Trading lessons from Alcoholics Anonymous

sh50 · #1 13th October 2004, 09:15 PM

These are interesting extracts from Financial Trading by Alexander Elder who is a psychiatrist cum trader:-

“There is a stark parallel between an alcoholic and a trader whose account is being demolished by losses. He or she keeps changing trading tactics, acting like an alcoholic who tries to solve the problem by switching from hard liquor to beer. A loser denies that he has lost his or her course in the markets just as alcoholic denies that alcohol rules his life. "

Loss to a loser is what alcohol is to an alcoholic. A small loss is like a single drink. A big loss is like a bender. A series of losses is like an alcoholic binge. A loser keeps switching from different markets, gurus and trading systems. The loser’s equity shrinks while he or she is trying to recreate the pleasurable sensation of winning. Alcoholism is a curable disease- so is losing. Losers can change if they start using the principles of Alcoholics Anonymous. "

"Just like an alcoholic proceeds from social drinking to drunkenness, losers take bigger and bigger risks-they cross the line between business risk and gambling."

"A drunk wins once in a while thanks to luck but a sober person is the one to bet on. "

This was quite an interesting analogy. The remedy suggested was that one should define one’s business losses clearly and keep proper records of trades. Just as past alcoholics still referred to themselves as alcoholics to not resume drinking there could be something called a losers anonymous instead of a traders anonymous. The negative connotation would be a constant reminder to what could happen if one’s impulses and instincts got out of control.

Traderji · #2 14th October 2004, 08:32 AM

Quote:

Originally Posted by sh50

These are interesting extracts from Financial Trading by Alexander Elder who is a psychiatrist cum trader:-

One of my favourite authors. He has a great style of writing esp. in Trading for a Living.

mukeshsingh · #3 30th July 2005, 02:09 AM

Hello Sir
Once Again It's Very Nice To Read Ur Letter Your Writing Style Is Very Attracting....................
Regards

Mukeshsingh

Saint · #4 13th September 2005, 10:15 PM

Quote:

Originally Posted by sh50

These are interesting extracts from Financial Trading by Alexander Elder who is a psychiatrist *** trader:-

“There is a stark parallel between an alcoholic and a trader whose account is being demolished by losses. He or she keeps changing trading tactics, acting like an alcoholic who tries to solve the problem by switching from hard liquor to beer. A loser denies that he has lost his or her course in the markets just as alcoholic denies that alcohol rules his life. "

Loss to a loser is what alcohol is to an alcoholic. A small loss is like a single drink. A big loss is like a bender. A series of losses is like an alcoholic binge. A loser keeps switching from different markets, gurus and trading systems. The loser’s equity shrinks while he or she is trying to recreate the pleasurable sensation of winning. Alcoholism is a curable disease- so is losing. Losers can change if they start using the principles of Alcoholics Anonymous. "

"Just like an alcoholic proceeds from social drinking to drunkenness, losers take bigger and bigger risks-they cross the line between business risk and gambling."

"A drunk wins once in a while thanks to luck but a sober person is the one to bet on. "

This was quite an interesting analogy. The remedy suggested was that one should define one’s business losses clearly and keep proper records of trades. Just as past alcoholics still referred to themselves as alcoholics to not resume drinking there could be something called a losers anonymous instead of a traders anonymous. The negative connotation would be a constant reminder to what could happen if one’s impulses and instincts got out of control.

Nice article by sh50.........it's sad that he's not around these days!!

joy_mitali · #5 9th January 2006, 03:03 PM

HEllo sh50,
Its really sad,---You have so venomously attacked the alchoholics---U r sure to get a lot of curse from this community--
After all---Alcoholics r dreamers---And the true traders r dreamers too---
And all great creations have come from those who have dared to dream in life ---
Its just that ---one needs to generate the passions of an alcoholic----in the field of trading where by the initial loosses r offset with time---and then a new world of a dreamer slowly takes the shape---
Regards,
joy_mitali

sh50 · #6 13th January 2006, 04:03 AM

I am not attacking anybody. I am juct citing their example and how it can improve trading. I am pretty fond of my drink. It gives me as much joy as you, joy. Thanks for the remark, saint. Nice to be missed. I can drink on that.

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