[F]rom a trading perspective it's very simple. There's stimulus, response, reward [or] punishment. John Porter, as quoted in Drobny:  Inside the House of Money, Page 161

I heard John Porter speak a couple of times when I was at Barcap and he came across as colourful and genuine. If I remember correctly his background is in psychology, which may help explain his framework of thought.

It seems that whatever our backgrounds may be, we try to mine our personal histories and characters for new ways of thinking about the markets. Perhaps there are just as many lessons to be learned in applying our trading knowledge to our daily life outside of the sphere of financial speculation. For example, I recently missed a return flight from Paris to London and had to catch the Eurostar [train] the next day. While I could have dwelt on this for a long time I decided to process it as no more than one of life's bad trades. By calling upon the thought process I used to employ to handle bad trades, I was able to write off the missed flight pretty quickly and enjoy the extra day of unplanned holiday. I guess these types of insights can work pretty well both ways.





Speak your mind

1 Comment so far

  1. Gangineni Dhananjhay on July 4, 2009 10:26 am

    I have found myself subconsciously applying my trading rules and experience to life events. Cutting losses early and getting rid of bad position without waiting or hesitation is one example. one small anecdotal example of my wife booked an ordinary bus ticket to see her sister. She is reluctant and wanted to go in different air conditioned bus . But the reservation clerk refused to refund any money as the bus is about to start. I immediately decided to offer 50% discount to the ticket collector of the bus who can sell it at full cost to any other passenger on the way. Thus I have traded my bad position and cut my loss same time keeping my spouse happy. I think this is one of few times she appreciated my trading skill.


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