Last Tuesday night on StockTwits.TV, I began broadcasting a program called Market Shrinkology in which I examine a broad range of topics related to the psychology of markets.
I am really excited about this because it allows me an additional medium in which to more closely connect with the StockTwits community and my hunch is that we might all learn a little something in the process.
Tonight at 9:30pm Eastern, I will air the second program and wanted to take a bit of time to discuss one of the program’s topics beforehand.
Structuring Episodic Memory
Memory is a funny thing. There are salient events which might have occurred years ago that we recall as if they happened yesterday and things that happened yesterday that we are unable to recall at all.
In important ways, episodic memory and emotion are closely linked. This is why i remember breaking my leg when I was four (it was very scary) but can not remember what I had for lunch 2 days ago.
As well, memory is closely linked to how we learn. I learned a lot that day i was four and broke my leg and never again jumped from the roof of the shed.
Building the Best Trading Memories
So how can we use these tidbits about memory to improve our trading?
There are instances in every trader’s career in which he/she has well executed trades. I am not necessarily talking about the biggest winners. I am instead talking about trades where the trader did everything just right and according to plan and either made money or limited loss.
Some have these experiences every day. For others, the well executed trade is more elusive.
The exercise I will walk you through tonight will help you create vivid and lasting memories around well executed trade experiences. The goal is that by amplifying the experience, you will remember them better and allow them to more readily influence your future behavior.