"Emotion, Neuroscience and Investing: Investors as Dopamine Addicts" ...
http://www.investorsinsight.com/article.asp?id=jmotb013105
http://www.investorsinsight.com/article.asp?id=jmotb013105
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I don't agrre with any of this at all. It may have academic applications but not for trading.Roberto said:
The case of the snake in the glass is precisely why. The reasoning faculties of the human biomind are shut down by fear, or at best partially disabled. This causes the victim not to be able to act rationally or to respond logically.
I am not going to labour on this.
It brings to mind the story told by Jesse Livermore in the Reminescences of a Stock Operator, Chapter Three, and I quote:~
It takes a man a long time to learn all the lessons of all his mistakes. They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side. It took me longer to get that general principle firmly fixed in my mind than it did most of the more technical phases of the game of stock speculation.
I have heard of people who amuse themselves conducting imaginary operations in the stock market to prove with imaginary dollars how right they are. Sometimes these ghost gamblers make millions. It is very easy to be a plunger that way. It is like the old story of the man who was going to fight a duel the next day.
His second asked him, "Are you a good shot ?".
"Well", said the duellist, "I can snap the stem of a wineglass at twenty paces, " and he looked modest.
"That's all very well," said the unimpressed second, "But can you snap the stem of the wineglass while the wineglass is pointing a loaded pistol straight at your heart?".
Which brings me to another thought, and it is this:~
It is very different to be sheltered within institutional life, a financial institution, I mean, caring for the collective wealth of others, whereas it is a very different proposition to be in charge of one's own wealth.
This is not just what I say, it is the repeated comment from professionals to me who leave institutional life, to sit alone to trade their own accounts.
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