This is a repost, but given the number of new players on the thread I think that it's relevant.
This is partly in response to some of the issues that Bazinga! experienced. Probably good reading for newbies or those who sometimes feel aliented by some of the blog antics. From memory, Bazinga! lost 6 figures learning to trade and is now persuing other interests.
MemeFx's DT Diary - The Psycho-Quant's Solution to Grifters and Zealots.
First let me explain my formal qualifications for attempting this topic - none.
On the DT blog there is frequent mention of how important the correct psychology is key to being a successful trader. Any trader who considers this topic more than momentarily probably agrees.
But what about Blog psychology?
What does Meme mean?
Seeing some posts towards the end of last week got me thinking that some Blog readers are having their trading psychology blown out of kilter by posts that unduly influence them. No surpise there. But how do we sort out this killer koyaanisqatsi conundrum?
First I'll try and categorise where the problems come from. Please note that not all these bloggers intentionally create problems for you.
Grifters Rampers - pretty Straight forward - so no description.
Frenemies - this is a more subtle problem. Somebody who occasionally gives you a tidbit, but in return is really expecting you to raise the share price for their benefit. You might make money sometimes due to a tip (ie they are your friend), but at other times they sell into your bid, leaving you with an dodgy position (ie they are your enemy)
Bullies - surprised that this happens here actually. Closely related to the frenemy types. Basically, these guys will beat you over the head with the good calls they've made, and point out other posters bad calls. Constant reference to how much they make. The subtext here is "I am good, you (they) are bad". Since the blog is a non-corporeal space, this isn't the physical bullying you get from boys in a playground, but closely resembles the bullying that pre-teen/teen girls engage in.
Trolls - like all blogs, these threads have trolls. Lately there has been some who try to inflict emotional grief on other traders. Like anywhere else - just don't feed the Trolls - if you do they will lose their fear of humans and become more of a nuisance.
Neutrals Traders will often talk more about their wins than losses. It's only natural to feel good and feel the need to tell the world about recent windfalls. From the emotional side though, if you are having a bad run, there is a tendency to feel that the train has left without you. Don't let it get to you. Take a deep breath and be cognizant that all traders have down times, and all traders sometimes miss trades.
Zealots There are some people on the Blog who do trade very well. Or at least give that impression - from the emotive aspects of the bystander it doesn't make any difference. They will frequently produce lists of wins and stiplulate that particular techniques are the only way to succeed. I suppose the subtext here is that it is very similar to the Neutrals, with the addition that if feels like they are not only doing better than you, but they are smarter than you as well.
Near as I can tell, I've just outlined some common, useful categories (there are probably others), and taken a punt on what effect they can have on a reader - and each reader will have a different emotional response to any given situation. But these types of posts can put you in a negative state of mind and a trader has to be positive. She doesn't have to believe that the markets will rise every day, but she has to beleive that she is competent and capable of winning. And that's where the danger lies.
How to deal with it?
Well the first thing to do is to be aware of what's happening and what effect it is having on you. You require an emotional cognisance of the situation as it occurs.
A possible way of doing this is : - go back and choose a day on which you were emotionally effected by the blog and/or made bad trading decisions for unknown/silly reasons. Should be recent so that you can rememeber your emotions on that day. - print out the blog of that day - next to each post, annotate it with the emotions and thoughts that you were feeling at the time and any trading actions that they initiated.
Do this and hopefully you should get an understanding of how you are emotionally reacting to the blog, and if nothing else, you can review which posters are worth listening to.
A lot of knee jerk emotive trading response can also be removed by having a trading strategy and sticking to it, but if you are reading the blog, you should be aware of what it's doing to you. How you turn this knowledge into a postive depends on how you are wired.
Thoughts and comments always welcome, thanks for listening,
Yours in the Struggle - MemeFx ( Psych-Quant, Quack!! )
