Session 7 - Your edgeMake this a True Human Plus Machine partnership
Agenda Be the boss! Why is it so hard for humans to make good trading decisions? How to use your trading journal Assignments for next week
Power is nothing if it’s not the power to choose. Instrumental reason can make decisions, but
there is all the difference between deciding and choosing
- Joseph Weizenbaum
Emotions
GreedFear
Trust issues in data
Personal issues (mood)
Laziness
Naive Shortsighted
Risk averse
Why is it so hard for humans to make good trading decisions?
Blame
Discipline (self-control)
EGO
System 1 (fast)
Memory
Emotions
GreedFear
Trust issues in data
Personal issues (mood)
Laziness
Naive Shortsighted
Risk averse
Why is it so hard for humans to make good trading decisions?
Blame
Discipline (self-control)
System 1 (fast)
EGO
Logic
Statistics Data
Expectancy
Strategy Plan
System 2 (slow)
Memory
Facts
System
Formula
Calculations
Framework
Emotions
GreedFear
Trust issues in data
Personal issues (mood)
Laziness
Naive Shortsighted
Risk averse
Why is it so hard for humans to make good trading decisions?
Blame
Discipline (self-control)
System 1 (fast)
EGO
Logic - DARA
Statistics Data
Expectancy
Strategy Plan
System 2 (slow)
Memory
Facts
System
Formula
Calculations
Framework
Always ON
Emotions
GreedFear
Trust issues in data
Personal issues (mood)
Laziness
Naive Shortsighted
Risk averse
Why is it so hard for humans to make good trading decisions?
Blame
Discipline (self-control)
System 1 (fast)
EGO
Statistics Data
Expectancy
Strategy Plan
System 2 (slow)
Memory
Facts
System
Formula
Calculations
Framework
Logic - DARAAlways ON
Trading Journal
• Accountancy system • Analyse what works and what does not work (make sure to have enough data
first - 100 trades for each timeframe)
Suggested Reading material Books about Trading psychology
• Mark Douglas - Trading in the Zone
Books about Trading
• Curtis Faith - Way of the Turtle
• Steve Nison - Japanese Candlestick Charting Techniques
• Andreas Clenow - Following the trend
Books about Algo trading
• Robert Carver - Systematic trading
• Andreas Clenow - Trading Evolved
Books about famous traders
• Gregory Zuckerman- The Man who solved the market
• Jack Schwager - Market Wizards books
• Roger Lowenstein - When genius failed
Books about decision making
• Daniel Kahneman - Thinking fast and slow
• Gary Kasparov - Deep Thinking
Weekly Assignments
Be the boss! Check out you trading journal (but don’t make any decisions
yet) Get 2 books from the reading list Get a public library card
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