I just spent the best part of Friday & Saturday at an FX expo. If you ever get a chance - go. From learning how fund managers think to watching how an experienced charlatan goes about conning an entire hall of people, it was fantastic (the giveaway mistake "What I'm going to do to you today... cough, I mean, do for you today...".
Tellingly, all the busiest lectures were about strategy, all the quieter ones about psychology. One of the most interesting things I came across was the research done with traders on how their emotions affect their trading outcomes and the role of intuition. There's a European-wide research project : www.xdelia.org : look up the publications and read away. A few interesting tit bits:
- those emotionally brain-damaged (eg car crash) tend to do appallingly in financial decisions
- all traders recognised the role of intuition (clearly, not quants, but you get the gist). The inexperienced ones described intuition as something intangible, mystical, whereas the best traders recognised the intuition needed to assessed together with other sources of info
- those who reckoned they were trading without emotion were simply suppressing it
- a few losses and few wins on the trot had the same negative impact; fear of trading, or overconfidence (this was something I picked up on after quanting a gazillion Oanda retail sentiment positions).
Have a butchers anyway. Well worth a read.
Tellingly, all the busiest lectures were about strategy, all the quieter ones about psychology. One of the most interesting things I came across was the research done with traders on how their emotions affect their trading outcomes and the role of intuition. There's a European-wide research project : www.xdelia.org : look up the publications and read away. A few interesting tit bits:
- those emotionally brain-damaged (eg car crash) tend to do appallingly in financial decisions
- all traders recognised the role of intuition (clearly, not quants, but you get the gist). The inexperienced ones described intuition as something intangible, mystical, whereas the best traders recognised the intuition needed to assessed together with other sources of info
- those who reckoned they were trading without emotion were simply suppressing it
- a few losses and few wins on the trot had the same negative impact; fear of trading, or overconfidence (this was something I picked up on after quanting a gazillion Oanda retail sentiment positions).
Have a butchers anyway. Well worth a read.