I am seeking out a few good books on trader psychology/decision making. I have developed a great analysis paralysis, so any help will be appreciated.
Thanks, Mike
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Hi Mike,
Welcome to the community. I’ll gladly recommend a few books that describe the process of decision making and the thought process. Some of the books were written for traders, and some are general about the thought process. However, knowing and understanding the thought process does not mean you can master it without real experience. Having practical knowledge based on experience far exceeds any theoretical knowledge, in my opinion.
Please consider several things when you think of other sources that could help you with the thought process. Maybe you are just afraid to place trades, and as a result, you are looking for a way to verify your trade that would assure your success. In my experience, overanalysis and using too much information leads to the paralysis that you described. Also, beginners feel they need to know “everything” to place a trade or be ready to trade, but in reality, the learning process starts (in no small degree) when you analyze real trades you have placed in the market.
I have seen the analysis/paralysis happen within beginner traders. They lack any previous decision-making backgrounds that are made under pressure or occupations like engineers/programmers seeking linear relationships between the process and the end result. However, trading is fluid, and a trader or an inspiring trader needs to understand that you can not have a fixed mind. Anything and everything can happen.
I would start with books by Dr. Brett Steenberger, and he could be a good start. The rest is up to you.
Good Luck!
Matt Z
Optimus Futures
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
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I’m a little late to this party, but “Thinking in Bets” by Annie Duke is an excellent book on decision-making with incomplete information. Sound familiar? Sounds like the markets to me. “Alpha Trader” by Brett Donelly is another I recommend giving a read. There is a boatload of info in this book, and he covers psychology very well.
“Thinking in Bets” is a pretty short read at 231 pages, but worth every penny. “Alpha Trader” is not short by any means at 485 pages, but he nails it on both of the topics you requested and then a whole lot more.
Annie Duke was a professional poker player and Brent Donelly is a very successful FX trader. Although neither of their fields is directly related to futures trading, their experiences translate beautifully to it.
You can get both on Amazon (that’s what I did) and I’m sure Google Play Books. If you decide to buy a physical copy of one or both of them, please do yourself a favor and buy the hardback. They last a whole lot longer. Plus they look really cool on your bookshelf.
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