This is quite an in depth and technical paper which looks at the way a change in perception or reappraisal of risk/reward alters the performance of participants. From my perspective the most important part of the paper is the following –
During the session you will see the word Loss and the word Gain appear onscreen. We would like you to think about the monetary incentives in different ways when you see these words.
When the word Loss appears on screen (see image below), you should regard the monetary incentives shown at the beginning of each round as “your” money. Imagine the amount, in cash, sitting in your pocket as you complete the round. Imagine that, if you are successful on the round, you will get to keep your money, but if you are unsuccessful, you will have to give this money to the experimenter. Imagine how it would feel to lose this money. You should continue to think about the incentives in this way throughout each round until you see the word Gain appear on screen.
When the word Gain appears on screen (see image below), you should imagine that you begin each round with no money in your pocket. Regard the monetary incentive as an amount of money that you have the opportunity to win. Imagine that if you are successful on the round, the experimenter will give you this money, in cash, but if you are unsuccessful you will end the round as you began—with nothing. Imagine how it would feel to gain this money. You should continue to think about the incentives in this way throughout each round until you see the word Loss appear on screen.
Please do your best to think of the incentives in these ways throughout the session.’
This is quite a simple trick to get participants to not necessarily re frame their perceptions but rather to reappraise the impact of their perception. What the experimenters found was that this reappraisal scheme lead to an improvement in performance. If we put this into the parlance of traders one of the great issues traders have is the emotional investment they have in their decision making process. This is understandable since the consequences of each action is a strict monetary gain or loss and our attitude towards these outcomes does have an impact upon the outcome. Traders often choke either at the initial stage of a trade – they cannot pull the trigger or at the terminal phase when they are required to exit.