I Think, Therefore I Act
But What Actually is Thinking?
"Thinking" is any string of words or images in your mind that involve processing information, making connections, or engaging with concepts. Involuntary or automatic thoughts, the stuff that just happens in your skull without effort, like little mental wet dreams, are still considered thinking. But in sports trading, where decisions have financial consequences, passive thinking is a problem. Deliberate thought is Captain Cook at the helm, charting a course, adjusting the sails, and steering through the currents with intent. Every decision is purposeful, aimed at reaching a goal. Whereas passive thought is a raft drifting down a river. It moves with the current, carried by external forces, without a destination or guidance.
Daniel Kahneman's Thinking, Fast and Slow introduces the concepts of System 1 and System 2 thinking. System 1 is fast, intuitive, and automatic—based on patterns and gut feelings. Whilst useful for identifying patterns, System 1 thinking often leads to biases like overconfidence or anchoring. Carl Jung would call System 1 thinking "intuition."
System 2, on the other hand, is deliberate and tries earnestly to be logical. It requires conscious effort to process data, analyse situations, and make decisions. Traders who rely on System 2 thinking engage in a more thoughtful, evidence-based approach. They might take more time to analyse the broader context of a trade, weigh different variables, and assess probabilities before making a move. Carl would call System 2 thinking simply "thinking."
Carl's Psychological Types outlines two distinct types of deliberate thinking: introverted thinking (Ti) and extraverted thinking (Te). Both types play a role in sports trading, but they lead to different trading styles and challenges.
Ti is characterised by internal analysis and precision. A trader with dominant Ti thrives on understanding the mechanics of the market, data, and patterns. This trader might take a long-term approach, analysing a team's performance under various conditions, statistical trends, and underlying market behaviours. Their trading style is methodical, focusing on refining models and developing strategies over time. For example, a Ti-driven trader might spend hours reviewing past matches to identify statistical outliers, such as a football team's strong performance against specific types of opponents or conditions. However, Ti traders can encounter problems when action is required. Their preference for deep analysis sometimes leads to over-thinking and delays in making decisions. They might miss opportunities whilst they're still processing stuff.
Te types, on the other hand, value efficiency, action, and results. They tend to follow well-known systems over individualised analysis. Therefore, their trading style is more pragmatic and responsive: they get shit done. Because of this, Te traders, can often be rigid and liable to rely too much on existing systems. Also, because Te dominants value timely execution, they may act on incomplete information and make impulsive trades to avoid missing out on perceived opportunities. Instead of pausing to reassess in chaotic situations, they may double down on existing strategies, believing that action, even if miscalculated, is better than inaction. Te types are the most likely to lose money because of FOMO (fear of missing Ozark).
Being a Ti type, I done a little summary table:
| Aspect | Introverted Thinking (Ti) | Extraverted Thinking (Te) |
|---|---|---|
| Trading Style | Analytical, model-driven, focused on internal logic and precision | Action-oriented, system-driven, focused on external efficiency and results |
| Advantages | Deep understanding of market mechanics Creates robust, data-driven strategies | Quick decision-making Leverages established systems and market trends |
| Drawbacks | Risk of over-analysis and delays May miss fast-moving opportunities | Can be rigid and impulsive Overreliance on trends, potentially missing anomalies |
So…
Traders must prioritise System 2 thinking—deliberate, logical, and analytical—over System 1 thinking which is prone to biases. System 2 thinking encourages traders to slow down, analyse data properly, and make evidence-based decisions, reducing the likelihood of expensive mistakes.
Understanding the types of deliberate thinking—introverted thinking (Ti) and extraverted thinking (Te)—helps traders recognise what their strengths are whilst mitigating their potential disadvantages.
By combining the strengths of both styles—Ti's depth and Te's responsiveness—traders can develop a balanced approach that leverages deliberate thought while remaining flexible and adaptive.
Think about it.
