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· 241 ratings · 29 reviews

Start your review of Market Mind Games: Profiting from the New Psychology of Risk, Uncertainty, and the Convergence of Trading with Investing

Jun 12, 2019 Bryan Eric rated it it was amazing

This book will change the way you think about trading and markets. After reading this book, it feels like the author is in my head and knows exactly the steps needed to make significant improvements in my trading. I couldn't put the book down and have tons of notes and action items with steps to take my trading to the next level.

I'll update the review after I have done the necessary work that the author recommends, but this is the first book I've read in a while with a significant amount of act

I'll update the review after I have done the necessary work that the author recommends, but this is the first book I've read in a while with a significant amount of actionable information in it and I can't wait to get started applying it.

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May 30, 2020 David rated it really liked it

Humans make markets and the human mind plays games—both on other human minds and on itself.

Rating: 4/5

Intentionally resolve to evaluate the social/human context through which you analyze your data, projections, or probabilities. Do this first for yourself as a risk management tool, i.e., what are the emotional and social pressures playing on you, and second as a strategy tool for understanding market action.

Reality points to a very big gap between where the numbers leave off and exceptional per

Humans make markets and the human mind plays games—both on other human minds and on itself.

Reality points to a very big gap between where the numbers leave off and exceptional performance begins!

Ninety years and incalculable amounts of measuring power later does not change the fact that the only thing about the future that we can be sure of is the turning of the Earth and the attendant sunrises and sunsets. We know nothing else for sure other than time will march on.

No matter how you analyze a market or a trade, no matter what your timeframe, the only "thing" you are ever trying to deduce is if other market players will value the asset in question differently in the future.

We go about making our market decisions based on facts we try to find but, in the end, they don't tell us what we want and need to know. Facts can never be more than clues in a puzzle. We, if we are going to consistently get it more right than wrong, need the explicit strategy of predicting people.

You make money by correctly predicting the opponent's future perception—not "the facts"!

Price reflects perception, and perceptions can stem from almost innumerable combinations of factors.
Every single price at every single moment now and forever will be only a perception—nothing more and nothing less.

Solving the eternal puzzle of markets depends entirely on your ability to fluidly wield the sword of numbers as a language and not as a law.

Counterintuitively, we deal with uncertainty faster than we deal with arithmetic! Could this be because the vast majority of what we deal with is actually uncertain even though we typically forget that in reality we don't ever know what will happen tomorrow.

Evidently, the visual cortex needs the context of emotional meaning to turn shapes, colors, etc. into anything identifiable.

An emotion alone never lost a dime!

We all know that the traders who make money year in and year out (and there are plenty of them out there) always work the game in this order anyway—manage risk first, seize opportunity second.

...do not make any decision you don't have to when you lack physical energy. In other words, don't trade when you are tired—you will lose money

Never forget, everyone wants to sack you! Don't give away an edge you can completely control.

Feel what you feel—as much as you can feel it.
Get used to admitting to yourself (and if possible to someone you can trust) what you are feeling. Instead of trying to overcome or intellectualize a feeling (saying to yourself, "stop doing that"), say I feel like x, y, or z. Just let it be and don't judge it.
Simply put, the more conscious of it you are, and the sooner you get conscious of it, the more you can use this knowledge first as risk management and eventually as a tool for reading others in the marketplace. Whether they know it or not, they live on this spectrum too.
Don't be afraid to put it into words. In fact, reams of research out of the psychoanalytic traditions and now even decision science indicate that putting feelings into words, does indeed provide a great benefit. Putting feelings into words not only reduces anxiety but verbalization can actually allow us to work more effectively on a thinking level.

Given that 100% of the game relies on your good judgment, why wouldn't you create the advantage of being well rested? Sleep is an edge.

Everyone spends all their time searching for what everyone else doesn't know, when a lot more money can be made searching for what others are about to know.

If you want psychological leverage, you need to elevate this introspective analysis to a priority even higher than knowing what the market is doing at any given moment.

A Very Basic, Very Powerful Psychological Leverage Plan

Let me boil the basic plan down to a cheat sheet:
1. Create physical energy.
2. Read other people.
3. Get the risk management edge through knowing yourself and how you feel (your emotional contexts) operating at any given moment.
4. Get the strategy edge by using that knowledge of yourself to understand others (their emotional contexts), which they most likely will act out (since they aren't doing #3).
5. Know when to push it because you have emotional capital and psychological leverage.
6. Know when not to push it because you are acting out of an emotional context fueled by the past, be it the immediate past or the distant fractal past.

You certainly don't want to try to make any given amount every day. You could do it for a week or so as long as you knew it was a training wheels exercise but, overall, the idea makes me crazy because it sets anyone who follows it up for failure.

But see here is the rub—you are tricking yourself. The multifractal and simple fractal self-perceptions and expectations are being acted on.
But we tend to like what has defended us in the past. Defense mechanisms, the roots of not knowing, worked for us as children. They kept us mentally safe and motivated. If something goes wrong when you are little and you literally have no power, it makes you feel as if you do (have power) to say "oh, it is my fault." Think about it; if it is your fault then it lies within your purview to do something about it. This is actually called the narcissistic defense.

In adulthood, these explanations and expectations hold us back. They function more like keeping a caterpillar from becoming a butterfly. A silk cocoon seems to have its advantages but, really, how does it compare to the free flight of a butterfly?

If a feeling feels urgent, if it feels compelling, suspect it as impulse.

In a new world where feelings and emotions count, step one turns out to be quite different than you would think. Ironically, the most helpful thing to do when you have blown it is to feel bad! It won't kill you, it won't even cause you to throw up (most of the time), but it will put your body in synch with your mind and your mind in synch with reality.

I can guarantee you that a psychological set-up exists in your trading that makes you feel like you felt when you were a child. It is all there. The simple and early fractals were there before you got to high school. They may become re-mixed somewhat and events from your teenage years may exacerbate them, but the roots go deep.
Whatever self-perception, set of beliefs and expectations, and explanations you came up with for your rightful place in the world, chances are the negative or limiting ones are just the narcissistic view of a child who, if they can jury-rig something into being their fault, gains a false sense of control over the situation.

Think you are not susceptible to your own ego? Think there are guys out there who don't know a thing about how they really feel and yet are billionaires? There may be, although I would argue they know themselves better than their press agents ever let on. The other thing they certainly know is that markets are at their core only human games, not mathematical ones. They know this even if they spend all their time developing algorithms to stalk the cadence of the market's language. The numbers represent the playing cards and winning is way more about the mind games of playing poker, hands down, than anything else.

Spend half of your time working on yourself and you will make more progress than if you spent all of that time trying to figure out the next great unknown piece of information.

...more

Denise Shull is a neuroscientist and former trader. Given her background, I was expecting an truly powerful and insightful book. I did learn from the book, but it did not live up to expectations. Her premise is spot-on: All decisions involve emotions as much as you'd like to divorce yourself from emotions in making trading decisions. This is simply not possible. If this is so, then thoroughly understanding your emotions....and even using them to your advantage in decision making....will make you Denise Shull is a neuroscientist and former trader. Given her background, I was expecting an truly powerful and insightful book. I did learn from the book, but it did not live up to expectations. Her premise is spot-on: All decisions involve emotions as much as you'd like to divorce yourself from emotions in making trading decisions. This is simply not possible. If this is so, then thoroughly understanding your emotions....and even using them to your advantage in decision making....will make you a better trader. So far, so good. Great start. But then the practical applications simply fell well short for me. Plus the writing style did not hold my interest. Her attempt to weave a fictional story into her non-fiction work (like the totally engaging The Goal by Eli Goldratt) fell completely flat....it was neither entertaining or insightful. ...more

There was useful information here about paying attention to your feeling and emotions.

helpful and insightful book for discretionary traders to seek an edge in the market.

I have been spending a lot of time thinking about 'decision-making' and the role our emotions and subconscious plays in influencing our conscious thinking and analysis. This book has some great core ideas about the role of emotion and the subconscious in our decision making, but overall is poorly written.

Our core, underlying beliefs shape our decisions and our emotions mediate confidence and influence how we perceive information and risks.

Emotions (and physical feelings like hunger and fatigue)

Our core, underlying beliefs shape our decisions and our emotions mediate confidence and influence how we perceive information and risks.

Emotions (and physical feelings like hunger and fatigue) should be seen not only as a factor of influence but as also as a data source. They give us information about our subconscious beliefs and desires, and how our analysis might be swayed. Understanding this - your emotional context - is important for improving decision making. One study found that people who feel their own emotions more intensely have higher decision making performance.

Building on this, she argues that the emotions we express are recurrent and the result of innate and learned responses (from early life) to our environment. Similar situations react with our emotional context to create similar decisions and outcomes which is why many people feel like similar things happen to them. To avoid falling into repetitive emotional reactions we need to understand the source of this 'fractal emotional context' - an emotional context playing out over different time frames and scales of life events - by examining our past traumas and relationships.

In the end we should create an inward looking process to make us aware of our feelings and emotions and their likely source. We need to understand where we sit on the fear-confidence spectrum and embrace that uncertainty exists. The lessons are the same as old trading wisdom teaches, such as understanding your ego and letting go of it, as well as tips superforecasters give about being weary of your cognitive biases. I will be adopting her recommendation to create a process for examining feelings and emotions.

Markets at their core are about the changing expectations of humans, influenced by emotion and beliefs. It doesn't matter if investments are made on a discretionary or algorithmic basis because there are always human beliefs behind these models. Understanding the source and changes of our beliefs and emotions and those of others can only improve our performance. In fact, some research has found that traders with greater scores on 'theory of mind tests' are better able to predict price changes.

All of these ideas are described through a narrative involving a trader learning about the emotional context through lectures given by the author. He then tries to use her ideas to start a fund. While I agree with and like her ideas, I really do not like this format. The story was not very exciting, there was too much repetition, poorly worded sentences and many mistakes. This could have been written with more impact if it was condensed to the key ideas, supported through more anecdotes from clients.

After reading this book, 'The behavioural investor', 'Superforecasting' and other work on thinking and decision making I am starting to believe that cognitive biases, ego and emotion are all just the result of a few underlying factors in the brain. We learn models/beliefs about the world that we use to maintain our wellbeing (above all else) and secondly to increase our prosperity. Ego is simply the brain's ability to protect its beliefs from changing because beliefs are necessary to determine behaviours. In that sense ego is important for us to live life without questioning things constantly or being gripped by inaction. Emotions and feelings are the feedback systems to guide us toward different behaviours, models and beliefs to serve the ultimate goal of survival and prosperity. This is likely not the best way to think about this but its a good starting place for me while I continue to learn about this fascinating topic!

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Rarely do I have to work so hard to get through a book. The execution of this narrative is mind-boggling terrible. I understand what the author was attempting to do. It didn't work. She needed a better editor.

Putting that aside, the psychological science presented is mostly accurate, but cherry-picked to weave a brain and behavior story that is far more complicated. I should also note that some of the research presented has been found to be unreplicable (meaning, it's probably wrong).

Bottom lin

Bottom line:
Yes, there is an incentive behind every action that can be explained in behavioral economic terms.
Yes, emotion can both get in the way of decision making, but can also facilitate clarity.
Yes, dynamics (the underlying narrative we tell ourselves) can facilitate poor decision-making.
Yes, people repeat behavior, even self-destructive behaviors because the outcomes are familiar.

There is nothing new provided within these pages; the author merely attempts to take psychological science and psychodynamic theory and link it to market-related decision making.

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Aug 08, 2020 Akshay Iyer rated it did not like it

Okay. Just 2 things to get from this book -
1. Understand Ourselves
2. Accept the emotions you've and use your psychological leverage to understand the market emotions.

The book has been bragged to 254 pages, unnecessarily. Struggled a lot to finish it while skimming a lot of contents. Every other page has "Michael" mentioned in it. Lol.

I love books on finance and markets, but this has been straight up time consuming.

A book summary (if avaibale) should suffice for this.

Cheers!
Happy Reading!

Okay. Just 2 things to get from this book -
1. Understand Ourselves
2. Accept the emotions you've and use your psychological leverage to understand the market emotions.

The book has been bragged to 254 pages, unnecessarily. Struggled a lot to finish it while skimming a lot of contents. Every other page has "Michael" mentioned in it. Lol.

I love books on finance and markets, but this has been straight up time consuming.

A book summary (if avaibale) should suffice for this.

Cheers!
Happy Reading!

...more

Jul 03, 2020 Carter rated it really liked it

As someone who just recently got into the market and a lover of psychology, I saw this book as the perfect union between a new found interest and an old one. Although what I expected is different than what I received (storytelling style), it provided some truly illuminating content. One of the most intense journeys is understanding who we are and why we do what we do. This book has provided me with a little more context in my search for answers while using Wall Street principles to drive the mor As someone who just recently got into the market and a lover of psychology, I saw this book as the perfect union between a new found interest and an old one. Although what I expected is different than what I received (storytelling style), it provided some truly illuminating content. One of the most intense journeys is understanding who we are and why we do what we do. This book has provided me with a little more context in my search for answers while using Wall Street principles to drive the more nuanced points home. ...more

Jan 31, 2021 Julison rated it it was amazing

I never thought this book would help me so much in trading. No, there's any technique or new fundamental analysis on it. But there a complete new way of thinking about markets by thinking about ourselves.

Lessons are very clear, and there's a step by step guide for you to start to know... about yourself.

Author keeps trying to help you focus on yourself all the time, to help you understand the inner and deep reasons about your market decisions. I loved that!

Mar 19, 2020 Reka Beezy rated it it was amazing

This is probably one of the better books I've read on trading simply because: 1) it wasn't written by a man and 2) it talks about harnessing the power of your emotions, which is rare in the world of trading. It definitely set me on a better path with my trades. I was so tired of hearing "There are no emotions in trading." It was getting exhausting.

Jul 19, 2019 James rated it really liked it

This review has been hidden because it contains spoilers. To view it, click here. This book tells you exactly what condition you must be in before going into an emotional warfare that is the market, and this book helps me a lot in determining when should I do my market actions or just stay calm and recalculate my possible moves.

Aug 03, 2021 Cameron rated it really liked it

Good book that breaks down how our views of the market are colored by our own internal biases. It's a recurring theme but Shull approaches things in a new way that is interesting. The book is presented as a novel which makes it easier to read, albeit very cliched kinda corny. Good book that breaks down how our views of the market are colored by our own internal biases. It's a recurring theme but Shull approaches things in a new way that is interesting. The book is presented as a novel which makes it easier to read, albeit very cliched kinda corny. ...more

Very interesting book about the emotional side of trading (not investing). The author was an ex-trader who now has a practice to help current traders overcome self-inflicted psychological obstacles that some trades bring into the game.

terrible. really badly written. avoid

This books offers a different perspective on what affects our decision making with some psychology notes and an example of the financial market.

Jul 20, 2019 Denise Shull rated it it was amazing

This review has been hidden because it contains spoilers. To view it, click here. But alas I am biased.... the spelling mistakes need fixed. Let it be known that we have asked McGraw-Hill multiple times...

Best trading book out there I have read so far about psychology.

May 25, 2021 Trung rated it it was amazing

One of the best psychology book for trader imo.

May 23, 2020 Wes rated it really liked it

Interesting topic. I enjoyed the narrative storyline and writing style. Not as much practical "how to" as I had hoped. Interesting topic. I enjoyed the narrative storyline and writing style. Not as much practical "how to" as I had hoped. ...more

This is the first time that I learn all decisions require emotion. The research of Antonio Damasio is very impressive. He and his colleagues find that people with sustained brain damage related to the experience of emotion can hardly make even the simples of decisions. The author (or she got it from the current research) states that we need emotion for vision, for meaning, and for essentially everything.

The link below talks about how neuroscience relates to economics:
https://www.aeaweb.org/arti

The link below talks about how neuroscience relates to economics:
https://www.aeaweb.org/articles?id=10...

The book overall is kind of juicy. However, it doesn't fit my reading style. There are too many chapters and things are cut into pieces.

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Oh boy. Where to start with this one.

First, the book is littered with grammatical and spelling errors. It should go without saying that any piece of writing in this day and age should exist without errors.

Oh boy. Where to start with this one.

First, the book is littered with grammatical and spelling errors. It should go without saying that any piece of writing in this day and age should exist without errors.

Second, the advice given in this book is supposed to be tailored for traders, but it is so generic that it could be applied to any professional seeking to enhance their work output that it seems completely unnecessary that this book was ever even written. Why do I need to read a book on how to be a better trader if all it tells me is to stay healthy and get enough sleep? And how is this information specific to trading in any way?

Third, the author seems to have a very poor understanding of even basic psychology. Most of the concepts in this book are poorly explained, and the liberties the author takes are almost completely incoherent. She also argues a thesis that essentially does away with rational logical thinking for the increased value in emotional decision making.

Last, this book contains some type of silly narrative about fictional traders who attend conferences presented by the author herself, which serves as a bridge between the fictional and non-fictional aspects of the book. As a reader, I would not have needed the fictional examples of the non-fictional writing if the author would have just spent more time actually explaining her thesis in a non-fictional way, as opposed to trying to relate her unimportant concepts to her non-fictional writing.

Don't waste your time with this stinker. The only reason I didn't give it one star is because somewhere in the depths of the author's thesis, there is some merit to the idea she was trying to present which I am actually interested in. She just did a very poor job of explaining it.

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This book resonates on one general big idea: understand ourselves.

The author pushes us to embrace our emotions instead of ruling out emotion by using logic and rational thinking. How do we react in the time of uncertainties, when there are not many information about what is going to happen next and that we have no choice but to act at that moment?

Decision is going to be made at that point and we have so few information about it. How are we going to make a decision and on what basis?

I like the au

This book resonates on one general big idea: understand ourselves.

Decision is going to be made at that point and we have so few information about it. How are we going to make a decision and on what basis?

I like the author's argument that emotion is the basis of human thoughts; it forms the foundation on how we think for the rest of our life and it all started from the moment we were born. As we progress through our life, we absorbed all the feelings that we had felt in the past and forms an unconscious framework that will help in determining on how we would feel for any incident in the future.

This book, on the surface gives me the impression that this is going to be some serious read and that the content of the book will be pretty dull and dry. But the author has take it to another level by presenting it in a very different way, making it entertaining to read and at the same time easier to absorb and understand the content. Because honestly, some information of the book seems to be pretty technical for those who didn't study psychology.

Overall, this book has helped me to see the fact that embracing emotion is not necessarily a bad thing. All we have to do is to understand that reason behind the feeling that we are feeling.

Recommended.

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Insightful for traders. Suprisingly, I had read it too times. Once when I began trading, and then while I was trading. Mindset is just something we have to continually pursuing in this game.

Denise K. Shull, AM'95
Author

With Chicago University as the fictional setting, this books lays out a new theory of how we make decisions about risk and uncertainty. It draws on the science showing the requirement for emotion. It also outlines what appears to be a fractal emotional context—a repetition of earlier experiences—influencing our perceptions and judgments when evaluating anything uncertain but particularly when thinking about whether to buy or sell Apple stock.

Denise K. Shull, AM'95
Author

...more

Feb 15, 2016 John Richards rated it it was amazing

outstanding psychological aspects of trading. Important issues thought about but never discussed and studied. excellent

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