Dacher Keltner, a psychology professor at UC Berkeley, after years of lab and field experiments found. Subjects under the influence of power, in studies spanning two decades, acted as if they had suffered a traumatic brain injury—becoming more impulsive, less risk-aware, and, crucially, less adept at seeing things from other people’s point of view.
As traders on a winning streak or about to place a large trade we are often overwhelmed with a feeling of power. The problem is that this feeling of power seriously affects our ability to act rationally when making trading decisions and usually leads to financial loss.
Is there nothing to be done?
According to Jerry Useem. No and yes. It’s difficult to stop power’s tendency to affect your brain. What’s easier—from time to time, at least—is to stop feeling powerful.
The goal of the PsyQuation Robo Coach is to help you identify your risk and behavioural mistakes with alerts and then provide you with suggestions how to rectify your mistakes.
What PsyQuation is doing is more than providing you with factual information, it is providing your brain with information that is designed to show you that you are not perfect. This is nicely illustrated by the following example:
PepsiCo CEO and Chairman Indra Nooyi sometimes tells the story of the day she got the news of her appointment to the company’s board, in 2001. She arrived home percolating in her own sense of importance and vitality, when her mother asked whether, before she delivered her “great news,” she would go out and get some milk. Fuming, Nooyi went out and got it. “Leave that damn crown in the garage” was her mother’s advice when she returned.
As the CEO of PsyQuation a behavioural change software for traders we see it all the time, people are reluctant to accept they are not as good a trader as they think they are. While it is not fun seeing alerts across your equity curve, signalling the fact you are not so powerful. The message we are sending is far deeper than an alert to a mistake. It is a signal to your brain that you are not as powerful as you might have thought and with this message we are in fact opening the traders mind to the prospect of behavioural change and freeing the trader from the shackles that power is imposing on ones decision making process.
Less power to you.