Psychology of Trading is a compilation of articles on trading psychology published in Stocks, Futures and Options Magazine. The articles are written by many popular traders, psychologists and trading coaches. The book is broken down into different sections on how emotions and external issues can impact your trading and what you can do to overcome your mental barriers.
Trading and Psychology
Psychology of Trading contains 28 articles that all relate to psychology and how it affects trading in commodities, futures and stocks. There are some excellent articles written by popular trader / authors like Brett Steenbarger, Van Tharp, John Carter and Linda Bradford Raschke. Many of the authors trade for a living and are well versed in the psychological issues that traders face. Other authors are practicing psychologists that coach traders on the mental aspect of trading.
Anyone who has traded for a number of years knows the struggles traders face dealing with the cruel games your mind can play on your trading. You may not discover or even realize these issues until your account takes a seriuos hit. It is always refreshing to read articles on this topic and realize many others have experienced similar issues.
It is not a matter of whether you have any issues that hinder your trading performance, because we all do. It is more important that you are able to realize and hopefully resolve those issues.
Issues Addressed in the Book?
Time issues: Do you devote too little or too much time to your trading? Often, your mind will work better and your trading will improve if you work 8-hour days instead of 16.
Trading Plan: Do you stick with your trading plan or do you regularly deviate from it? The articles cover many ways in which traders don’t have a plan or they find ways to screw up a good one.
Behavioral Finance: This subject matter is very informative on how group dynamics translates into market movements. It takes into account the macro view of investors and I have to admit Section III was a bit dry.
These are just a few of the issues addressed in the book.
A Good Read on Trading Psychology
Psychology of Trading does give you many viewpoints to learn from and the book is entertaining at times. It is certainly a worthwhile read. Many of the authors in the book have written their own book on trading psychology, so you might use this book to find an author you like and read further on the topic.
