|
|
|
|
|
|
|
The less experienced investor adopts scared thinking and asks, "Who knows how far down it can go? How can I trust when it is safe to jump in without risking buying too early?" |
|
|
|
|
|
|
|
|
While the professional says, "I follow this stock closely. I know everything there is to know about its performance. I know it has hit a good price. Time to buy it, no matter what the scared money is doing." |
|
|
|
|
|
|
|
|
Online trading is a double-edged sword. Real-time quotes, news web sites, CNBC talking heads, chat room message boards, and real-time stock sites feeding us up-to-the-minute analysis and commentaryall provide what we need to trade effectively. |
|
|
|
|
|
|
|
|
Yet, this same nowness of data also makes for more anxiety, fear, and potential negative thinking when things turn against us. |
|
|
|
|
|
|
|
|
Even when it's smooth sailing and the market is doing well, the advantage offered by everything being real time makes for a quality of immediacy and urgency that can be disconcerting. This immediacy can be exciting and keeps us on the edge. But it may just as easily turn into anxiety if we fall off that edge and feel only urgency. |
|
|
|
|
|
|
|
|
Stepping into the Trading Room |
|
|
|
|
|
|
|
|
For a period of months, I periodically spent a number of hours per day in a day trading firm for individual traders. My interest was strictly to learn something about the scene. |
|
|
|
|
|
|
|
|
I didn't go in thinking I would open an account and become a day trader. And, it didn't take long before realizing that the scene was just too frantic and risky for me. So, it was with my psychologist's hat on that I entered the trading floor, not a trader's hat. |
|
|
|
|
|
|
|
|
I hoped to get a sense of what kind of people became traders and how they approached their work. I also wanted to learn about how the superfast hardware and software worked, including Level II quotes. I needed to learn "trader speak," the lingo of the profession. And, lastly, I wanted to find out what personality traits might typify various traders who I would observe and chat with. |
|
|
|
|
|
|
|
|
I noticed that even when traders were doing well with their trades, the market was moving, and they had plenty of momentum to trade on, I rarely got the sense they were enjoying the action. Instead, many seemed anxious, tense, and unable to sit still in front of their computers. They had nervous habits, like biting their |
|
|
|
|
|