December 2009
Intermediate to advanced
208 pages
5h 33m
English
book
The Mental Strategies of Top Traders: The Psychological Determinants of Trading Success
by Ari Kiev
Content preview from The Mental Strategies of Top Traders: The Psychological Determinants of Trading Success
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.
5.1. CASE STUDY ON THE EMOTION OF DRAWDOWNS
The following dialogue with Nathan illustrates how one portfolio manager has learned to understand the balance between emotions and risk management and to take an offensive approach to profitability. Here, he demonstrates how an experienced PM can weather a market downturn and major drawdown. He shares the lessons he has learned on how to deal with cautiousness and how to develop confidence from his process as well as the struggles of other emotional underpinnings in his overall strategy.
Nathan:
We last spoke when I was through my stop levels and the market and positions forced me to take something off the table.
Kiev:
Giving up potential opportunities?
N:
It was necessary. I had to be responsible for my positions as we discussed last time; sometimes the market can stay irrational longer than you can stay solvent.
K:
The psychological tension of managing a portfolio?
N:
Correct.
K:
Did you get back in?
N:
I just reduced risk. What I had remaining in those positions made money back, and I was adding to other types of trades with the theme that if that was the bottom, then there was recovery to be had. I probably made back fifty percent of my losses, and where I am right now there is breathing room to be offensive and have an opinion on where the market is going. I am reestablishing some of those views.
K:
What has to take place for that transition to occur, where you go from being defensive to being offensive? How do you know?
N:
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access
More than 5,000 organizations count on O’Reilly
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.