Clopinette:QuoteMore seriouslly, you are worring me guys: If we start modelling emotions to try and hedge them, we are in a BIG-BROTHER-IS-WATCHING-YOU world.At the moment there is very limited how much we can model, but your point is valid.PS: Clopinette I would love to be your BIG brother, when can we meet?

I am very flattered but it looks like (?) we don't live on the same side of the Atlantic!

QuoteOriginally posted by: sml31Determined to be successful at trading and to keep my sanity, I have spent considerable time on this trying to eradicate or alter the emotional interference that can occur using a couple of psychological techniques with reasonable success.I don't think the habits which lead to success in trading can be arrived at rationally. Because I think that people can trade well before they fully understand probability, their own goals in life, and such.That guy who shot like 5,000 free-throws in a row has said that it's not about trying to score, it's about the process (don't think about the basket, think about the mechanics, something like that). People who get the process right - the pattern of daily activities including reading, programming, chasing down statistical points of interest, getting some sleep - rather than worrying about whether a specific trade made money, will be more successful.The goal is the process. Think about what you are going to do to make money, what you are going to do on a Saturday afternoon, on a Monday morning. What is your plan for finding profitable trades? Your success each day can be measured by how well you stuck to that plan. Then if you don't make money after a year, you will know your plan for finding trades must be wrong. But if you don't do the same thing hundreds of times, you will never know if it works or not.All you can do is execute a process. Whether or not the market gives you money is not in your control. You could lose money 10,000 trades in a row.Also, I often see people making a erroneous assocation between getting emotional and losing money. 90% of the time people lose money, they had no idea what the market was going to do. Often when people have no idea what the market is going to do, they get emotional. 90% of the time they lose money, they get emotional. So while the mood occurs at the same time as the loss, the mood did not cause the loss. Just by taking Valium, or by biting your lip and clenching your fists in self control, you are not suddenly going to have revealed to you the direction of the market. You didn't sell out because you lost your nerve. You sold because you had no idea what the market was going to do!I think people who worry about controlling their emotions are wasting their time. They instead need to fill the information vacuum into which their emotions creep. If you're sitting there thinking "I have no idea whether this is going to go against me or not," you've got nothing to do but hope and fear. If you're sitting there thinking "51 times out of 100 this will go my way," then you realize that neither hope nor fear nor additional analysis is warranted, it's just a waiting game. Or, when you do get emotional, just admit you have no clue and close out all your positions. Then before you enter another trade, remember that the last time you entered a trade for the same reasons, you realized that you didn't actually have a clue.Suppose you're a "feel" trader. You say 51% of the time I get a gut hunch it's going down, it goes down. Then there's no need to stress. If you feel like it's going down, sell. If you don't sell, don't stress, just admit you don't believe your 51% number and throw it out. If you don't trust your emotions, don't beg them to change their ways like a cheating spouse. You're not required to trade on hunches and feelings. Find something else to trade on.People generally look at what they have. If you're a floor trader, you look at the paper flow. If you're an option trader, you look at your smile model. If you have neither paper nor smile, and you're sitting alone in a room, you look at your own emotions. If your emotions are the most interesting thing you have to look at, then maybe you need to subscribe to a new data vendor or something.They've actually discovered this with slot machines. The ones that take the most money are the ones positioned in a cozy, intimate setting, where people feel all the variables are within their purview. If you hang one out in the middle of a busy casino floor with high ceilings and people coming and going, slot players won't develop the hallucination that the pattern of profit is discoverable. You put them in a cozy little nook all by themselves, and they'll start thinking things like "Okay, go up $500 and go home, it's all about self control..."I think introspection is a sucker's game for gamblers and golfers. It's for people who can't tell where their own influence ends, and natural variability takes over. If you have a hot day on the golf course, and you think maybe it was your lucky pink shirt, or the fact that it was a Sunday and you play better on Sunday's, you need to get a life.

QuoteOriginally posted by: CollectorClopinette:QuoteMore seriouslly, you are worring me guys: If we start modelling emotions to try and hedge them, we are in a BIG-BROTHER-IS-WATCHING-YOU world.At the moment there is very limited how much we can model, but your point is valid.PS: Clopinette I would love to be your BIG brother, when can we meet?It's specifically because no government can afford to be big brother that communism, and emotional modeling, fail. Even if you could afford to put a camera in every cornfield and shop, who would watch all of them? And then who would watch all those watchers? What is interesting is the pattern of who watches whom, not what you can model.The error is in thinking that you could discover the inputs into the model, the output of which is a person's emotions. Your computer would have to walk in their shoes, in violation of Pauli's exclusion principle. If you aggregate it into the average of thousands of people's shoes, you add no new information in the form of a specific pattern or subset of people to watch.

QuoteDr. Henriette Prast has written several very interesting articles in wilmott mag on how emotions affect our trading, for example in the Sep 2003 issue she discusses some studies how the weather actually seems to affect how we trade, the David Hirshleifer and Tyler Shumway study looking at data over 16 years from 1982 to 1997. The findings indicating that returns are higher on sunny daysIf this argument holds then it sounds rational that markets in located in cities like Madrid Athens Cairo Tel Aviv Mexico Singapure etc should have permanently positive returns all year long!QuoteBut I do not let the weather control my emotions (too much), a good trader SHOULD TAKE CONTROL OF THE EMOTIONS (not only hide your emotions, like making a poker face). Recently I have been waking up 5 O' clock every morning, then going to the gym pumping iron for 2 hours before I go to work: trading. Heavy weight training in particular releases a lot of endorphins this make you very energized and pumped up, that again makes your brain work faster and more efficient, and agian in my view gives you an edge in trading. Other traders uses a lot of coffee, one very famous trader I met ordering a triple expresso once told me something like "How can you expect traders not drinking coffee to compete with traders high on caffeine?"If those arguments hold and there are traders who cant control their emotions weight lifting is just an option. Alternatives are boxing, wrestling, swimming, sex, and certain kinds of drugs. I am more than eager, we the Wilmotters establish a movement to convince our employers make proper gym infrastructure in the work place, swimming pool included, offer free drugs, and establish multiple business relationships with escort agencies. It is to their best interests!

Anthis"If this argument holds then it sounds rational that markets in located in cities like Madrid Athens Cairo Tel Aviv Mexico Singapure etc should have permanently positive returns all year long!"Take a closer look at the paperGood Day Sunshine: Stock Returns and the Weather, Journal of FinanceAnthisQuoteIf those arguments hold and there are traders who cant control their emotions weight lifting is just an option. Alternatives are boxing, wrestling, swimming, sex, and certain kinds of drugs. I am more than eager, we the Wilmotters establish a movement to convince our employers make proper gym infrastructure in the work place, swimming pool included, offer free drugs, and establish multiple business relationships with escort agencies. It is to their best interestsBoxing defenately helps: "Tudor Jones wound up the year with $385 million in assets—even after he had paid back to investors the $200 million he produced for them last year. A former welterweight boxing champion at the University of Virginia"..."Uses a stretch limo to get home to his wife, a model. ", more info here from Boxing to billionsMost of the other alternatives you suggest are illegal (and typically for a reason, but let us not get into a discussion about this here)....I also recommend you to keep boxing outside the office, my advice is based on personal experience I am ready for boxing when you are ready I will knock you out!

QuoteOriginally posted by: ClopinetteMore seriouslly, you are worring me guys: If we start modelling emotions to try and hedge them, we are in a BIG-BROTHER-IS-WATCHING-YOU world.I disagee. If you can 'hedge' yourself against yourself it might be very useful at some point.For example:If one has a return of 50% to over 100% of his initial gambling stake on blackjack table. He may ask to guard the profit equal to his initial gambling stake until it all over. This can go on as long as he is winning. At the end, the probability he may end up with a hole in his pocket is relatively small compare to someone who's a slave to his instincts.

QuoteOriginally posted by: farmerYour computer would have to walk in their shoes, in violation of Pauli's exclusion principle.No, that's the anthropomorphic principle. If computers could walk and wear shoes, then it doesn't matter whose shoes they borrow -- unless someone else (or another computer) were already in them, then the "lack of space" exclusion principle would apply. For Pauli's principle to apply, you would need two identical computers like me (Fermion) trying to get into the same shoes.

Emotions demand our attention so they get in the way of our thinking; but we have to give them their space. They want us to stamp our feet, punch the air, shout "hurray, hurrah, hurroo", do a back-flip, go to the gym and work out, have an orgasm. Once we've done what they need we can get back to thinking. If we don't give them what they need, then they tend to rule us and we put too much energy into holding them down so we can't think so well. Do traders need to think well to trade well? I think so; so they need to give vent to their emotions to trade well too.

2 hours every morning?? How many sets is that?

>2 hours every morning?? How many sets is that? 15 minutes warm up, 1.5 hours training, 15 minutes stretching... that is basically only 50% of the Austrian Oak used to do...so not much at all.

Fermion: QuoteEmotions demand our attention so they get in the way of our thinking; but we have to give them their space. They want us to stamp our feet, punch the air, shout "hurray, hurrah, hurroo", do a back-flip, go to the gym and work out, have an orgasm. Once we've done what they need we can get back to thinking.not many comapanies that let you do all this....at least not at work

more newsI know of a zen center in the east village.

Now I remember where I had seen that picture of Tudor Jones before...Losers Average LosersPretty obvious stuff, amazing how many "bottom fishers" get it wrong.Please note that I do not endorse or recommend the site the article comes from, in any way or form. The turtle rules have been published on other sites by some of the original turtles, and you'd probably be slaughtered in the markets if you used them these days !