Articles on Trading Psychology by Dr. Brett N. Steenbarger


If you are an intra-day trader you got to read each of his articles minimum 10 times.... definetly it wont be a waste of effort...

Thanx again........Great stuff!!!!


Active Member
An excellent article I have come across on perception of the markets.

Well what is your perception of the markets? Well for all it is different we perceive things in a different way. I often think of the markets as the sea. It moves with power sometimes and other times it is calm. It drifts through time and moves in a rhythm. We all in a way try to get in rhythm with the markets. We stand on the shore and watch the waves moving ever some gracefully in and out up and down. Some times when you stand on the beach and have your toes in the water you can feel the power. Do we move head on into the waves or do we try to swim out and then put our backs to the wave and ride it? Often when we get out of sync with the market we get frustrated and try even harder. Often this compounds the problems and our account feels the heat.

The sea cannot be predicted as the same for the markets. Face it the markets move in a random fashion and even the best set-ups fail and do things you least expect. Probabilities are what we look at before jumping in the water. How far is it across this logon? Many people have drowned because they miss calculated the distance from one point to another in a sense it happens every day in the market. We try to access the information at hand and formulate a plan and enter into the water and attempt to get in sync with the rhythm of the market. Part of this plan is to minimize losses through using stop orders to prevent us from becoming drowned from the sea.

A stock moving in a nice wave is likely to continue this wave until the wave has no more energy. Many people try to fight the wave and end up out of rhythm and can’t figure out why they loss. Others get on the wave and emotions or perceptions tell them to get off and the wave just started and they would yield huge profits had they rode the wave.

In a sense we all are the captains of our ship with the same maps. We all navigate across the sea with guided precision. We try to avoid the rocks and choppy waters. We all have a different boat and some are larger then others and some have more advanced navigational equipment. The sea could shallow a large ship just the same as a small one. It does not care. One thing is the same for all and that is the map. The chart tells one where the stock has been and based off this we attempt to determine where it is going.
Is the past a preview of the future? Well no guarantees here remember the market is random and it does what it does. It flows in and out and you’re either on the shore waiting or your on the wave or your fighting the wave.

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