In another post where me, @arvindnrm @sabyasachi_sadhu and @haribabu were discussing about state of Indian economy, @arvindnrm made a statement in one of the reply that “every other person is buying iphone”. Afterwhile I was thinking like yes… this is indeed the case and even I feel the same. When I tried to look for the statistics supporting this view, I realised that No. it is not the case. In fact the iPhone ownership in India is lower than the car ownership. It’s just that my mind made me believe every other person owns an iPhone.
Psychology fascinates me. The way our mind functions. The mind, which controls our perception of the present, imagination of the future. My understanding of the psychology also greatly helps me in my trading. After all it is a mind game.
So coming back to the point, when I feel every other person on the street owns an iPhone -its actually a perception of my mind that triggers the emotion of “envy”. My mind successfully does a trick of “de-focussing” me on the vast majority of the people who only own simple phones in a market place or in a mall and instead “focusing” me on people who hold costly phones on their hand. Therefore I only “see” everyone who owns the costly phone and perceive that as “everyone owns an iPhone”.
After we entered a trade the mind triggers the emotion of “fear” as it did the emotion of “envy” when I was strolling in a mall. This emotion of “fear” makes us see all the red ticks on watch list, place stop loss very close or cancel the stop loss when the price gets near to it, buy options because we can’t lose more than premium. That’s how loss begets more loss in trading.
I like an old song by Madonna - “You only see what your eyes wanna see”