Psychopaths Could Be Best Financial Traders!

[erranta]

http://today.reuters.co.uk/news/newsArticl...-UK-TRADERS.XML

"Wanted: psychopaths to make a killing in the markets".

Research revealed the best wheeler-dealers could well be "functional psychopaths"

The result was those with 'brain damage' outperformed those without!

And I thought that's exactly what they all DO after each day's session in their City locals!

Edited September 19, 2005 by erranta

[Sledgehead]

Makes sense. I try to let machines do most of my thinking. It has the same effect imo.

But just in case, forum members might want to remove their "location" information. :angry:

[MarkG]

I'm not convinced, unless they're purely talking about bull markets: where even a monkey throwing darts can make good money. I've been reading about psychos as research for a movie script I'm writing, and I suspect they'd be far too impulsive to make money in a normal market.

[Ah-so]

This is probably true of other areas, not just stock market traders. To start your business you need to be a risk taker. Some of those who take that risk inevitably become very wealthy. However, the vast number of business start-ups flop, despite the entrepreneur also being a risk taker.

We only hear about the few who do make it big and forget about those who fail, leading us to believe that taking risks is the path to success. By and large it will be the path to despair for all but the few.

[penbat1]

I'm not convinced, unless they're purely talking about bull markets: where even a monkey throwing darts can make good money. I've been reading about psychos as research for a movie script I'm writing, and I suspect they'd be far too impulsive to make money in a normal market.

<{POST_SNAPBACK}>

Oh really ? I've been studying and reasearching psychos for years. I have met quite a few. Most of my website http://www.bullyeq.com is about psychos and has loads of links to other sites.

Yes i agree with you, psychos love to tread on people's toes, manipulate and use deceit, twist and distort facts to their advantage etc etc. They are not nice people and although they may be extra articulate, intelligent and organised they often make bad decisions and fake their competency. Yes they are not keen on thinking long term. Does all this remind you of any politicians ?

Edited September 19, 2005 by penbat1

[MarkG]

Thanks, I'll take a look at that site tonight.

[penbat1]

Thanks, I'll take a look at that site tonight.

<{POST_SNAPBACK}>

Yes I can think of quite a few unit trusts that piled into risky stocks such as technology to maintain top position in performance tables during bull markets. This was only possible in a bull market and once bull turns to bear it all comes crashing down. Definitately a strong whiff of psychopathy in these cases and no good to anyone in the long run.

[Saving For a Space Ship]

I seem to remember reading a piece a few months ago about corporate leaders having borderline psychopathic personalities. Think the article made particular reference to the 'destroy the competition' mindset.

[Guest Charlie The Tramp]

Yes i agree with you, psychos love to tread on people's toes, manipulate and use deceit, twist and distort facts to their advantage etc etc. They are not nice people and although they may be extra articulate, intelligent and organised they often make bad decisions and fake their competency. Yes they are not keen on thinking long term. Does all this remind you of any politicians ?

When I was in business met many people who fitted your description, how you could do them up like a kipper after boosting their fragile egos.

[Sledgehead]

The article refered to lessions in those areas of the brain responsible for producing emotion. It claimed the emotional detachment produced by such injuries wa what made them good traders. This makes perfect sense.

It says nothing about being volatile. I don't know much about this field but my understanding is that psychotics who kill are able to do so because of a lack of empathy. They see a piece of meat, not a human. They do not kill in a fit of rage but purely because it pleases them or makes sense at the time. I can see why this emotional detachment would would help them trade.

MarkG describes a "crime of passion" murderer. Totally different and much less dangerous (you have to make them angry first). These sorts obviously make useless traders as they are not in control of their emotions. Don't mix up these types of killer. You'll most likely offend one sort or the other, then where will you be? Dead that's where! :angry:

Edited September 19, 2005 by Sledgehead

[MarkG]

MarkG describes a "crime of passion" murderer. Totally different and much less dangerous (you have to make them angry first).

No, I'm describing a psychopath: or, at least, one subset of their personality.

This site, for one, includes the traditional psychopathy checklist (first site Google found it on):

http://faculty.ncwc.edu/toconnor/428/428lect16.htm

Amongst other things:

"13. LACK OF REALISTIC, LONG-TERM GOALS -- an inability or persistent failure to develop and execute long-term plans and goals; a nomadic existence, aimless, lacking direction in life.

14. IMPULSIVITY -- the occurrence of behaviors that are unpremeditated and lack reflection or planning; inability to resist temptation, frustrations, and urges; a lack of deliberation without considering the consequences; foolhardy, rash, unpredictable, erratic, and reckless."

Don't really sound like a good basis for a solid trading career to me.

[penbat1]

The article refered to lessions in those areas of the brain responsible for producing emotion. It claimed the emotional detachment produced by such injuries wa what made them good traders. This makes perfect sense.

It says nothing about being volatile. I don't know much about this field but my understanding is that psychotics who kill are able to do so because of a lack of empathy. They see a piece of meat, not a human. They do not kill in a fit of rage but purely because it pleases them or makes sense at the time. I can see why this emotional detachment would would help them trade.

MarkG describes a "crime of passion" murderer. Totally different and much less dangerous (you have to make them angry first). These sorts obviously make useless traders as they are not in control of their emotions. Don't mix up these types of killer. You'll most likely offend one sort or the other, then where will you be? Dead that's where!    :angry:       

<{POST_SNAPBACK}>

Yes at the most basic level, psychopaths have faulty wiring in the part of the brain that normally provides a conscience. But only a small number of psychopaths are physically violent in any way. Most commonly they just bully and manipulate people.

[since the beginning]

The Coporation

There is a documentary that suggests companies act psychotically.

[penbat1]

The Coporation

There is a documentary that suggests companies act psychotically.

<{POST_SNAPBACK}>

Quite a few companies certainly do. I have worked for some

I like the expression "corporate psychosis" a sort of shared psychosis.

Incidentally the key thing about "The corporation" is that they claim that many companies are psychopathic in nature but a form of psychosis "corporate psychosis" results from this.

Edited September 19, 2005 by penbat1

[Smell the Fear]

No, I'm describing a psychopath: or, at least, one subset of their personality.

This site, for one, includes the traditional psychopathy checklist (first site Google found it on):

http://faculty.ncwc.edu/toconnor/428/428lect16.htm

Amongst other things:

"13. LACK OF REALISTIC, LONG-TERM GOALS -- an inability or persistent failure to develop and execute long-term plans and goals; a nomadic existence, aimless, lacking direction in life.

14. IMPULSIVITY -- the occurrence of behaviors that are unpremeditated and lack reflection or planning; inability to resist temptation, frustrations, and urges; a lack of deliberation without considering the consequences; foolhardy, rash, unpredictable, erratic, and reckless."

Don't really sound like a good basis for a solid trading career to me.

<{POST_SNAPBACK}>

Most people who enter trading as a career match this description. It is generally not a long term career. The idea is that you make as much money as possible in a short time (often 5-10 years) and then get out. Of all those recruited to train as traders, only a small proportion make it past a couple of years.

You basically need to "bet the house" on it working out. Generally it doesn't.

As regards impulsivity, there is no room for procrastination in trading. You may be confusing trading with investing, which requires more in depth thought. Trading generally requires instantaneous reactions to events, otherwise the opportunity is gone.

Most traders work on a "flow" principle, where the idea is to buy and sell instantaneously or as near as possible, maintaining a small inventory and minimising risk exposure. You make a few basis points on each flow, which can add up to a lot if you trade large amounts very quickly.

[Sledgehead]

What's the difference between psychotic and psychopathic (I'm just filling out a lonely hearts application thingy).

[penbat1]

What's the difference between psychotic and psychopathic (I'm just filling out a lonely hearts application thingy).

<{POST_SNAPBACK}>

Psychotic just means detached from reality and there are various reasons why someone could get psychotic - apparently some people get psychotic smoking the weed for example.

Psychopathy is a type of person with a characteristic pattern of behaviour which is likely to have a psychotic element. Essentially a psychopath is someone who has no conscience.

[Elizabeth]

Quite a few companies certainly do. I have worked for some   

I like the expression "corporate psychosis"  a sort of shared psychosis.

Incidentally the key thing about "The corporation" is that they claim that many companies are psychopathic in nature but a form of psychosis "corporate psychosis" results from this.

<{POST_SNAPBACK}>

There is a theory that the entire recruitment and selection process lends itself towards psychopaths ie. charming bullies who can lie their heads off and have no feelings about damaging other people. The key to look for is people that suck up and kick down. There was a documentary in Australia while I was there and for the next week everyone was comparing psychopathic bosses they had known.

[sp1]

Dear all,

I'm trying to develop my understandings and profitable market participation. So while my views may be different they are not experienced or expert. But here is what my investigations into markets and making money from them leads me to present on the subject at hand.

Sledgehead is correct. The emotional detachment is an advantage only because you cant imagine how hard it is to sit on a winner and not gloat and fall in love with a stock or right call. The self ego and emotion (elation) has to be KILLED it is about killing the self ego that is paramount so that the market participant can be rational and close the position based on what ever strategy or methods or reasoning the said person uses. Beacuse at the time to sell the whole world thinks your god and you can be put under etreeeeme pressure not to sell.

Also. Please dont thinck that the fact that markets crash and losses at times are pervassive that all markets participants are all loosing when the markets looses. This is not the case. There are many many different types of market particpants. Some are purposefully ill-trained to do the job other wise many would leave the treadmill. Some would not but some would. At some level some one does a cost benefit analysis on waether to use firms and people who will get the total greater understanding. THey have a problem how do you develop enough workes with the right know how without killing the goose that lays the golden egg? The more discover the truths the more will leave the more you have to disseminate that golden knowlege (higher recruitment turnover if you chose to fully enlighten a higher portion of market proffesionalls)....eventually the size of knowledgeable participants out side the city firms will reach critical mass and they wont be able to fleece the system and con us all.

There are crowds within the proffessional too. Hedge fund managers are notorious for getting it wrong but if the lose less than the market that conssiderd good performance and they get bonusses. Absurn i know but thats the game. to make you thinck there the proffessionalls you cant do better than trusting them.

At market tops money pours into the prffesionals for "investment" and they dont even wait or keep some war chest for the crash to come cos they gotta go with the prffessional crowd.

MOst market roles that we would call traders are hard working "precessors" or cogs in a system. Then there are a few creative market participants, and even fewer are truly instictive participants and of cource there are sliding scales between (on the last group - can you imagine how much the emotion must be killed to trust and act instantly on ones instinct!! Not reasoning just pure gut and feel - try it with your career and real money - it will make you feel sick!).

BUt yeas the creative and instinctive ones that will make a killing in up or down markets have to know that most are gonna loose and wait in ambush for that loss. But its this pshycopathic? Or like HPC-ers who are unemotional about HPI forever and just rational and quick to change as the senario and inputs change.

On the other hand emotioal market participants are the ones who are worst cos they buy the tops and sell the lows cos they cant overcome the emotions of the most recent price action experience.

Sp1

Edited September 19, 2005 by sp1

[Elizabeth]

Your probably right. Psycopaths would make the best traders. But it doesn't make them the best human beings!

[penbat1]

Psychotic just means detached from reality and there are various reasons why someone could get psychotic - apparently some people get psychotic smoking the weed for example.

Psychopathy is a type of person with a characteristic pattern of behaviour which is likely to have a psychotic element. Essentially a psychopath is someone who has no conscience.

<{POST_SNAPBACK}>

Good post Elizabeth, psychopaths often have an unusually high level of charm, "a charm veneer" hence the existence of slimy salesmen and conmen etc.

Just to add a couple of points:

1/ Narcissism is a condition closely associated with psychopathy - there is a lot of overlap. Mr T. Blair is I think as strong candidate for the narcissist label.

2/ I think the dotcom boom was entirely a psychopathic phenomina and the house price boom was in large part a psychopathic phenomina. Some leading psycho traders obviously made a killing in the short term during the dotcom boom but the overal effect of the dotcom phenomina was a disaster for the general population.

Edited September 20, 2005 by penbat1

[penbat1]

Your probably right.  Psycopaths would make the best traders.  But it doesn't make them the best human beings!

<{POST_SNAPBACK}>

A good example is psycho trader Michael Douglas in the 1987 film "Wall Street". Charlie Sheen, however, was obviously a non-psycho trader with pangs of conscence.

[penbat1]

bump

[penbat1]

bump

[dogbox]

I'm not convinced, unless they're purely talking about bull markets: where even a monkey throwing darts can make good money. I've been reading about psychos as research for a movie script I'm writing, and I suspect they'd be far too impulsive to make money in a normal market.

I strongly diagree Mark.

Ive always tried to venture the argument that investing has a lot do to with seemingly contarevcial acts.

Most people would not for example mortgage thier entire home and put thier family at risk for the chance of making it, yet if you study countless highly sucessful entrepenuers / investors, thats exactly what they do.

Walt Disney put all his wealth at risk to fund the first feature length cartoon - Snow White. All around thought him mad and irresponsible. It went on to become one of the highest grossing films of all time.

Im convinced that most entrepenorial / risk taking investors have a screw loose.

Edited September 20, 2005 by dogbox