Home Know thyself

Michael J. Maobussin from "Credit Suisse First Boston" gives good advice, how to avoid frustration on the market.

Knowing yourself means understanding how you are likely to behave in different circumstances.

Over the past few decades, researchers have developed a market of a clear understanding of the psychological traps, which caught traders. The best way for you to avoid these pitfalls, is to know about them, about the
forms that they take and which ones you will most likely fall.

Here are the usual pitfalls:

Arrogance.
Researchers found that people consistently overestimate their abilities, knowledge and experience, particularly in areas outside their competence. Traders should try to objectively assess the results of their work and remain within the limits of its competence.

Self-decision-making
When making decisions, we often give disproportionate importance to the first, we received information, thus limiting our next thought. You can mitigate this risk by obtaining information from various sources, and considering various options.

Unsuitable environment
Decisions are influenced traders, as the problem itself, and a set of circumstances. The same problem, although it would be objectively equivalent, in other circumstances, ie in other circumstances, might make people take a variety of solutions. Therefore, the conditions under which to operate, also played a central role in assessing the probabilities. Traders have a tendency to take such decisions, to justify past decisions, even when circumstances have changed. To avoid this trap, traders should only take into account future costs and benefits.

Search for evidence
Traders have a tendency to seek information that would support their existing point of view and avoid information that contradicts their opinion. Speaking psychologist Teyna Pittman is as follows: "I see it when I do believe." You should also understand how you usually react to stress. People with different individual characteristics behave differently under stress. In this case, nanie himself and some of the main methods of compensation for stress are of great importance. Persson said "the main advantage player is his ability to think clearly under stress. It is very important because, as we know, the fear inherent in all people."

Forex Magazine
based on www.turtletrader.com