast bias. Keep a model trade catalogue and train yourself to use it before every entry. That simple action should be enough to remind you, before you pull the trigger on the off-plan trade, that you’re about to do something really silly.

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