Weird Psychological Quirks That May Be Affecting Your Trading

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6 Trading Psychology Books to Improve Market Strategies

Market Psychology Books Can Improve Your Trading Strategies

Trading is as much about psychology as it is about developing a solid strategy. Without the mental fortitude to stick to a plan, the most well-conceived strategy in the world won’t do you any good. Successful traders not only develop and master a strategy, but they also take become more familiar with their own psychological traits (such as discipline and patience) and cultivate them, which allows them to be more effective in implementing their strategies.

A variety of books can help traders take steps towards understanding psychology from an investment perspective.

Trading in the Zone

Written by Mark Douglas, this is a must-read for anyone who is struggling to attain consistency in the market. The author provides a roadmap for overcoming many trading issues.

While this is a book about trading, the author does not provide strategies.

This book includes addressing personal inclinations to seek short-cuts, being easily swayed by fear or greed, and getting distracted. These traits often cause traders to act irrationally even when they know better. In simple language, the book explains why and how these issues occur, and how to approach them to keep them from happening.

If you’d like to learn about the psychology of trading, you should first work to understand trading practices, techniques, and lingo before reading this book, so you can fully grasp the topics covered.

“The Disciplined Trader” is another popular trading psychology book by the same author.

Reminiscences of a Stock Operator

Even classic books can maintain their relevance over several generations. First published in 1923, this book by Edwin Lefevre is based on legendary trader Jesse Livermore. Combining rich storytelling with a deep insight into what it takes to trade successfully (and actions that can ruin a trader), the material can be read over and over again, offering new or different insights each time as you build familiarity with the subjects.

If you are an experienced trader already seeing positive results, not trading well, or just starting your trading journey, this book has something for you. In it, you’ll follow the trading career of a life-long trader, whose experiences might just be the insight you need to help you through the struggles you are facing, or have yet to encounter.

Sway: The Irresistible Pull of Irrational Behaviour

Written by Ori and Rom Brafman, “Sway” is a rare page-turner in the non-fiction genre.

In the book, the authors tackle problems many traders are aware of yet seem powerless to prevent. They include why it can be so hard to get out of a losing trade—even delving into why people stay in personal relationships, relating it to the trials of trading.

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The book explores issues of which traders are often unaware. The authors examine how danger and risk affect the decision-making process and their relevance in facing the risks of the financial markets.

The material also addresses such concepts as diagnostic bias—an inability to see beyond an initial hypothesis despite evidence to the contrary, and the chameleon effect—a person’s habit of taking on traits that are assigned to them. All of these psychological quirks can have a substantial effect on traders.

The research and anecdotes in this book can also teach the reader about hidden motivators that drive decision making, which in turn may help them make more informed decisions as a trader.

Trading Tutorials – Trading Psychology Articles

Trading is about 90% psychology. These trading psychology articles are focused on working on your mind so you can properly apply your trading plan.

Trading Psychology Articles

9 Ways to Improve Results Through Trading Psychology – Trading psychology plays a bigger role in our results than most new traders realize. Here are 9 ways psychology may be negatively affecting your trading, and what to do to fix it.

My Biggest Trading Mistakes and How to Manage Them – My biggest trading mistakes have included letting losses run, not taking profits, hesitating on good trade setups, and being over-eager to trade (overtrading). Here’s how I manage these issues. Hopefully, my experiences will help you as well.

5 Beliefs You Must Accept to Improve Day Trading Performance – Day Trading is largely psychological. We look at how your beliefs shape your perceptions (what you see on the chart) and what beliefs you must accept to see the market clearly.

10 Reasons Traders Lose Discipline – Here is a list of the top ten reasons for losing discipline while trading, with comments and suggestions on each.

Defining Factor Makes or Breaks Traders: The Trading Losing Streak – No one likes to talk about losing, but it happens. It is how you deal with it when it happens that will determine you success.

Risk Spikes – Risk Management Mistakes that Ruin Traders – Risk spikes are risk management mistakes that ruin traders quicker than any other mistake. Here’s what it is, why it WILL happen, and how to deal with it.

Trading Psychology – The Problem of “Trading Not to Lose” – Trading not to lose is an issue almost every trader will face at some point in their day trading career, and it causes major problems. Here’s what it is, why it’s problematic and how to get yourself into an opportunity seeking mindset.

Trading Psychology – Dealing with Loss Aversion – Loss aversion is the when losses are held longer than they should because we hope the price will come back in our favor. It can cause big problems. Here’s more on what loss aversion is, what causes it and how to manage and conquer it.

Self Control in Day Trading: The Biological Factors – Psychological factors are not the only possible explanations for a lack of day trading self-control. Biological factors may also play a role.

Mark Douglas Interview – Mind Over Market Video (55 mins) – Interview with Mark Douglas, trader and author of The Disciplined Trader and Trading in the Zone. His books are definitely worth the read, and this video discusses some of the topics from those books.

Trading Mindset-Your Purpose for Trading Affects Your Results – Finding your purpose, so that trading isn’t just about money…because if it is then it can be as empty as any other career. The mindset discussed in this article is about more than trading, it’s about life.

Overcoming Trading Anxiety By Understanding the Causes and Process of Anxiety – There are only 2 causes of anxiety. And one can be used to control the other. Then, there are three ways to deal with anxiety–2 of which are destructive, and one which is the way out.

Find the Right Trading Mindset – Dependent or Independent – To become a true trader–and not someone who is reliant on someone else for signals or trade ideas–you need to take what help you can get from others, but ultimately forge your own path. Here’s how.

Trading Psychology Quirks – Availability Bias – A common human tendency, where we simply draw on how many examples of something we can think of instead of studying the facts. It can greatly affect trading…here is why, and how to manage it.

Trading Psychology – The 4 Stages of Trader Development – Four very broad stages you will go through as a traders; by understanding the stages you may be able to accelerate your progress and avoid common pitfalls.

Books that Have Had the Greatest Impact on My Life and Trading – Books that I have found of great help in getting mainly in trading psychology under control. Most of these are trading books, but have had an indirect impact.

Video on Trading, Risk, Probabilities and Trade Management – Great video webinar on assessing risk and understanding how trade probabilities play out.

Why Buddhism Can Be A Trader’s Greatest Teacher – Finding a trading system is only the first step in trading success. Learn to foster self-awareness and emotional control through Buddhist teachings.

25 Psychological Tricks That Really Do Work

by Sameen February 28, 2020, 10:00 am

Today, we’re going to share with you some pretty cool and useful psychological tricks that really do work. But before we go there, know that we at List25 don’t condone manipulating people to get your way. With that said, there are some psychological tricks you should be aware of because they might help you get what you want. Also, other people might try using these psychology tricks to get what THEY want so you should try to recognize these tricks. (This is pretty much the definition of advertisement/marketing.) These are 25 psychological tricks that really do work.

Last Updated on January 1, 2020


Our first psychology trick is all about gifts. Numerous studies have shown that offering someone even the smallest gift can radically change their disposition towards you. It’s one of the easiest psychology tricks to get someone to like you.

Passive voice

When you don’t want to be confrontational but want to get your message across, passive voice is your friend. Instead of, “You didn’t send me the spreadsheet,” try “The spreadsheet wasn’t sent.”

The 10 minute psychology trick

If you don’t feel motivation to do something, just do it for 10 minutes. Even if you don’t keep doing it for longer, 10 minutes is better than 0.


If you act like you know what you’re doing, people tend to believe you. While we wouldn’t ever suggest doing something illegal, this can certainly get you out of some tough spots.

Fear of loss

People are afraid of losing things. This is why “Only 2 seats left!” works when buying bus tickets. Or why sales don’t just go on forever. While this trick can be useful for motivating people, it can also be useful to prevent people from motivating you.

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Brain Games: 4 Psychological Quirks You Didn’t Know You Knew

Your brain may be mostly formed by age 25, but that doesn’t mean some weird stuff can’t happen all along the way. motoshi ohmori, CC BY 2.0

The brain may stop developing once we hit 25, but that doesn’t mean it can’t still surprise us. Each day, a weird, swirling, jumble of sensations and data comes whizzing past us. And our brain, being the adroit computer it is, handles all of it rather gracefully. But psychologists have come to learn many curious facts about how the hunk of gray tissue works.

Much of the psychological quirks we encounter on an everyday basis, even if we don’t know them, are products of temporary neuroplasticity. This, of course, is a fancy way of saying the brain adapts. The broad stroke details are mostly set — your level of intelligence, your preferences, how you speak, to name only a few. But the finer points tend to be more negotiable. Here are several deals our psychology makes on a regular basis.

4. The Mozart Effect

Our ability to concentrate, we tend to notice, is affected by the ambient noise that fills our environment. The catchy choruses of pop music burrow into our brains, disturbing concentration, while the delicate lilt of classical music immerses us in focus. It’s a casual observation, but an important one, and something that researchers have come to classify as the Mozart Effect.

A 1993 study first described the effect. Students that were played one of Mozart’s sonatas performed better on a 15-minute test than the students who heard verbal relaxation instructions or silence. In the years since the original study, countless other scientists have discovered a similar effect (albeit one unspecific to Mozart’s music). The latest research questions the effect of prolonged classical music exposure on children, and whether their developing brains absorb the effect in the long-run.

3. Phantom Limbs

For most people, the enduring sensation that an amputated limb is still attached is a foreign one. But the brain has lower standards than total amputation for it to forget, or rather, falsely believe, that a limb is in the proper place. Psychologically speaking, phantom limbs are a product of the brain’s continual rewiring in the face of new information.

A popular experiment that demonstrates this quick-change behavior involves a rubber hand and a hammer. Have a look for yourself:

The reason this effect is so dramatic is that as each hand is brushed simultaneously, the brain begins to pair the sensations as if both limbs were real. Scientists believe the neurological basis for this lies in how the body is mapped on the brain. The same neural network that houses your real limbs begins to govern false ones, too.

2. Highway Hypnosis

Endless roads stretching into the horizon are perfect specimens to understand highway hypnosis. But the familiar route you take each morning works just as well. Picture it: Each turn, each stoplight, each piece of scenery you pass on the way — they’re so entrenched in both your working and episodic memory (the ones that handle facts and experiences, respectively) you could get there in your sleep. It’s mindless.

But as you pull into the parking lot, or check the mile marker on your highway trek, you realize you have no recollection of the drive you just took. The slate is blank. What happened?

Highway hypnosis is an example of automaticity in cognitive psychology. Basically, your brain has gotten so good at driving (or whatever tasks you do day-in and day-out), it presses pause on the tape recorder. You’ve become so habituated to a certain task, the low-level functions and awareness normally required for it begin to fade.

Highway hypnosis is great for multitasking, but also the reason texting and driving is so dangerous: The second a disruption occurs, those low-level functions you spared now snap back. And not always in time.

1. The Tetris Effect

Habituation and adaptation underpin much of psychology. Basically, the brain is moved from its normal circumstances to a condition in which it’s confronted with strange stimuli that temporarily rewire its basic functions. Let the Tetris Effect explain.

The game itself is irrelevant — psychology just likes to give phenomena intriguing nicknames. When you play something for long enough, be it Tetris, chess, music, or any other patterned activity, the orientation of your entire world begins to fit those patterns. Suddenly you’re mentally organizing cereal boxes in the supermarket, or rearranging bricks.

“I stayed ‘for a week’ with a friend in Tokyo, and Tetris enslaved my brain. At night, geometric shapes fell in the darkness as I lay on loaned tatami floor space,” wrote Wired journalist Jeffrey Goldsmith in 1991, first describing the Tetris effect.

Goldsmith’s experience wasn’t unique, he found out. In the same year, Dr. Richard Haier, of the University of California Irvine, recruited subjects to play Tetris while their brains were scanned. Haier and his colleagues found a spike in cerebral glucose metabolic rates (GMR). The “high” Goldsmith found in Tetris was really his GMR on overdrive. His brain had set Tetris as the new normal. May he only see straight pieces.

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