Anthony Casa's Profile

What I pointed out, however, was that she was no longer a "lazy" person who procrastinated and did mediocre work when she pursued something that was meaningful to her. As a student in a math class, she struggles to get work done; the work doesn't speak to her. But acting and modeling? She's never missed a class or assignment.

Everything we do in life--our work, recreation, relationships--is a mirror. It reflects an image of ourselves back to us. If we're doing the wrong things in life, the mirror reflects a distorted image. Over time, we begin to mistake that image for reality. We really do think of ourselves as lazy or incompetent.

So much of pattern recognition simply boils down to seeing many variations on particular patterns. With enough exposure, you can learn to identify patterns relatively quickly in the market day, giving you the framework to either trade market moves or fade them.
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Myth #1: Emotions are at the root of trading problems. Yes, emotions can interfere with concentration and performance, but that doesn’t mean that they are a primary cause. Indeed, emotional distress is as often the result of poor trading as the cause. When traders fail to manage risk properly, trading size that is too large for their accounts, they invite outsized emotional responses to their swings in P/L. Similarly, when traders trade untested patterns that possess no objective edge in the marketplace, they are going to lose money over time and experience an understandable degree of emotional frustration. I know many successful traders who are fiercely competitive and highly emotional. I also know many successful traders who are highly analytical and not at all emotional. Trading is a performance field, no less than athletics or the performing arts. Success is a function of talents (inborn abilities) and skills (acquired competencies). No amount of emotional self-control can turn a person into a successful musician, football player, or trader. Once individuals possess the requisite talents and skills for success, however, then psychological factors become important. Psychology dictates how consistent you are with the skills and talents you have; it cannot replace those skills and talents.

Across the many traders I’ve met in various settings, from home-based, independent traders to professional ones in firms, the best predictors of trading success have been the size of the trader’s account and the resources available to the trader

There is far more to trading psychology, however, than simply taming emotions. The idea that emotions are the root of trading problems--and that successful traders eliminate their emotions--is one of the great myths in the field. Indeed, research in cognitive neuroscience--particularly the work pioneered by Antonio Damasio--suggests that emotion is absolutely crucial in decision making.

Thanks for the comment, David. It's interesting to see how traders can become wedded to opinions, blinding them to a sensitivity to what's actually happening in the market: A malady I've encountered a few times in my career! Coordinating our explicit knowledge of probabilities with our implicit reading of patterns is a major challenge for traders.

The important ingredient in success is not emotional dampening per se, but the enhancement of concentration and focus. That is what enables people to act with sustained purpose and stay rooted in their goals.

The goal of trading psychology is to build consciousness, not reduce emotion. The goal is to create regular access to the flow state of heightened learning and focus. Talking to a trading coach, in itself, won't accomplish that; nor will well-intentioned efforts to calm oneself or take breaks from trading.