STA Monthly Meeting – May 2018
In 2007, the Chairwoman of Qantas, Mrs Margaret Jackson, was supportive of a takeover bid for Qantas at $5.45 per share. With acceptances of the offer waning, Mrs Jackson told the Australian Financial Review regarding the impending withdrawal of the bid, “If anyone thinks this will happen without affecting the (share) price then they have a mental problem with how the market works.” She received sharp criticism for her comments, especially from the mental health community. In addition, she was accused of underestimating the abilities of the shareholder, many of which were retail investors, to make a rational decision. By late 2013, Qantas (QAN) shares hit a record low of 96 cents.
Had Mrs Jackson suggested that those shareholders who failed to accept the takeover offer were subject to several cognitive biases including the Status Quo Bias, and the Endowment Effect, she may have escaped the criticism, even if few people understood what she was referring to.
Sadly, the term “Mental” has been hijacked in popular parlance to represent a slur on a person’s character, and is short for mentally ill. However, its original meaning refers to things of the mind, specifically intellectual (cognitive) and emotional.
During this session, Paul will demonstrate that all aspects of trading can be affected by cognitive biases in two key parts.
- How we trade; including mechanical versus discretionary trading, decision making and risk management.
- Why and what markets we trade, which trading platform / software we use, which instruments we trade with, which broker we use, and our approach to financial education and training.
Key to the presentation will be an attempt to model the cognitive biases together to demonstrate those we are susceptible to at each stage of the trade, rather than viewing them as distinct phenomenon as is typically the case.
Of course, options trading will be a key part of the discussion. Paul will suggest that the first trade any new trader should make is a long call.
Paul will demonstrate to the audience that trading is completely mental! Be prepared for a fun, interactive and informative session.
Paul McLaren is Managing Director of his own company, Enhance Your Options Pty Ltd, specialising in training and education of options trading strategies. He has over 20 years’ experience in the local share market, and has a keen interest on options on futures.
Next STA Meeting
STA Monthly Meeting – February 2024
Perry chats to Jeff Boccaccio about diversification, system trading, market selection and some thoughts on futures – and probably much more!
Perry chats to Jeff Boccaccio about diversification, system trading, market selection and some thoughts on futures – and probably much more!
Future STA Meetings
STA Monthly Meeting – February 2024
Perry chats to Jeff Boccaccio about diversification, system trading, market selection and some thoughts on futures – and probably much more!
STA Monthly Meeting – March 2025
STA Monthly Meeting – April 2025
Latest Blog Posts
- The Power of Patience: How Waiting for the Right Setups Can Make or Break Your Trading Success
- Mastering Market Trends: The Importance of Analysing Different Timeframes
- An Insightful Evening of Market Perspectives at ICAEW’s Chartered Accountants’ Hall
- How the STA ‘Technicals to Trading Systems’ course differs from other offerings
- The High-Performance Trader Learning Programme: Elevating Trading Excellence