Trading Psychology

In the stockmarket, for every trade that is buyer and a seller. In a theoretical, highly efficient market: if the seller puts in $50 into the market – the buyer would also take out $50. But we've been told a lie. Trading is a minus sum game. In reality, the seller would be really selling $45 worth and the buyer, gets $45 worth of stock. So where does the $10 ($5 + $5 on both sides) go?

I was surfing radio channels this morning when I overheard this quote from a market commentator: "...thank god for the resource boom - its masking our incompetence." As our markets are in uncertain times - Having the recent market crashes and the possibility of a recession in the United States. (I haven't been following the figures - but when are they going to call it?) [Aside: In macroeconomics, a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.] Where are we headed?

There are quite a few key articles about trading psychology and trading thought in MyShareTrading.com that may interest you to read. Some articles offer up tidbits of information that may help you cope through trading troubles, issues and problems. While some other articles point out issues in trading that you could sit and ponder about. Good luck with your trading.

• Psychology of Trading: Personality Traits

Jerome Kerviel. Rogue Trader. As this case unfolds, more and more information is being revealed. He was the quiet guy with a not-so-impressive education background. Many of his peers may have been picked from the prestigious Grandes Ecoles, the Harvards and M.I.T.'s of France, and wielded advanced degrees in math or engineering. Kerviel came to work with a business school background and started work in the bank in the back office. Can we learn a valuable lesson from this case?