The Psychology of Trading: Tools and Techniques for Minding the Markets: 158 (Wiley Trading)

This book will not only help you in trading but in life too! Must Read!

Trading in the Zone by Douglas is usually wielded out as the key book to read if you want to improve the mindset aspect of trading, but in my opinion, this book far surpasses it. I am always amazed when I read trading psychology books that they tend to tell you the type of mindset you need to be a successful trader but rarely give any practical advice in order to achieve this mindset.Well this book resolves that issue. It is packed with really interesting stories about his clients, how the mind works, and how we can relate this to trading. He addresses many key psychological issues that traders have, what we can do to address these issues and why, and the type of mindset we want to create in order to achieve success in the markets.I would really have no qualms about recommending this book for any trader out there who is struggling with their mindset, or even for good traders, who just want to enhance their performance. It is definitely worth more than one read too as there is so much good stuff packed in it.

This is by far the best book I have read in a long time. This book has not only helped me with my trading but also my life in general! For a non fiction book about quite a dull subject, I have found it very enjoyable and a good page turner.

An entry-level book for beginning or intermediate traders, the author addresses the important psychological mindset aspiring traders need to nurture. The book is especially useful to those who have already acquired some trading experience and wish to review their (under)performance to date. To do so, the author presents readers with a set of case studies form his extensive practice. Particular attention is devoted to applying findings from established and experimental psychology to traders and their environment.Traders as individuals are subject to the same emotional influences any other individual. The influences may be incitatory, i.e. inciting us to undertake action, or inhibitatory, i.e. inciting us not to do something. Our behaviour is a result of our continuous exposure to such influences and the repeated exposure thereto conditions our responses to daily life and financial market situations.Consequently, any trader wishing to improve his performance will first have to understand what type of person he is, and what investment style will be most appropriate to match his personality. This can be achieved through either consultation with expert third parties, e.g. psycho-therapists, or through self-analysis. Self-analysis can be achieved on the basis of e.g. a daily trading journal which lists transactions, market conditions at the time of each trade, the mental disposition one had at the time, the musings of the mind at the time, and the reflections underpinning the decision to enter and exit the position.The analysis enables an observant individual to identify patterns in his behaviour - i.e. discover the conditions under which he trades well and not so well. This will constitute the starting point for any subsequent "trance-formation".This transformation is an extremely intensive process. In guiding us through this process, the author bases his recommendations on an extensive literature review of his field in addition to his own anecdotal evidence and empirical analysis. It is worth noting that the author is an active (part time) trader himself and has been so for many years.Firstly, the author posits the findings that humans possess not one but two minds - a silent observing mind and a rationalising mind. The observing mind distils our personal experiences into a set of observations which are subconsciously stored in our brain and analysed for repeat patterns. Pattern recognition and associated learning thus condition us to face up to similar situations in the future. Reactions driven by this mind are often termed "gut feel" or intuition.The rational mind is in effect the slower part of the brain which tries to -well - rationalise, i.e. cogently explain the facts that the individuals have experienced. It rationalises on the basis of what it knows and thus constitutes a best guess of our conscious mind - but this is not necessarily the correct guess. And that is where trading performance starts becoming an issue, for where our brains have adopted the wrong reflex they will incite us to trade in a manner with adverse financial consequences.A successful and experienced trader has ideally had the opportunity to observe the market and register the minute events constituting market activity. Hence, traders develop a feel for the market before they are even able to cogently express what they "know" about the market. Gut instinct is thus no more than behaviour conditioned on repeated observation of what the market tells us (information) and how it tells us such (metainformation).Our conscious behaviour now reacts to the brain recognising the conditions under which it has been conditioned to trigger a certain set of responses (context). Personal traumas and experiences may have conditioned us to adopt the wrong response and thus to forego market opportunities. To prevent such from recurring, we need to recondition our mind in its reaction to our observations.For trading purposes, we need to expose ourselves to the workings of the market (paper trading, real trading, chart reading and other analysis followed by forecasting & verification sessions) and teach our brain the proper reaction by executing one's trading plan(s) under the appropriate conditions (contextual). In the process we need to become more aware of our biofeedback processes, i.e. the conditioned responses of our silent observer as expressed by physical means (e.g. hunched position, knot in the stomach, body temperature, stress awareness), as they teach us what we already know. Pairing this mind-scaping to designing backtested and proven market models will enable the mind to acquire new reaction patterns and learn new experiences.The key to success is dedication and repetition of the "positive" reactions successful traders adopt in unrelentingly stressing market conditions. Thus, the issue is not to become an emotionless trader, but a trader in control of his emotions and the context of his emotions.Those seeking to improve their performance will also learn about the power of meditation or other techniques which may assist in clearing the mind from overflowing emotions and helping prepare it for intensive observation and learning. It is, indeed, of no use to go through the effort of trying to learn new experiences if we are mentally not disposed towards such an exercise. In this respect, the author briefly dwells in the features of modern day geniuses; i.e. outperformance through dedication bordering on fervour (intensity), an ability to recharge one's mental batteries (mental peak performance) and stamina (discipline).Finally, it is worth noting that the book is sprinkled with interesting tips for traders based on the author's trading experience which encompassed (at that stage) a stint with that other master speculator, Victor Niederhoffer of "Education of a Speculator" fame.And for the purists among you - why not five stars? The author is imparting a lot of additional useful insights in his last two chapters of the book, rather than having them integrated into the main body. The last chapters are indeed a summing-up of the main reasoning followed by the author and should therefore not add any "new material". In fairness, though, I'd rather get the insights than not have them at all.

I loved Brett's approach on solution orientated therapy and the real life application thereof to effective, consistent trading. The knowledge you gain here will positively affect the rest of your life, not just your trading. Highly recommended, and applicable to all levels, buy with confidence.

Great present for my partner.

A book club I'm a member of had this book as a book of the month recently. The second trading psychology book I've read (the other being trading in the zone by Mark Douglas) I found this work to be amazing. By taking examples from his day job as a psychologist and explaining underlying causes for various behaviours and techniques for overcoming them Steenbarger illustrates many trading issues and how to overcome them. I've often heard it said that trading is 90% psychology, and having this book in your library can only be of benefit. I'm looing forward to reading his new book, already on order

I'm half way through but still waiting for him to talk about trading rather than his patients' stories totally unrelated to trading. Yes he is trying to make those links to trading but sorry it just doesn't work. I'm no shallow reader. I just don't get it. It is a good psychology book but nothing special for trading.

Copertina flessibile e stampa di qualità economica, sgranata e molte pagine storte. Editore che ricarica 50€ per un libro che sembra stampato in copisteria.Sembra che ogni libro marchiato Wiley arrivi con gli stessi problemi.

The lesson of the book is great every trader should read it

Brett clearly has an deep understanding of psychology and this level of insight can only come from decades of practice.I've experienced the highs and lows over the past two years trading full time. Faced with all the emotions that come within this territory, fear, ego, FOMO, overcautious, anxiety, impulsive trades, remaining faithful to plans during high stress situations I realized how critical an individuals psychology is to becoming consistent.I certainly didn't posses the tools or knowledge to make the changes on my own so I began looking online for some guidance and i kept coming across mentions of this book over and over again. It was perfect timing because I had gotten a taste of the market and my troublesome behavior and weaknesses were clear to me. This is why I became so engaged with what was written because I could directly relate to many of the topics discussed.Brett gets a message across like no author ever could by his various approaches to teaching lessons, such as, informative research/studies, story telling, techniques of all sorts to deal with destructive patterns and what steps can be taken to first identify them as well as the adjustments needed to ensure progress.In my opinion, this book will be most helpful for those who have had a taste of the markets and wish to make very meaningful changes to their behavior."Success in trading is related to the ability to stay consistent and plan-driven. Traders fail not because of their emotions, but because their emotions deflect them from their purpose. In developing their rules and systems, the successful traders had found a way to immunize themselves from the emotional effects of market volatility. Indeed, in many respects, the successful traders appeared to be every bit as fearful as the unsuccessful ones. It's just that the fears of the successful traders were not of those draw down or missing a market move. Rather, they feared deviating from their plans. Dedication to their purpose was the cornerstone of their success" - Brett N. Steenbarger, PhD

This is a fantastic book and anyone thinking of buying it should definitely listen to some of the points in this review.First off, this book and its insights are very well thought out. You get the sense that this author is not some hot shot. He is a down to earth human and it is easy to emphasize with him in many of his stories of emotional swings in the market.The author is able to take the psychology of trading and apply it to the real world. All too often new traders think of trading as one thing and life as another. As someone who has been on this path for awhile, things begin to merge as you find that your problems in life carry over to your problems in trading, and to be a good trader for long periods of time, you must also be good at living well in general.I have read reviews complaining about the stories and their relevance. There is a inkling of truth to these statements, but they usually come from readers who are not well experienced in the markets. This book is very subtle in its own way and many of its pearls of wisdom are not "smack you in the face" statements. This book is definitely not for those who are brand new to trading because they will not have the experience that lets them understand how the stories this author tells are relevant to his trading.So what is the use of this book if you have to already know what he is talking about to read it? Well the author definitely puts things that are already deeply understood into new context. Putting this market wisdom in new ways is always a great way to solidify your mental structure and sometimes be able to apply it outside of your previous focus.All in all, I would tell any trader that they have to have this book on their shelf, but that it is a book to be read many times, chapter by chapter, not all at once. Like Market Wizards, Disciplined trader, or Rem. of a stock operator, this book requires patience and an understanding of subtlety. You will get new insights every time you leaf through it.Concerning his last chapter and sometimes throughout the book, he is definitely on the leading edge of where trading is going. Before computers became very powerful, most good traders needed implicit knowledge and experience to trade. Now that computers have taken over quite a bit of the playing field with Quant funds and technical analysis, sometimes this old "seat of the pants" trading is called undisciplined hogwash. However, the best traders will be able to use the new psychological information about instinct, combined with the technology and discipline of systems, to become proverbial Michael Jordans of Trading. Very very interesting stuff.

Ottimo libro!