I heard a lecture from a guy who'd made a fortune on a trading desk then got a Ph.D in psychology. Many of the same characteristics are going on with traders. B

I heard a lecture from a guy who'd made a fortune on a trading desk then got a Ph.D in psychology. Many of the same characteristics are going on with traders. But there's a twist. Since there's an arguable logic to trading, once a trader makes a good trade and experiences that high, in order to achieve a similar high the next time, the trade has to be more extreme. Each time he/she is convinced in their own intelligence. This pattern continues unabated (in the absence of meaningful oversight which is rarely given when someone's on a roll) until the trader blows up completely. His further commentary was that while the trader is going strong, huge rewards accrue to the trader and management. When it blows up, often, instead of instituting any meaningful oversight, the trader and management are fired, new people hired who have no institutional memory of the previous problem.