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Neuroscience can help you trade better

A US study may explain how uninformed traders act on new information such that prices quickly come to fully reflect it

New York

A STOCK's price is ticking up and down on a screen in front of you. Do you rationally evaluate the probabilities that the price will rise before you pull the trigger on a trade? Or do you go with your gut?

You may prefer to think superior ability - that X-factor some traders appear to have - is rooted in the former scenario. But a few years ago, researchers at the California Institute of Technology (Caltech) went to the trouble of taking pictures of people's brains while they were evaluating trades. Surprise: As rational as you are, you probably opt for that gut feeling a lot.

Using fMRI (functional magnetic resonance imaging) scans, neuroscientists can identify which brain structures are...

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