Market gyrations making you "tear out your hair" gives you very valuable secret information

Market's got you pulling out your hair? You're not alone - seems like everyone's been doing that this week! But wait - that impulse may be giving you some extremely valuable information ... seriously! Now, what would you pay for a secret that could transform your trading losses into trading gains? And, what if it's a secret that lies within you - within your own psychology and approach to trading? This free information can help you unlock your personal ability to change your trading style. It's all up to you. Here's the core secret: most traders lose money, and it's because of a set of psychological attitudes that often includes impulsive, or compulsive, behaviors. If you can alter your attitudes and substitute positively focused behaviors for losing ones, you really can transform your trading from losing to gaining.

The article quoted is one of today's most popular and most emailed at Yahoo! News. So go ahead and laugh, but please do read this! It provides some some fascinating information about the drive impulse and gambling, which I can guarantee you has a LOT to do with trading the markets. I'm willing to bet (ha! gotcha!) that we, and Dr. Brett*, can pull some real good info out of this. I'm certain that the drive impulse these scientists are talking about, is also linked with poor trading results - overtrading, impulsive decisions, anxiety, all that.

This is one of the oldest known behaviors - and guess what, all forms of fortune-telling, forecasting, betting, and gambling are also among some of the oldest known human behaviors. It's well known that gambling and money-losing compulsive trading are linked with certain psychological issues - which is no reason to ignore these facts.

So don't laugh - or if you laugh, enjoy it, but then read on!

Treatment for Hair-Pulling Shows Success (Time//Yahoo)
By John Cloud – Fri Jul 17, 2:20 pm ET

Our brains can give rise to all manner of odd psychiatric problems, but one of the strangest is trichotillomania - better known as hair-pulling. The uncontrollable desire to yank out one's hair may seem like a freaky sideshow diagnosis, but the disorder is actually not so uncommon, affecting perhaps 2 million American adults over 22. Exact numbers are hard to come by since people with the condition often hide it - sometimes they don't even appear in public because of their embarrassing, mangy bald spots. There is no approved treatment.
But a paper published this week in the prestigious Archives of General Psychiatry offers a simple new hope for trichotillomania sufferers. In a small trial of 50 hair pullers, more than half of those who took an over-the-counter antioxidant called N-acetylcysteine, which is available in pill form at mainstream stores like GNC and Vitamin Shoppe, had improvement of symptoms after 12 weeks, compared with 16% of those taking a placebo.

If the findings bear out, they may herald a potential new treatment for an age-old condition. As psychiatric symptoms go, hair-pulling is among the earliest recorded. According to Dr. Jon Grant, a trichotillomania expert at the University of Minnesota School of Medicine and the lead author of the new paper, Hippocrates himself said that in order to test whether patients were faking their illness, doctors must ask whether they are pulling out their hair. The behavior is so commonly associated with distress that the stock phrase to describe a stressful situation is that it causes you to tear your hair out.
...
Grant theorizes that trichotillomania may be a kind of grooming irregularity that falls into the obsessive-compulsive family of disorders. "Some parrots pull out all their feathers," he says. "Some mice pull out all their fur."

That may explain why the antioxidant N-acetylcysteine can help prevent it. The compound is thought to work by reducing the synaptic release of a neurotransmitter called glutamate. As Grant told me, glutamate is the communication chemical that "tells the brain, 'Do it! Do it! Do it! Do it!' And the rest of the brain can be overwhelmed by this drive state."

Reduce glutamate and you may reduce the drive state. Previous studies have suggested the supplement may also reduce urges to use cocaine and to gamble. (See TIME's health and medicine covers.)

Funny as this seems at first, compulsive behaviors that include over-trading, impulsive trading, and gambling, are no laughing matter. I'm convinced these explain why so many traders stick with it, despite losing large amounts of money. This is known to the IRS - I've seen articles stating that the IRS is aware that many people continually report losses, with data backed up by their reports from brokerages.

I'm absolutely serious about keeping Brett Steenbarger's TraderFeed blogspot in my list of links at right (see item 10 in that list). Dr. Brett trades, and advises, and really knows his stuff. If you think you may be having some trouble, maybe over-trading, churning your own account (the very thing bad brokers are taken to court for!), losing and getting frustrated - and it happens to 90% of all traders - SLOW DOWN, take a deep breath. Check out some of these resources. Spend more time charting, and less time picking away at the trading screen (that's my approach now!). Care enough about yourself, and your family and friends, to keep your worrying about the markets focused on discussion, charts review, etc. ... and let your actual trading accounts be a source of growth and happiness.

This does have a lot to do with "Unbiased Trading." You must have the psychological detachment to remain objective. The ability to cut losses and honor stops, rather than increase position size and place even more of your account in jeopardy. And, to avoid trading when, candidly, the situation is murky and you don't have an edge.

I would also suggest that much trading anxiety - and consequent poor trading results - comes from the desire always to be "right", and the desire to be in the market and trading whether or not there's great confidence - or confirmation - of being right. No analyst or trader can be right all the time. The ability to acknowledge that - and to back off trading when the confidence or confirmation are not there - and/or when you don't have enough information to know whether it's there - makes a huge difference to trading results, AND peace of mind.

If this sounds simple, then it is - but also, it isn't. Coming to terms with "the man in the mirror" is simple in concept. But it requires the willpower to do it and stick with it. Maybe it means a 12-step program, maybe it means following any other strategies and suggestions ... and you can find great resource material on this at Brett Steenbarger's TraderFeed. Since Dr. Brett is a trader himself, he's been there - he knows and understands what you're dealing with. Go to his site, bookmark it, ignore his trading commentaries for now, and spend some time browsing around the valuable information he provides for how not to trade (e.g. - don't take position sizes that are too large! don't trade impulsively ... don't even feel that you "have to" trade), and adjusting your attitude and approach. I promise you, you'll be glad for taking these positive steps for yourself.