by ilene - March 21st, 2010 8:31 pm
Do you find yourself on a performance roller coaster? This is a situation in which you make money for a while, begin to think you have it all figured out, only to fall back, lose money, and feel like a rookie all over again.
A while back, I wrote about the performance roller coaster and some of the emotional factors that sustain it. The gist of that important post was that how we process wins and losses affects our subsequent trading--and sometimes contributes to winning and losing streaks.
I just finished an enjoyable interview with Mark Wolfinger of the Options for Rookies site. One topic that came up was the way in which traders identify with their P/L. Once a trader’s sense of identity and esteem becomes caught up in profits and losses, the trader begins an emotional roller coaster simply due to the natural ups and downs of markets.
by Phil Davis - January 1st, 2010 2:42 pm
Thursday’s close was very exciting, wasn’t it?
Well it sure was for us as my 10:01 Alert to Members was a play on the DIA Jan $103 puts at .56. Thanks to the late afternoon dip, they finished the day at .90 (up 60%) after peaking out at .95, a very nice win to close off the year. That was the only Alert trade all week as this market has been too tough to call and we don’t make trades just for the hell of it. I had been sniping at DIA puts all week expecting a pay-off but Thursday it finally came together.
Of course, I also strongly advocated hedging on Thursday morning and listed 4 trade ideas in the morning post to hedge ourselves against the possibility of just such a drop so don’t say you haven’t been warned. Whether there will be follow-through on Monday or a full reversal remains to be seen and, even if I knew, I wouldn’t tell you here because this is a review – predictions are another article entirely.
We treaded very cautiously into last year because our PSW Holiday Retail Survey was not looking very pretty so it was no surprise to us, on Dec 26th, when we got some horrific retail reports. These are, of course, the same reports that we "beat" this year – but not by much. Dec 29th was Monday and Israeli jets attacked Hamas targets in the Gaza sending oil flying up to $48 a barrel. That gave us a nice commodity rally into the close of the year but January 2nd was a Friday and we decided (fortunately) to take the money and run on our long plays, holding open our main cover of SKF Jan $120s at $4.35, which hit $80 later in the month (up 1,732%) and USO Feb $32 puts at $3.40, which hit $10.50 in the Feb dip (up 208%) so, on the whole, not too differently positioned than we are now, coming into the new year. Visually 2009 looked a little like this:
January – Waiting for Obama, or Something, to Change
We began January much the same way we ended December with my Wed Jan 7th comment being: "We call it "Testy Tuesday" for a reason and our 5% rule was tested twice during the day but the market failed to…
by ilene - November 7th, 2009 9:03 pm
Turning Sunshine into Performance
Does vitamin D have anything to do with investing and stock and options trading? Maybe. Preliminary research suggests that lack of vitamin D is associated with impaired mental abilities. And this may indicate that obtaining sufficient levels of vitamin D may improve cognitive performance.
Researchers stopped short of advising more sunshine, or fruit-flavored gummy D supplements (yum!), to improve one’s cognitive function. But further research is warranted.
In addition, and perhaps most importantly, many children appear to be deficient in vitamin D (see below) so it may be worth investing in some of those gummy Ds.
Does Vitamin D Improve Brain Function?
New studies show low vitamin D levels may impair cognitive function
The push to prevent skin cancer may have come with unintended consequences—impaired brain function because of a deficiency of vitamin D…
“We know there are receptors for vitamin D throughout the central nervous system and in the hippocampus,” said Robert J. Przybelski,… “We also know vitamin D activates and deactivates enzymes in the brain and the cerebrospinal fluid that are involved in neurotransmitter synthesis and nerve growth.” In addition, animal and laboratory studies suggest vitamin D protects neurons and reduces inflammation.
Two new European studies looking at vitamin D and cognitive function have taken us one step further…
The scientists found that the lower the subjects’ vitamin D levels, the more negatively impacted was their performance on a battery of mental tests…
A second study, led by scientists at the University of Manchester in England… looked at vitamin D levels and cognitive performance in more than 3,100 men aged 40 to 79 in eight different countries across Europe. The data show that those people with lower vitamin D levels exhibited slower information-processing speed…
Although we now know that low levels of vitamin D are associated with cognitive impairment, we do not know if high or optimum levels will lessen cognitive losses. It is also unclear if giving vitamin D to those who lack it will help them regain some of these high-level functions…
Vitamin D for Quicker Thinking?
Men With Low Blood Levels of Vitamin D Fare Worse on Test Requiring Speedy Thinking
by ilene - August 22nd, 2009 11:17 pm
Performance takes energy – does your life-style pump you up with energy or drain it away?
By Brett Steenbarger at TraderFeed
I recently posted on the topics of psychological energy and life success and how we can overcome procrastination to become more productive. What is the difference between someone who persists through adversity and someone who gives up? Someone who makes that one extra trade to recover losses and someone who does not? Someone who stays alert and focused on opportunity and someone who overtrades in unfocused moments?
As Jim Loehr has pointed out, many times the difference is one of psychological and physical energy. How many times have we seen a basketball team make an attempt at a comeback, only to run out of gas late in the game and ultimately fall short? The same thing happens in the boxing ring: fatigue makes cowards and weaklings of the best fighters.
Less well appreciate are the effects of mental fatigue. We have free will only to the degree that we can direct ourselves in goal-oriented ways. When we are burned out, overwhelmed, or just plain tired, we lose that capacity for direction. We drift, rather than act with intent. Even our minds drift, rather than stay focused on goals.
It’s important to recognize that fatigue is not just something that happens to us, but also something that we actively do: we fatigue ourselves with low-yield activities, negative self-talk, and the frustration of unmet needs.