A good talk by Dan Ariely on self control, naturally very relevant to trading and operating in the financial markets. Every trader out there must be struggling with some issues of self control. Waiting patiently for a signal, not taking profits too early, not second guessing a candidate, controlling size, keeping stops, etc. etc.

I liked the example of using the reward substitute, watching the movie after taking the injection. Unfortunately I suspect it will still require quite a bit of self control, otherwise what’s stopping a person from watching the movie without taking the shot, “just this once”..

Tags: Dan Ariely, psychology, reward, reward substitution, self control, substitute, talk, TED, Temptations, trading

It’s been a while since I’ve updated my list of Best Trading Books which I recommend to traders looking to up their game. And there’s a good reason for that, I didn’t see anything interesting out there that would make it as a “Top Trading Book”, that’s till I recently came across this fantastic book. First I need to say this isn’t a paid or incentive driven review, I didn’t get a free book, and I have absolutely no affiliation with the writer. I just think that One Good Trade is a damn good trading book which almost any trader can benefit from.

I did skip the first couple of chapters (mostly prop trading related) but then instead of skimming through to the end like I would do with most new “get rich quick” / secret formula trading book for stocks / futures / options and all other instruments on the planet, I actually started seeing some really good material in it which kept me reading. It’s like one of those gem of a trading book that Dr. Brett Steenbarger publishes (his 2 books Enhancing Trader Performance and The Daily Trading Coach are absolute must read).

The author of One Good Trade, Mike Bellafiore covers almost everything you can think of in terms of the journey to becoming a good trader. From specific advice on Tools of Success:

To real world examples and explanations on sound trading building blocks such as

And more advanced stuff such as reading the tape, high frequency trading, when to press your winners etc.

Even if you’ve read dozens of trading books in the past (who hasn’t..) I would still encourage you to pick up this one.

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Now that I have your attention, here’s why you probably should be extra careful when someone offers you free frequent flyer miles to go along with their product or service.

The basic idea is that often people focus on near term concrete goals (such as frequent flyer miles), and while trying to maximize these immediate and clear goals they forget or discount the real reason for their actions — which in your case is maximizing their financial outcome.

Dan Ariely » Blog Archive Behavioral finance lesson – frequent flyer points? «.

I make sure to read as much material Dan Ariely publishes as I can lay my hands on. I’ve read his first book Predictably Irrationaland am looking forward to reading his second: The Upside of Irrationality.

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If sometimes you think life is tough, hard going, or unfair remember this girl Jessica Cox.

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I was thinking about trading strengths, weakness and was going to create a list for myself but found it hard to decide where to start. So I just started with brainstorming all the positive trading skills and traits, personal attributes and characteristics I could think of that successful traders might have. Here’s the list, see if I missed out on anything.

Discipline
Resilience in the face of adversity
Desire to continue and improve
Persistence
Curiosity
Creativity
Networking
Calmness
Courage
Competitiveness
Pattern recognition
Numerical skills
Practical (as opposed to idealistic)
Self confidence

Btw, INO is hosting a webinar and offering free access to MarketClub for 2 weeks, this isn’t one of those offers where you have to pay up front and cancel withing a certain amount of time, this requires no payment
info and cancels automatically in 2 weeks. Sign up here.

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If you’re trading or doing your job purely for money only then you’re missing out on some of the best motivators and sources of enjoyment and fulfillment in life.

via Dan Ariely

I’m reading the excellent book Outliers by Gladwell, it’s a fascinating analysis of success and how it happens, interwoven with biographies, history, psychology, science and social research. As a background work, I found it a good complimenting book to this one which covers more specific tools one can start using straight away.

Some of the most interesting and engaging topics to read about. Reading the paragraph below just now made a lot of sense to me, especially after I was talking to a friend yesterday over some beers and German food. And ended up “complaining” to him that I find it difficult to detach myself from the markets and the research and projects I’m involved in. I tend to only do that when I’m on vacation. This wasn’t always the case. Back when I was working for the man, from 6pm and on weekends I couldn’t care less about work. The following snipet from the story about the Borgenicht, a poor Jewish immigrant family arriving in New York in the turn of the previous century pretty much explains why.

When Borgenicht came home at night to his children, he may have been tired and poor and overwhelmed, but he was alive. He was his own boss. He was responsible for his own decisions and direction. His work was complex: it engaged his mind and imagination. And in his work, there was a relationship between effort and reward: the longer he and Regina stayed up at night sewing aprons, the more money they made the next day on the streets.
Those three things — autonomy, complexity, and a connection between effort and reward—are, most people agree, the three qualities that work has to have if it is to be satisfying. It is not how much money we make that ultimately makes us happy between nine and five. It’s whether our work fulfills us.

Eventually the Borgenichts’ business they started in their $8 a month apartment with one sewing machine became one of the largest manufacturers of clothing in the US.

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