Overcoming learned helplessness
"Remember no man is really defeated unless he is discouraged."
– Bruce Lee, Chinese American philosopher
After a few unsuccessful attempts at ball trapping shooting stars and chewing dry bones, market participants find themselves at a loss, financially and emotionally. No battle plan, however well drafted, ever survived its first encounter with the enemy. The short side turns into an endless source of frustration, its logic defying logic.
Dogs are a man's best friend and unfortunately one of his favorite lab test subjects too. In a famous experiment, Martin Seligman, pioneer of the positive psychology movement, deprived dogs of the chance of reward. Randomness in the attribution of reward further deprived test dogs of hope. They gradually became apathetic. They stopped trying even when they had a clear chance of success. They just passed up "free-money" trades. Those dogs had learned helplessness...
