Category: Behavioural Finance * Brainstuff

Jul 22

Steve Johnson – The Intelligent Investor

By Mandi in Behavioural Finance * Brainstuff

I went to the ANZ E-Trade Cocktail event to see Steve Johnson from the Intelligent Investor (www.intelligentinvestor.com.au) speak. To be honest it went totally above my head. I had no clue what on earth he was talking about. Afterwards I had a little chat with him and it turned out that he had no clue …

Jul 05

Test Your Mental Sharpness

By Mandi in Behavioural Finance * Brainstuff

Check out those 10 brainteasers to test your mental sharpness that I have found in an Forbes Magazine article. 1. Johnny’s mother had three children. The first child was named April. The second child was named May. What was the third child’s name? 2. A clerk at a butcher shop stands five feet ten inches tall and …

Jun 29

What do Galileo and Aristoteles Have To Do With The Quality Of Your Trading Decisions?

By Mandi in Behavioural Finance * Brainstuff

I just read an interesting article on http://www.newyorker.com/online/blogs/frontal-cortex/2012/06/brain-experiments-why-we-dont-believe-science.html#ixzz1z5kOiuCU. Here is an excerpt: “In a 2003 study, Kevin Dunbar, a psychologist at the University of Maryland, showed undergraduates a few short videos of two different-sized balls falling. The first clip showed the two balls falling at the same rate. The second clip showed the larger ball falling at …

Jun 16

The YOU Factor – Behavioural Biases

By Mandi in Behavioural Finance * Brainstuff

So many times we hold a position for the wrong reasons; you enter a position for a particular hopefully valid reason and then the trade doesn’t bring the expected results. But rather than getting out of the position and moving on we hold on to them far too long. Our excellent trading strategy is replaced …

Jun 16

Why We Take Our Profits Too Quickly

By Mandi in Behavioural Finance * Brainstuff

Another behavioral bias that can be a challenge to traders is what we call ‘framing’ in NLP. Framing describes the natural tendency of humans to subconsciously feeling drawn to discounts. Let me give you an example: Last year I purchased a brand new high performance computer for my trading. The local computer shop offered the …

Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

Testimonial Disclosure: Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.

Please note even though the website name is tradingpsychology, we are not psychologists but highly trained qualified professional coaches.
Trading the financial markets (especially on margin with leveraged products) carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any instrument you must carefully consider your objectives, level of experience, and your personal circumstances.

The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading the financial markets, and we recommend you seek advice from an independent financial advisor.

Any information is general of nature and does not take into account your financial situation, objectives, or your individual circumstances and needs.
Please ensure that you fully understand and acknowledge all risks involved before entering into any trades.