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• Our response to “A Cryptocurrency Without a Blockchain Has Been Built to Outperform Bitcoin” | MIT Media Lab
• Train your brain: How to address the mental challenges of an ultra, from training to racing | Trail Runner Magazine
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• Society Hits A New Low: The ‘Selfieccino’ | NPR 

• Star Wars science: Sci-Fi syndrome, Neuroprosthetics, and Luke Skywalker’s hand | Neuwrite
• ‘Diet’ products can make you fat, study shows | UGA
• Being an excellent listener is all about empathy | The Cut 
• Looking at the top 70 altcoins by the problems they’re looking to solve | Jon Holmquist
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• The fear of losing control — and its role in anxiety disorders | Concordia
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• The piranha problem in social psychology / behavioral economics: The “take a pill” model of science eats itself | Andrew Gelman

• Want to be successful and happy? Restrain yourself: USA Today  
• ‘Let the soul dangle’: how mind-wandering spurs creativity: Aeon
• How to train like James Bond: Telegraph
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• A trail runner’s paean to Bears Ears: Sierraclub
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• Body Mass Index and risk of dementia (PDF): Elsevier
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• How the loss of U.S. psychiatric hospitals led to a mental health crisis: NPR

• Intermittent fasting and manipulating mitochondrial networks may increase lifespan: Harvard Gazette
• Activity in brain’s thinking and problem-solving center linked to avoiding anxiety: Duke University
• Our minds wander a lot, on average a third of the time: UNCG
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• Chasing the rainbow: The non-conscious nature of being: Frontiers in Psychology
• Awesome new podcast from Billy Yang with Magdalena Boulet: Soundcloud

• The three rules of neural networks: Psychology Today
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• Inactive kids and screen time: Are parenting styles to blame? Medical News Bulletin
• Group exercise improves quality of life, reduces stress far more than individual work outs: Science Daily

Success as a flexible trader combines both a willingness to be flexible and adapt to a given situation along with self-efficacy in being flexible. In other words, being prepared to change your thinking while believing that you can change it and that the results of doing so will improve your situation. Cognitive resistance to change occurs when we imagine failure rather than the act of failing itself. If multiple instances of failure to change occur, especially for the same situation (as in a string of losing trades), one’s cognitive flexibility is dampened as self-efficacy takes a hit.

I’ll be discussing this topic in greater detail at the Trader’s Expo in Las Vegas next weekend. Those that attend my presentation will learn more about a working model of mine that I use to help others achieve success.

As a recap, the IGT involves four decks of cards where the subject is asked to choose a card from one of the decks in any sequence. With each turn of a card you either won or lost money of varying values. Sustained playing of certain decks led to large losses but also had large wins while playing other decks would lead to small but consistent gains. Over the years research has shown that most participants do not appear, at least explicitly, to understand the complex contingencies of the game. However, some participants are able to quickly develop “a feeling” about which decks are winners and which decks are losers.

Judgmental processes involved in risk perception and decision making have traditionally been conceptualized as cognitive in nature, being based upon a rational and deliberate evaluation of the alternatives at hand. It wasn’t until the early 1980’s when researchers began to look beyond the rational, deliberate, and cognitive processes of decision making. This new vein of research that was occurring focused instead on the intuitive, as opposed to deliberate, and emotional, as opposed to cognitive aspects of decision making.

Our instincts are keenly alert and risk averse to loss so much so that we are more motivated to take action (pick a card from a certain deck) based on the fear of losing rather than anticipating a gain. Further research using the IGT has shown that we respond to unconscious signals of danger. In fact, the unconscious acts more quickly than the conscious mind. Interestingly enough, much of what Kahneman refers to as system 1 thinking occurs unconsciously.

More recently, the Iowa Gambling Task has been shown to measure an aspect of mental function which belongs in the domain of Executive Function (EF). In other words, the IGT is concerned with decision-making and complex problem solving which occur in the pre-frontal cortex of the brain. I’ll be discussing Executive Function in more detail next month at the Traders Expo  in Las Vegas. If you’re able to attend please let me know as I’d like to meet as many readers as possible.

How much does instinct come into play in your trading decisions? Probably more than you’d like to admit. I’ll post a follow-up to this question later. For now, take some time to find out for yourself by clicking here (There’s supposed to be a chart at the end of the task but for whatever reason it’s not showing up. Don’t worry about the chart as it’s not what I’m writing about).