Books that subscribers might find interesting

[nicolas]

I discovered this book when it was recommended by Jason Shapiro and found it interesting for its deep dive into the psychological aspects of trading.

The takeaways from Market Mind Game won't be anything new for long-time TI subscribers (keep a journal, visualize staying calm in stressful situations, a trader should focus on their health like an athlete, ...) but it also expands on the research behind it.

Below is an AI-generated summary. It leaves out some interesting stuff from the book but I find it good enough to see what it's about and if you'd be interested in reading it. It's not very long so I think it's worth it.

Here are some main points from "Market Mind Games" by Denise Shull:

• The key to successful trading is understanding and managing emotions, particularly in high-pressure situations.
• Traders' emotional reactions to market events are driven by deeply ingrained neurological patterns and emotional memories from past experiences.
• The traditional approach of separating emotions from decision-making in trading is flawed because it doesn't acknowledge the essential role emotions play in decision-making.
• Instead, traders should learn to recognize and work with their emotions, using techniques like mindfulness and visualization to manage their responses to market events.
• Traders should also focus on building self-awareness and self-acceptance, so they can better understand their own emotional patterns and respond to them effectively.
• Finally, traders should strive to create a positive feedback loop between their emotional state and their performance, reinforcing positive emotional experiences and using them to build confidence and resilience in the face of future challenges.

Here are some further details and examples of the three main points from "Market Mind Games" by Denise Shull:

1. Learn to recognize and work with your emotions:

Traders should learn to recognize their emotions and their triggers, so they can manage their responses to market events more effectively. One technique for doing this is mindfulness, which involves paying attention to one's thoughts, feelings, and bodily sensations without judgment. By practicing mindfulness, traders can become more aware of their emotional patterns and learn to respond to them in a more constructive way.

Another technique for managing emotions is visualization, which involves mentally rehearsing how one wants to feel and act in different situations. For example, a trader might visualize themselves responding calmly and rationally to a sudden market downturn, rather than panicking and making impulsive trades. By rehearsing these scenarios in advance, traders can build the confidence and resilience they need to stay focused and disciplined in high-pressure situations.

2. Build self-awareness and self-acceptance:

Traders should also focus on building self-awareness and self-acceptance, so they can better understand their own emotional patterns and respond to them effectively. This involves being honest with oneself about one's strengths and weaknesses, and accepting oneself as a fallible human being who is capable of making mistakes.

One technique for building self-awareness is journaling, which involves writing down one's thoughts and feelings on a regular basis. By reflecting on one's experiences in this way, traders can gain a deeper understanding of their emotional triggers and patterns, and develop strategies for managing them more effectively.

Another technique for building self-acceptance is self-compassion, which involves treating oneself with kindness and understanding, rather than harsh self-criticism. For example, a trader who makes a costly mistake might practice self-compassion by acknowledging their feelings of regret and disappointment, but also reminding themselves that everyone makes mistakes and that they can learn from this experience.

3. Create a positive feedback loop between your emotional state and your performance:

Finally, traders should strive to create a positive feedback loop between their emotional state and their performance, reinforcing positive emotional experiences and using them to build confidence and resilience in the face of future challenges.

One way to do this is by setting achievable goals and celebrating one's successes along the way. For example, a trader might set a goal of making a certain number of profitable trades in a month, and then reward themselves with a small treat or activity when they achieve that goal. By celebrating their successes in this way, traders can build confidence and motivation, which can help them perform better in the future.

Another way to create a positive feedback loop is by cultivating a supportive network of friends, colleagues, and mentors who can provide feedback, encouragement, and advice. By surrounding themselves with positive influences, traders can stay motivated and focused, even in the face of setbacks or challenges.

Overall, the key message of "Market Mind Games" is that emotions are a crucial factor in trading success, and that traders who learn to manage their emotions effectively can gain a significant competitive advantage. By using techniques like mindfulness, visualization, self-awareness, and self-acceptance, traders can build the emotional resilience and self-confidence they need to perform at their best, even in the most challenging market conditions.

[MarkD]

A couple of books which some might find interesting.

I purchased the first one several years ago and didn't really recall it being very interesting until I began to absorb all of the TI related literaturel

The second is hard to find and not as good but it's not available anywhere on the net. Found a copy in a used book store.
Splitting-Pennies-Understanding-Joseph-Gelet

https://www.ebay.com/itm/305275659768

I stop in for a beer every couple of months about 20 miles from where I live. The author of the second book used to live nearby on a commune. Young man who is partner in the microbrewery (I don't like corporate beer) actually lives on the property which is no longer communal. He has a copy and never read the book. Thought the old guy was a bit quirky, kinda like Randy Quaid in Independence Day. But the author understood how the game is played.

[SOL]

A couple of books which some might find interesting.

I purchased the first one several years ago and didn't really recall it being very interesting until I began to absorb all of the TI related literaturel

The second is hard to find and not as good but it's not available anywhere on the net. Found a copy in a used book store.
Splitting-Pennies-Understanding-Joseph-Gelet

https://www.ebay.com/itm/305275659768

I stop in for a beer every couple of months about 20 miles from where I live. The author of the second book used to live nearby on a commune. Young man who is partner in the microbrewery (I don't like corporate beer) actually lives on the property which is no longer communal. He has a copy and never read the book. Thought the old guy was a bit quirky, kinda like Randy Quaid in Independence Day. But the author understood how the game is played.

"Thinking, Fast and Slow" by Daniel Kahneman will probably complement "Splitting Pennies" nicely. It provides a more comprehensive understanding of the psychological factors that influence financial decisions, potentially enhancing and or complimenting one's approach to investing beyond what "Splitting Pennies" offers.


Key Takeaways:
Our minds operate using two systems: fast and intuitive, slow and deliberative.
We are prone to various cognitive biases that can lead to errors in judgment and decision-making.
Understanding these biases can help us make better decisions in various aspects of life, from personal finance to public policy.
Traditional economic models of rational decision-making often fail to account for the complexities of human psychology.
Our experiences and memories of those experiences can differ significantly, influencing our overall perception of well-being and happiness.