The Cattlehedging Times January 2012 Edition

Summary From Previous Edition

Thank you to all who read and replied to our first Newsletter! What a variety of responses, ranging from Failure to Very Successful. Overall, the themes that came from our first question which was “How do you rate your trading ability?”, had something to do with emotion. Whether it may be fear, confidence, hope, or some other emotion, what I noticed was that those who responded with Successful or Very Successful appeared to be successful due to taking a more defined and methodical approach to taking risk.

Collecting demographic information and profiling

Mike Elvin, author of Financial RIsk Taking: An Introduction to the Psychology of Trading and Behavioral Finance, describes how traders tend to lose money because either they do not have the understanding of the markets themselves or they trade without method, strategy, or discipline. Elvin goes on to explain how traders can “fall prey to powerful emotion, which leads to impulsiveness and behaviors more akin to gambling then to genuine understanding”.

The “paramouncy principle” is how Elvin describes how you are the most important variable in trading and that anyone with average intelligence and the ability to learn overtime can become a successful trader. What traits, then does it take to be a successful trader? Look for our next edition. I will be talking about understanding Trading Competence and looking at conversations with America’s top traders. Any ideas of who we may be talking about? Who do you think are America’s top traders? Leaders? You will only need to fill the survey out one time.

We want to hear from you. Email me your comments, questions, thoughts and ideas. It is you, who we are doing this for; and it is you we want to hear from. Lori Hicks-Fox, MA lori@cattlehedging.com