The Psychology of Risk (Ari Kiev)

Trader's Library #29 · Trading psychology. Traders' psychiatrist on how to act when you're afraid of risk.

Author: Ari Kiev · Original: The Psychology of Risk · Year: 2002 · Usefulness for traders: ★★★☆☆

What it's about

A psychiatrist who worked for years with traders at the SAC Capital fund describes how to take risk consciously: set ambitious goals, act despite uncertainty and not be paralysed by the fear of making mistakes.

What it gives a trader

Kiev shows that many traders' problem isn't too much risk but too little, where they actually have an edge. He teaches you to act according to plan despite discomfort. Brett Steenbarger, one of the interviewees in “Market Masters”, develops similar ideas.

Lessons for traders

• avoiding risk is also a decision, often a costly one (zero-risk bias, Atlas of biases #46)
• a goal makes sense if it changes your daily behaviour
• discomfort is the price of acting on your edge

What to watch out for

Written in coaching language, with a lot of motivation. The fund the author worked with was later embroiled in an insider-trading scandal.

Discussion

The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →

Navigation

← #028 Investment Psychology Explained (Martin J. Pring) · Library index · #030 Trading for a Living and Other Books by Alexander Elder →

Educational content, not investment advice. The book description is my own summary and assessment, not quotations. Edition details were checked in catalogues and bookshops, and where there was doubt I said so plainly.