Your Brain Can Work Against You – While Prop Trading

Despite yoga and meditation, your brain can work against you – naturally. But by knowing the potential dangers, you can increase your awareness and avoid the trappings, according to a study by LiveScience.

To test the effect of dopamine on decision-making, Ray Dolan, also of University College London, and colleagues carried out a test with 14 healthy volunteers under two conditions: once when given a low dose of L-dopa and once when given a placebo. Under each condition, the subjects were asked to make a number of choices consisting of either a “smaller, sooner” option, for example receiving $22 (£15) in two weeks, or a “larger, later” option, such as receiving $86 (£57) in six months.

[The “smaller, sooner” versus the “larger, later” got me thinking about the trade-offs between day trading “smaller, sooner” and long-term trend following “larger, later.”]

Every subject was more likely to behave more impulsively – choosing the “smaller, sooner” option – when levels of dopamine in the brain were boosted. On the whole, the number of sooner options chosen increased by almost a third in the dopamine scenario, although each subject varied on this measure.

“We know that sensory inputs – sights, sounds, smells and anticipation of rewards, or even of neutral cues which have been associated with rewards – momentarily boost dopamine levels in our brains, and our research shows that higher dopamine levels make us act more impulsively,” Dolan said.


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