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Trading Psychology 2.0: From Best Practices to Best Processes

Book Description

Practical trading psychology insight that can be put to work today

Trading Psychology 2.0 is a comprehensive guide to applying the science of psychology to the art of trading. Veteran trading psychologist and bestselling author Brett Steenbarger offers critical advice and proven techniques to help interested traders better understand the markets, with practical takeaways that can be implemented immediately. Academic research is presented in an accessible, understandable, engaging way that makes it relevant for practical traders, and examples, illustrations, and case studies bring the ideas and techniques to life. Interactive features keep readers engaged and involved, including a blog offering ever-expanding content, and a Twitter feed for quick tips. Contributions from market bloggers, authors, and experts bring fresh perspectives to the topic, and Steenbarger draws upon his own experience in psychology and statistical modeling as an active trader to offer insight into the practical aspect of trading psychology.

Trading psychology is one of the few topics that are equally relevant to day traders and active investors, market makers and portfolio managers, and traders in different markets around the globe. Many firms hire trading coaches, but this book provides a coach in print, accessible 24/7 no matter what the market is doing.

  • Understand the research at the core of trading psychology

  • Examine the ways in which psychology is applied in real-world trading

  • Implement practical tips immediately to see first-hand results

  • Gain the perspective and insight of veteran traders who apply these techniques daily

  • While markets may differ in scale, scope, and activity, humans remain human, with all the inherent behavioral tendencies. Studying the market from the human perspective gives traders insight into how human behavior drives market behavior. Trading Psychology 2.0 gives traders an edge, with expert guidance and practical advice.

    Table of Contents

    1. Title Page
    2. Copyright
    3. Epigraph
    4. Preface
    5. Introduction
    6. Prelude
    7. Chapter 1: Best Process #1: Adapting to Change
      1. Emil's Restaurant
      2. The Single Greatest Barrier to Adaptation
      3. The Power of Flexible Commitment
      4. Flexibility and Trading
      5. The Rebuilding of Maxwell
      6. The Perils of (Over)Confidence
      7. Tapping Core Motivations
      8. Why Discipline Doesn't Work
      9. The Purpose of Purpose
      10. Turning Adaptation into a Routine
      11. The Limits of Trader Discipline
      12. The Emotionally Intelligent Trader
      13. Readiness for Change
      14. Self-Assessment Exercise
      15. Tapping the Sense of Urgency
      16. See-Feel-Change: The Importance of Optimism
      17. The Dangers of Trader Isolation
      18. Changing the Internal Dialogue
      19. The Perils of Perfectionism
      20. Relapse
      21. Summing Up: Moving from Contemplation to Action
      22. Taking and Sustaining Action: Identifying Opportunity
      23. Self-Assessment Exercise
      24. Taking and Sustaining Action: Identifying Threats
      25. Where to Look for Fresh Directions
    8. Chapter 2: Best Process #2: Building on Strengths
      1. The Trader in a Slump
      2. Why Strengths Are Key to Performance
      3. Finding Strengths in the Smallest Places
      4. What Are Your Strengths?
      5. Self-Assessment Exercise
      6. How Strengths Interact to Create Successful Experience
      7. What Strengths Don't You Possess?
      8. Can Your Strengths Also Be Weaknesses?
      9. Making Our Strengths Stronger
      10. The Excellence Principle
      11. Making a Habit of Developing the Right Habits
      12. A Look at Character Strengths
      13. Higher-Order Integration of Strengths
      14. Revisiting Multiplier Effects in Development
      15. Subjective Well-Being: The Most Important Emotions in Trading Psychology
      16. Self-Assessment Exercise
      17. Well-Being and Personality
      18. What Research Teaches Us about Well-Being
      19. How Can We Cultivate Well-Being?
      20. Eliminating Drains on Our Energy
      21. Conscientiousness: The Underappreciated Ingredient of Success
      22. Biofeedback as a Strategy for Enhancing Well-Being
      23. Using Meditation to Build Positivity
      24. Using Self-Hypnosis to Feed Positivity
      25. A Workout for Mind and Body
      26. Special Topics in Well-Being: Love
      27. Special Topics in Well-Being: Affinity Groups
      28. Special Topics in Well-Being: Gratitude
      29. Putting It All Together: Trading, Strengths, and Well-Being
    9. Chapter 3: Best Process #3: Cultivating Creativity
      1. The Trader as Entrepreneur
      2. Allen, the Trading Entrepreneur
      3. The Success of the Trading Entrepreneur
      4. Trading and the Crisis of Management
      5. Trading and the Crisis of Creativity
      6. Creativity Provides Food for Our Strengths
      7. What Is the Creative Process?
      8. Finding Problems as Part of Finding Answers
      9. Can We Become More Creative?
      10. Trading Failure and the Downhill Spiral of Creativity
      11. The Essence of Creativity: Reframing Problems
      12. The Skills of Creativity: Switching Modalities
      13. The Skills of Creativity: Increasing the Productivity of Our Thought
      14. The Skills of Creativity: Finding Fresh Combinations
      15. The Skills of Creativity: Thinking by Analogy
      16. Creativity and Lifestyle
      17. Creativity in Groups
      18. Does Brainstorming Work?
      19. Tapping into Group Creativity Even When You Are Independent
      20. The Single Greatest Barrier to Creativity
      21. It All Fits Together
    10. Chapter 4: Best Process #4: Developing and Integrating Best Practices
      1. What Are Best Practices?
      2. Linking Best Practices into Best Processes
      3. Steps Toward Becoming a Process-Driven Trader
      4. How Many Trading Firms Are Truly Process-Driven?
      5. How Can Individual Traders Be Process Driven?
      6. Conducting a Process Review of Your Trading Business: Twenty Sets of Questions
      7. A Few Observations on Process Improvement
      8. Fifty-Seven Best Practices for Trading Success
      9. Summary
    11. Conclusion: From Best Practices to Best Processes
    12. Postscript
    13. References
    14. About the Author
    15. Index
    16. End User License Agreement