Risk is felt, it’s not something that can be quantified despite the failed attempts of many. 2/9
Short thread on emotions in trading
A common meme is that the best traders are the least emotional. I’m calling BS on this.
I’ve analysed the Psychological make-up of many brilliant traders over many years using psychometrics. And whilst this isn’t scientific research.
1/9
Risk is felt, it’s not something that can be quantified despite the failed attempts of many. 2/9
The fact that they don’t suppress their emotions aids this process.
They use their emotions as
3/9
Feeling their emotions & being aware of them enables them to identify opportunities & threats with great haste, giving them an edge over ‘less emotional’ types who are not able to
4/9
By contracts the less emotional types can tend to be overconfident & don’t always see (because they don’t feel) the degree of risk or threat in situations.
I am not saying emotional or unemotional is superior. Both types can and do succeed.
5/9
What matters is congruence: There are certain 6/9
For emotional types, I ‘tend’ to find that the shorter-term/faster the style or signal, the better it is.
7/9
Again this creative ‘edge’, which isn’t necessarily unique to, but seems to tend towards, emotional types, can be highly valuable to designing systems or new methods.
8/9