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Device Protects Day Traders From Emotional Trading
Philips Electronics, a Netherlands-based company, has come up with a device designed to protect day traders from emotionally based trading decisions. The Rationalizer measures your galvanic skin response and lets you know when you are under stress. An online trader can then take a "time-out, wind down and re-consider their actions," according to the company. This may have come too late for us, but at least future generations won't have to live through the horror of angry day trading.
. . . and trust me, giving them a device that will tell them when they are stressed is about as useful as taping a stethoscope to their chest so they can check whether their heart is beating.
Day traders are *always* stressed. Always.
Day traders create and provide liquidity.
Read, refresh, repeat.
I'm a trader by profession (although not a day trader) and making emotional decisions is about the worst thing you can do. The only worse thing is NOT making a call because you happen to be excited.
It's a learned behaviour, but a trader needs to be able to abstract away from the trade. You almost need to pretend that somebody else is doing the trade and you're just watching. I think any trader who stays in the job learns this skill eventually. The first time I traded a few million dollars of risk, I was down to few last red cells in my adrenaline stream. If I kept going that way, I'd be either an unemployed or an alcoholic (or most likely both). Instead I learned not to take it too personally. Now a large trade barely increases my pulse.
I don't think a device can replace this behaviour. In a fast market my heart may be way up due to working on several things at once and trying to keep up with the information. I still need to make trades, I just need to stay rational. A glorified heart rate monitor won't help with this.