Welcome To The Working Money

DISCLAIMER

DO NOT make any investments solely from information on this website. I am NOT a financial adviser, nor have any license to give any form of financial advise. All the data and information that can be found on this website are taken from other sources. I CANNOT guarantee the accuracy of any data here or its timeliness. Any previous result in this website does not guarantee future returns. ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING IN ANY SECURITIES OR OTHER FORMS OF INVESTMENTS.

Are Your Wired For Investing?

Have you ever wondered how Warren Buffett and other highly successful investors almost always makes the right decision when it comes to making money? Were they born differently, maybe their brain is simply wired to pick the best stocks at the right time. Ever since I started investing several years back, I've always wondered if I was born to do well controlling my investments such as stocks or bonds. This has led to me try and read as much as I can about how our brain can affect our investment performance.

There have been extensive studies on brain hemispheric dominance. A right brain dominant person tend to be "big picture" oriented as well as rely a bit more on feelings and hunches. On the other hand, left-brain people are detailed oriented and tries to follow logical, step by step thinking process. There are many tests online to determine which part of your brain is dominant (see links below). An interesting test is this animated image of a ballerina doing a pirouette (click on image to see full size). A right brain dominant person is supposed to see the ballerina rotating clockwise, while a left brain person should see it turning the other direction (counter-clockwise). My initial thoughts lean towards left-brain thinkers would make the better investors, but according to a study at Dartmouth which tested split-brain patients (those that can't process visual info on both sides of the brain at the same time), visual signals that can only be processed by the right brain hemisphere did 20% better forecasting a random event than those ...

Buy-Sell Timing Feedback Graphs

If you're a stock trader you've probably had many days where you want to hit your head on a wall for selling/buying a stock way too early or late. But psychologists have always noted that us human beings tend to remember things that are great emotional events, and if you invest in the stock market, these huge gyrations in stock price equates to those types of emotions. But these can be quite deceiving given that you would tend to judge your performance on few events that leaves an impact on you emotionally rather than see your overall trading performance.

A good way to track your buy or sell timing is keep track of those trades and then monitor the stocks price movements in a given time period before and after you execute the trade. This is where a spider graph is a perfect way to give you feedback of your overall trade timing ability. A spider graph has two axes, first axis is the distance from the center and the second axis is the rotation. So in essence, a spider graph is like a bullseye target. Our implementation using this type of graph looks at a trade and compares the trade execution price for 3 months before and 3 months after the trade date. The highest and lowest price for that specific security are then compared to the trade price, calculating the percentage difference. Given that to maximize your trade profits, you want to be able to buy at or as close to the lowest price and then sell at the highest possible price, the data points are obtained by looking at the trade buy price and then comparing this price ...