cesvvuzy53
04-04-2016,
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.
�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.