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Kim interviews Dr. Doug Hirschhorn, a.k.a. "The Trading Dr." They talk about the psychology of investors and the four most common emotional pitfalls traders face.
MP3 Download: Hi (128k) | Lo (24k)
Length: 23:40
Notes:
1:05 What is a trading coach, and what does that have to do with sports psychology?
2:42 Doug gives an overview of the four emotional pitfalls traders face.
1. Fear of Missing Out
2. Focusing on the money and not the trade
3. Losing objectivity on a trade
4. Taking on risk because you're up (or down) money.
3:40
If you're really here to make money, then don't make decisions that are
counterproductive, like making trades because you're afraid to miss an
opportunity.
4:42 Traders sometimes experience "trading injuries"
that can cause them to undertrade or lose confidence. It's similar to
when an athlete experiences a major injury.
6:40 In order to make money, you have to not focus on making money. You have to focus on making the right trade.
8:50
If you stick to your disciplines, you have good days/weeks/months of
trading, even if the outcome isn't good. The more you stick with your
good methods, you more success you'll have.
10:00 Manage your risk and the returns take care of themselves. But also make only high-quality trades where you have "edge."
11:33
Emotions can really mess things up. Something changes in our thought
processes when we have real money on the line. Use a system you develop
when you're sane, when there's no money on the line, and stick with it
when you do have money in the game. That's the gist of staying
objective when investing.
16:38 A mechanical investment strategy (following step by step) is good to take emotions out of the equation.
18:29
Doug explains pitfall #4 -- taking on risk because you're up or down
money. Casinos prey on this. To be successful trading, you need to
think like a casino thinks. Mental accounting sometimes messes us up.
Resources:
Dr. Doug Hirschhorn, The Trading Dr.
The Head Coach
Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.
