'Behavioural Trading. - A new name for an old blog.

I have been running this blog for some years now in various disguises. In the early days I shared my views on markets, whilst also adding occasional thoughts about Trading Psychology and Behaviour. I then started to focus more on my thoughts about trader performance and trader behaviour. I felt that there was more than enough talk and discussion about the market, about price action, about central banks; 'will they, won't they, should they, shouldn't they'. I admittedly also lapsed on my blogging, posting occasionally, about once every 2 to 4 months. I stayed active managing the Linked-in group 'Trader, Trading and Risk Psychology', which continues to grow and thrive, and at the same time, I have continued building up my business as a 'Performance Coach' working with traders. This continues to proceed, and I am delighted with the outcomes that my clients are now seeing from my work, I have shared a few examples on a recent post (Which I shamelessly plug here).

The post, which I shamelessly plugged, highlights just some of many examples where traders, who have passed through my coaching programmes, are now making significantly more money than they ever were, whilst at the same time being far happier and more content. I have now worked with many hundreds of traders over many years, first as a trader than a coach, I feel I have continued to grow and learn from them all. During this time, my views on trading psychology, trading performance and trading behaviour have transformed and taken on a very different shape. My earlier contentions about trader performance were largely shaped and coloured (or for you on the other side of the great pond 'colored') by my own experiences as a trader working inside investment banks. However my views have come along way since then, twisted and contorted by others sharing their experiences and travails with me, shaped by my own journey into Gestalt Psychology, which has opened up a whole new world, and continually polished by additional reading and learning. It is this journey which has led me to this place, and to the renaming of my blog, 'The Being of Trading'. For it is not enough to just do the right actions that lead to success in trading, rather it is to know and understand 'how you are', the 'being' of trading, both as a person and as a trader, which is where true success come from. I often use a quote made famous by Sir Edmund Hilary 'Its not the mountain we conquer, its ourselves'. That as true in his world, as it is in the world of trading, where the mountain is replaced by the  'market'.

That is what I aim to focus on with this blog from now: How one 'is' a trader, and how one applies their own personality, beliefs and attitudes to their trading. I will discuss and explore what I have learned and what I have discovered along my journey. About how engaging with risk and uncertainty requires special skills and capabilities, which everyone has within them, but which are so rarely understood and often so poorly practiced. I can not promise that I will be update this as regularly as I currently hope to, so please bear with me and be patient. - I do hope to bring some valuable insights over the months and even years ahead, which I believe will prove valuable to many people, themselves battling to succeed in the world of risk.  In the meantime please feel free to follow me on Twitter @chrysalisperfco, where I will post and re-tweet interesting articles on related themes. i also hope to turn this blog into an email newsletter. If anyone woul like to subscribe to the email newsletter, then please email me your name and email address. My contact details are at the bottom of this post. 

My first article , will ask 'Whether one can actually make money from trading on a consistent basis'. I ask this question, because this is a theme which has come up on more than one occasion with clients. Until then thank you and kind regards.

Steven Goldstein

steven.goldstein@alpharcubed.com 

Twitter @chrysalisperfco

This Blog is changing.

CHANGE OF FOCUS AND NATURE.

This blog will now focus almost exclusively on issues and matters related to Trader, Trading, Market  & Risk Psychology. I will try and post articles and items as regularly as I can on these subjects.

Readers can also join a 'Linkedin Group' I manage called, 'Trader, Trading & Risk Psychology'.The aim of the group is to be a forum for thoughts, reflections, opinions, views, and discussions on matters related to trader/investor psychology. – Including:

• Trader & Market Psychology.

• Trader Performance & Development.

• Behavioural Finance.

• The Psychology of Risk.

• The Psychology behind Technical Analysis.

And other related topics.

Hit the Linked-in image on the right hand side of this page to go to the group, or go to link : http://www.linkedin.com/groups/Trader-Trading-Risk-Psychology-3863963?mostPopular=&gid=3863963

Then hit 'Join Group' to become a member.

Warm regards

Steve

SP500 runaway train, EURUSD faces Sov Debt worries, Trader Psychology and the best Technical Analyst,

The SP500 continues to surge it has the full force of the Fed, and the market trend behind it right now. I don't much care at this moment whether it is overvalued or undervalued, whether its behaviour is rationale or irrational, right now it is a runaway train: If you are not already on the train, then it ain't gonna be easy to catch, however I'd rather be on it than standing in the way right now.

The big event today of course is Non-Farm payrolls, this either has the ability to accelerate the speed of that train, or to slow it down slightly, but I doubt on its own its gonna stop it. Also I am keeping half an eye on the European Sovereign Debt issue, this is bubbling under again, particularly in relation to Ireland, much like it was in April this year. Already this morning the EUR is well off yesterday's highs, I can not rule out the possibility that the EURUSD slips back to last week's lows, or even lower. It may even be possible that the high for this move is in for now with regard to the EURUSD at least. The chart below shows the EURUSD with 2 day candles, note how the RSI and MACD are showing very strong Bearish Divergence, in a similar way to the early 2008 peak and late 2009 peaks. Finally I have re-posted the EURUSD chart I produced a couple of weeks ago (See lower chart), back then I hinted that price action suggested an extended consolidation is possible, this seems to fit in with a failure in the Euro in the low to mid-1.4000s and further consolidation in the the upper 1.3000s to low 1.4000s..  

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Some more on trader psychology: I was recently writing an article for someone on the characteristics and traits of successful traders. One of the major traits all successful traders have is their ability to think independently and when necessary stand back from the crowd. - I used an example from my younger trading days working at an Investment Bank in the City to emphasise this.

It occurred at the start of the 1994 bond bear market. - Bonds had soared over the previous 12 months, I was part of a trading group of 12 traders. Early in that year all the talk had been about further Federal Reserve rate cuts. - Bolstered by a strong trend, and a favourable economic scenario, all the traders loaded up on the same position (long of bonds) to take advantage of the suspected rate cut. - I had a slightly different view, I was somewhat anxious about the state of the market; furthermore our ‘Technical Analyst’ was  recommending a short position; her view was that the market was dangerously overbought and ripe for a (severe) correction,and possibly a full trend change. Most the traders were, like me, fairly young and relatively new to the game, most of them had jumped on this trade largely because the two most senior traders were on the trade. - Close to the end of pre-meeting day, I had actually wanted to go the other way, but found myself compromised, however I cut my long position and went flat.

As expected the Fed cut rates by 50 basis point that night, however after a momentary jump in bonds, the market turned around and started dropping and just continued to drop, by the end of the next day bond prices had made a serious and dramatic turn lower. Although the Fed had cut as expected, they also indicated that the economic cycle may be turning and that this could be the last rate cut. Some traders cut quickly, but most hung on in the hope that this would turn, eventually suffering heavy losses and being forced to cut.

This highlights the danger of a lack of independent thinking. Some of the younger traders learnt a harsh but valuable lesson from this, those that heeded this lesson went on to become highly successful traders.

For the record the Technical Analyst at the bank at the time was Carol Harmer. She was the best tech analyst I have had the pleasure to work with. She still provides daily technical analysis for intraday traders across a wide spectrum of markets from her base in Gibraltar. - Her link is Charmer Charts which can be seen by clicking here. - She offers potential new customers a free trial of her service, I would recommend giving her service a try.


On that note, I will bid you a good weekend. However before I go, 'Something for the Weekend' :  In honour of US equity markets- Soul Asylum and 'Runaway Train'.




Have a great weekend.