Description
Traders are said to act rationally, but quite often they make irrational decisions. Emotions, mental traps, heuristics, framing and biases play a crucial role. The fear factor, greed and stress also impact choices. It impacts the performance and it may even lead to unethical behaviour. Managers and Learning and Development teams should consider the psychological side of markets and trading in order to function optimally. Compliance officers need to take context into account when developing or enforcing the company’s compliancy framework. It has to control everyone, not just the bad apples, because everyone can show unethical behaviour. Traders should structure their work and follow a plan that fits them. This way they create consistency. It also allows them to cope with losses and the feelings that come along with it. Next, ego has to be managed and traders need to manage their self-confidence. Indeed, it all starts with becoming more aware of oneself. Self-knowledge is crucial, especially if one needs to control himself.
