The Problem With Trading Psychology Books

I love reading trading psychology books because I exist in the behavioral finance space and I love to read. This puts me in a very small minority, however.

Most people purchase and read these types of books because they have recognized some of the behavioral issues in their own trading and want help. These types of traders really do have my heart, because it’s such a rare and wonderful thing to not only have the humility to realize our faults and our weaknesses exist, but to seek help and yearn to fix these problems makes for a very special type of trader. A type of trader I have always tried to help improve through my work.

Unfortunately, reading books on the matter does very little to help these traders out. There, I said it. These books, while a great read for behavioral finance nerds like me, are anywhere from marginally helpful, to downright useless for most people trying to one day trade for a living, or as a real and consistent financial supplement.

—By VP

Where Trading Psychology Books Go Wrong

This pains me to write, and I feel like the biggest turncoat even saying it. The Denise Shulls and the late Mark Douglases of the world deserve better than this. Their contributions to the space are legendary. Other lesser known writers like John Coates and Brett Steenbarger probably deserve even more praise in my opinion, but authors like the four I just named are more known for enhancing the work of traders at the more institutional levels. Denise Shull for example, was the inspiration for Maggie Siff’s character Wendy Rhoades on the show Billions.

These people are at least 10 times smarter than I am, and will ever be. But enough prefacing. My question to you is this: When you are finished reading these books, exactly how much information do you actually retain? This is a very important question to ask, because most people read these books to become better traders, not because they’re behavioral finance nerds like me and read them for (quasi) pleasure.

More to the point, if you are reading a trading psychology book, how many of the concepts that you learned from the book could you recite on command one month later? This is a rather important skill to have developed in this time, because the markets wait for nobody.

For me at least (a heavy reader), my number would be around 3-5 concepts retained overall depending on who wrote the book. This number also decreases slightly as years pass.

Let’s say my overall retention is average. This is actually a bit frightening. In a 300 page book, how many pages took up the 4 concepts I actually took away from it? 30? If this is true, why were the other 270 even written? And why did I even bother to read them? Just so I could hopefully come away with 4 concepts? Such a waste.

I’m not stupid, you’re never going to remember 100% of what you read, anywhere. But I have also read a lot of these books, and I can at least tell you where they tend to lose me the most. They are simply too academic. They are written by big-brained academics, who are often judged by their academic peers and contemporaries.

To put it plainly, these books weren’t even really written for us. They may have intended to be at first, but the academia brain takes over, and they end up losing your average reader early and often.

We stop paying attention. We are actually still reading the book in reality, but we’re reading passively, not actively anymore. We finish the book so we can say we finished it, but we walk away from a 300 page book with…..about 3-5 concepts actually remembered and retained.

This is next to useless. You must approach trading psychology in a completely different way if you’re ever going to master it. And yes, I have come up with a much, much better way.

And Why Is This?

Ugh, is this going to cost me money?

Yyyyyyyup! It sure is. But given how trading psychology, not your trading system, is the biggest thing standing in between you and long term success in the markets (I prove this by the way), how much would you be willing to spend to eliminate it?

This is not something a book or a 20 minute video can solve, I’m sorry, you are going to have to dedicate some real time to this. Considering how much time you have already spent learning technical analysis strategies however, this should still be an absolute breeze for you.

But the answer is my trading psychology course, and you would be wise to at the very least click the link and watch the video. If you still think you don’t need it, or yet another book is going to be your way out, I understand. But the video proves everything I say about how psychology is not only the biggest issue facing today’s trader (by far), but the fail rate that results from it is downright horrific. You’re going to want to see this.

It’s dense, I talk to you like an actual person, and we break things down in ways anyone can understand. We have separate chapters on the emotions we deal with, the problems we encounter as traders, and the solutions to those problems.

What’s more is we later connect the problem —> to the emotion —> to the solution, so you not only have a clear path of what to do next, but you actually understand why it’s happening so the chances of these issues repeating themselves go down over time.

Books cannot do this. You came here because you are actively interested in improving and one day mastering your own trading psychology. That’s a rare and beautiful thing. You’re 95% there. Now do the rest.

I wish you all the best either way.