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Why Traders Should Play Video Games


Last week for my birthday I received a PS3 (Playstation 3 Video Game console for those who live on a planet other than Earth).

It’s very cool.

Of course, then I needed the latest 1080p TV to play it on. So I bought that today … 56 beautiful inches of DLP.

Then, you don’t want to invest all that money, only to have your experience ruined by a sub par sound system. So I invested in a nice Sony surround sound system as well.

Gosh, you’d think I was 12.

But I rationalized that this is an investment in my trading career.

I’m sure the IRS will agree, right?

Don’t worry, I’m not even trying to write it off. It’s just my own way or rationalizing the outrageous investment.

But there is a little kernel of truth to it, and it is this …

For traders, day traders especially, my experience has been that our #1 challenge is over trading.

Since we love to trade, we want to put on trades all the time! After all, it’s fun to trade, not to sit and stare at a monitor.

And so we start to trade the market as though it’s a video game.

That’s a one-way ticket to “game over.”

The market isn’t doing anything significant very often, so there aren’t good low-risk trades to be had frequently.

The way that I, in my eternal immaturity, have decided to deal with that psychological impulse to treat the market like a video game … is to actually play video games and get the urge out of my system that way.

Plus, my kids love them and so it’s a great bonding experience when I play with my kids (yes, I know, more rationalization).

Actually I started doing this several years ago when I bought my first XBox. And guess what. As lame as it may sound … it actually works for me!

I get my adrenaline rush through the video games and therefore don’t have that “need” from the markets any more.

This article isn’t really about video games. It’s about the psychology of trading.

If you find yourself over trading, then simply ask what other activity you could do to satisfy your need for “action.”

Most traders are aware of this problem and so they attempt to suppress the need. That’s the wrong approach because they’re just putting a lid on a boiling pot.

Instead of fighting it, indulge it, but redirect the energy and get the need fulfilled in another way that won’t be financially detrimental.

What activity would you enjoy to indulge your need for an adrenaline rush? Add it to your schedule and you just may find your trading improves!

Have fun, play games and never grow up. Except when it comes to trading: Then it’s time to be mature, be patient and let the amateurs churn their accounts while you wisely wait and trade only the very best opportunities.

Fed Holds the Course


S&PThe markets moved up this afternoon after the Fed announced it would not raise interest rates.

This continues the “Mega-Trend” in the S&P 500 daily chart we’ve been watching in my Video Newsletter.

Momentum has been coming out of the market, even as prices have been edging higher.

Our short-term momentum indicator (MOM) has held the zero line as our long-term momentum indicator (DAD) has been moving down.

MOM is moving back up now as is the Cycle Indicator posturing the market to attempt a break the most recent high.