Shrink Rap: What You Aren't Conscious of Can Hurt You

Going on Tilt

Dr. Hendlin: It would be interesting to focus on what makes people (some of them highly skilled at making money) lose everything.

Before I started trading, I used to play a lot of poker -- I found it to be absolutely superb at developing discipline, risk control, objectivity, etc. There is an interesting term in that game called "going on tilt," which is when someone gets annoyed and plays in such a way that will, on average, lose money. They know it will cost them money, but they still do it, which seems completely irrational. I am pretty sure the same phenomenon is responsible for a lot of trading losses. If you can give some insight into what causes people to do that, it would be very useful to a lot of readers.

-- M.D.

Shrink Rap: I like this question because it invites us to delve into seemingly irrational, semiconscious behavior, thus pointing us beyond a logical explanation to a psychological one. ...