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> Another possible irrational explanation is that some humans may have
> the ability to see the future.
Ed,
I feel I sold you short on this one so if you are interested in a
more detailed answer read on.
In my scheme of things there are no trader classifications, except
perhaps good ones and not so good ones.
If it helps us to understand our trading and/or become better
traders, by naming classes, by all means lets do so but if and when
we consider traders to be discretionary, we are, IMO deceiving
ourselves i.e. it is probably the most useless classification of all.
For the sake of the discussion - if there are otraders who can 'know'
things using faculties that other traders don't have then I would
call them XTraders (X == unclassified OR an unknown quantity).
Our culturally accepted paradigm is that we are thinking
(rationalising) and feeling creatures contained in a physical body
(vessel).
Culturally it is considered 'irrational' that anyone could function
with a faculty other than thinking or feeling i.e. people
who 'believe' this are sub-standard thinkers (perhaps they are
unbalanced by their emotions?)
In other cultures alternative 'levels of consciousness' are
considered the norm (consciousness that is above and beyond rational
thinking that is).
Specialists in this field don't consider these X faculties as
irrational - this term is reserved for a special class of sub-
rational consciousness.
As an analogy:
Rationality can be symbolised by a clear blue cloudless sky and the
sub-conscious mind as the clear deep green ocean.
The irrational elements of our 'mind' are floating on the surface of
the ocean, bobbing up and down like corks.
Collectively the corks are always in motion.
They are discrete and individual corks 'rotate' above and below the
water line. Their upward motion creates pressure on our conscious
mind and some leap out of the water, into consciousness, for brief
periods.
We call them irrational because they never come to full and complete
expression in our rational mind - it is not possible for them to
exist there autonomously because of the material that they are
constructed of (speaking symbolically they are half-formed creatures
from the deep).
They act somewhat autonomously from our consious mind and controlling
them is a devil of a job (the labours of Hercules).
Specifically they are products of our environment (upbringing/past
etc) that are exascerbated ny 'inherited' qualities (put two people
in the same stressful environment and one can develop a mental
pathology while the other person won't).
They can affect our trading by popping up as irrational behavoiur in
the heat of battle or by generally influencing our approach
(fear/greed etc).
The 'higher' level of consciousness (knowing) that I am personally
familiar with is the Intuition which I consider to be the 4th/seven
levels of consciousness attainable my Mankind.
Note that in our culture the term is used in different ways in
different cultures and that even amongst specialists in this field
their is disagreement over the classifications of consciousness and
the nomenclature.
I don't know how Intuition works, nor have I experienced the full
scope of it.
For me it works in different ways at different times and it is
dependent on how I manage it (if I am tired or don't pay full
attention the quality of what I 'perceive' drops).
It is not mind reading.
I experience it as a kind of 'super-rationality' i.e. given the same
facts that the rational mind possesses (yes I still have to read the
help manual) I can sometimes connect the dots in amazing ways and do
it instantaneously - I just consider I have done the rational anlysis
at a speed that my conscious mind couldn't keep up with.
According to the pundits other levels of consciousness are accessible
in the supra-rational mind.
The intuitive level of consiousness can be accessed via the abstract
mind and this is what many of the leaders of our culture do - it is
especially prevalent in those who are trained in/have a disposition
towards use of the abstract languages e.g.
maths,programming,philosophy, art, music etc where it is experienced
as INSPIRATION.
I haven't tried to be an Intuitive trader because I am quite happy to
use all of the resources available to me in a balanced way (combining
computer skills, rational thinking, inspiration and emotional control
in a synthesized package and I am doing fine with that).
Anyway, I can't seperate my learned experiences from my instinctive
experiences so I couldn't perform an honest test (if I tried to make
purely intuitive trading choices I could be biased by other more
mundane factors).
How does this apply to trading?
We can make a truly unbiased decision if we flip a coin (technically
speaking the decision is made by the coin at the moment it comes to
rest).
Coins don't have thoughts, feelings or X consciousness.
We do.
Whenever we make a decision it is almost impossible for us to measure
the degree that it is influenced by feelings, thoughts or XFactors.
Anything that influences our decision making places a condition on
it, so in a round aout way it is a rule.
That is why I claim that we are all rule based traders (unless we
flip a coin to make our trading decisions).
The differences come about because of the quality, number, format etc
of our 'rules'.
As a rule of thumb:
Writing down our rules is one way to quality control them.
Writing them in computer language is an even more definitive way
force them to logicality.
However we shouldn't assume that people who like to trade in a visual
way e.g. chart trading, don't have written or programmed rules OR
that people who haven't written down their rules are 'worse' traders
than those who do.
In all probability traders who haven't written down their rules are
using much simpler 'systems' and/or have automatically joined
together a few simple rules to make a set of easily 'remembered'
mental rules.
On that basis it is a bold asumption to say that they couldn't teach
it to others.
I dare say they can most likely teach it to a 15 year old a lot more
readily than they could teach them to autotrade.
It is a pretty fair bet that bad rules, unclear rules, or no rules at
all, is the source of most trading trouble rather than unwritten
rules or XFactor rules.
As for XFactor traders (if there really are any out there):
- they are still following a rules it just happens that they get them
from the fairy perched on the top of their computer screen (I guess
the proof of the pudding is in the eating).
Personally, I haven't made a decision to buy/sell based on an
intuitive signal AFAIK (if anyone is an intuitive trader then I would
be a good candidate).
However in real life I make intuitive decisions all of the time.
One way I use the intuition is that I sense it like a stop light in
the pit of my stomach - I can almost see it - red == stop/orange ==
caution, green == go.
Specfic examples:
I go to a website - I take one look at it - I read the first
paragraph of an article their - I get a red light - don't read
anyfurther - it saves me research time - reason == the level of
consciousness of the author is too low - they couldn't possibly write
anything about trading worth reading (sorry but it isn't anything
more romantic than that).
In other cases I use the intuition in more advanced ways but that is
a very long story.
I hope that helps a few traders sort out their thoughts.
"If we are saying it, we are thinking it.
If we are thinking it, we are doing it".
If we are sloppy with our trading nomenclature?
brian_z *:-)
I am very sorry but I can't answer private emails to my public email
addresses - many of them get lost amongst the spam anyway.
Also I apologise deeply but I do not 'take' students.
FTR I teach the 'middle way' (not in a sectarian way) and I do what I
can publically.
--- In amibroker@xxxxxxxxxxxxxxx, "Ed Hoopes" <reefbreak_sd@xxx>
wrote:
>
> Another possible irrational explanation is that some humans may have
> the ability to see the future.
>
> In competitive sports some players just seem to know what their
> opponents will do. Maybe the same is true of some successful
traders.
> They can't explain it rationally, but they "just know it"
>
> Reef
>
> PS
> Unfortunately, I don't have this trait.
>
>
> --- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@> wrote:
> >
> > From the 2nd article:
> >
> > "Paul Taglia sees high-probability Window set-ups that the rest
of us
> > don't. I've seen him do this for nearly two years. He can't
explain
> > it...he simply says that he's looked at thousands and thousands
of
> > charts over his career and some charts simply look better to him
than
> > others. We once asked him to keep a journal to see if we could
> > systematize what he saw. It was a useless exercise. He sees it
but he
> > can't explain it."
> >
> >
> > According to Occams Law the simplest explanation is usually the
best.
> >
> > http://en.wikipedia.org/wiki/Simplicity
> >
> > Possible explanations, of Paul Taglia's discretionary style are:
> >
> > a) He can 'see', or sense, the future in the charts,
> > b) he has a set of rules that he learnt in the past (based on
> > experience) and they have become second nature - possibly he has
> > forgotten what they are or when he learnt them (or at least some
of
> > them)
> > c) he has a set of rules, and he knows that, but this is an
excellent
> > posture to take if his game plan is never to reveal them to anyone
> > d) he has a set of rules but has a playful nature OR likes to
take
> > the mickey out of his associates OR has a superiority complex and
> > disdains the idiots who surround him
> > e) he has an inferiority complex and needs the boost that comes
from
> > the adulation of others - this is an excellent strategy to
establish
> > mystique as a trader and achieve legendary status
> > f) it is a great way to market ones employment value in a
transient
> > workplace (its a resume that can't be questioned to any extent
either)
> > g) some combination of a-f
> > h) he has a set of rules (some conscious, some sub-conscious) but
he
> > can't be bothered explaining them (it is a form of energy
> > conservation - an alternavtive version of this is that he could
be a
> > very focused trader and has eliminated the non-essentials, like
> > defining his style OR chatting about his style.
> >
> > BTW irrationality is the common name for the shadow (I used the
> > symbolic name).
> >
> > There is no irrationality in maths, programming etc which is
probably
> > why I quite like programmers etc.
> >
> > Trading myths are born out of, and perpetuated by irrationality.
> >
> > brian_z
> >
> >
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "wavemechanic" <timesarrow@>
> > wrote:
> > >
> > >
> >
http://www.tradingmarkets.com/.site/stocks/commentary/lcbattlep/082720
> > 04-39801.cfm
> > >
> > >
> >
http://www.tradingmarkets.com/.site/swingtrading/commentary/lcbattlep/
> > 09022004-39899.cfm
> > > ----- Original Message -----
> > > From: sidhartha70
> > > To: amibroker@xxxxxxxxxxxxxxx
> > > Sent: Wednesday, August 20, 2008 10:52 AM
> > > Subject: [amibroker] Re: 'Rule Based' versus 'Discretionary'
> > trading...
> > >
> > >
> > > I think you're right Brian. We do all use rules of some sort.
> > >
> > > But I guess discretionary traders don't use 'hard and fast'
rules
> > and
> > > can't always define the same set of rules by which they
choose to
> > > define an entry or exit.
> > >
> > > For example, as we all know, something as simple as defining
a
> > trend
> > > programatically can be more problematic as you might at first
> > think.
> > > However, a good trader can see very quickly what state the
market
> > is
> > > in by looking at various time frame of chart.
> > >
> > > Likewise, divergences of various sorts can be easy to see
with the
> > > naked eye but difficult to code in their entirety.
> > >
> > > Like driving a car, or a golf swing, you learn the 'rules'
but
> > when
> > > you get really good you are no longer thinking rules... you've
> > > effectively let go of the rules and are just 'doing'...
> > >
> > > --- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@>
> > wrote:
> > > >
> > > > Here is my definition:
> > > >
> > > > We are all rule based traders.
> > > >
> > > > Mechanical Traders are a specialist group who have
programmed
> > > > computers to autotrade their rules OR automatically
announce
> > their
> > > > rules via computer communications (audio, email, chart
prompts,
> > > > spoken text etc).
> > > >
> > > > I am prepared to continue the discussion with any seers,
> > inituitives
> > > > etc, who come forward, and adjust my definition to meet
> > anything new
> > > > that comes out of that.
> > > >
> > > > In advance I admit to the possibility of exceptions to the
rule.
> > > >
> > > > brian_z
> > > >
> > > >
> > > > --- In amibroker@xxxxxxxxxxxxxxx, "brian_z111"
<brian_z111@>
> > wrote:
> > > > >
> > > > > >Descretionary traders make decisions that are based on
> > personal
> > > > > >knowledge and circumstances, perhaps using many factors
> > unknown to
> > > > > >themselves. Like which journal they read the night
before.
> > > > >
> > > > > This is the nub of the question for sure, and the point
that
> > I am
> > > > > investigating.
> > > > >
> > > > > I suspect that when they (self-nominated DT's) think they
are
> > > > making
> > > > > discretionary decisions they are in fact making rule
based
> > > > decisions.
> > > > >
> > > > > That is why I asked for specific examples
of 'discretionary'
> > > > decision
> > > > > making e.g. I haven't seen Bilbo's chart yet but I
consider
> > it
> > > > highly
> > > > > unlikely that the decision about whether a trend is in
place
> > is a
> > > > > discretionary decision - I can define a trend in several
> > different
> > > > > ways - all of them can readily be written as a rule (in
words
> > or
> > > > with
> > > > > code) - I don't care if the definitions are 'correct' or
not
> > as
> > > > long as
> > > > > the system that they are part of works i.e. my rules for
a
> > trend
> > > > depend
> > > > > on the context.
> > > > >
> > > > > As Dennis said, our rules might be difficult to program,
> > causing us
> > > > not
> > > > > to automate the trade, but mentally we are still running
the
> > rules
> > > > and
> > > > > if we are honest with ourselves we do know what the rules
are.
> > > > >
> > > > >
> > > > > >For a novice traders to try and mimic the techniques (of
> > > > Discretionary
> > > > > >Traders) without
> > > > > >having similar backgrounds merits caution.
> > > > >
> > > > > What I am suggesting is that, over time, the sub-
conscious
> > mind
> > > > will
> > > > > automate what was intially habitual conscious behaviour,
and
> > even
> > > > make
> > > > > some improvements on it, so that 'we' can skip the
conscious
> > part
> > > > for
> > > > > some 'tasks' e.g. driving the car becomes second nature.
> > > > >
> > > > > That won't happen for new traders, in a short time, so
they
> > do need
> > > > to
> > > > > persevere, be patient and not try to mimic people who
have
> > been
> > > > around
> > > > > for years.
> > > > >
> > > > > IMO formal (written) rules based
> > trading/backtesting/optimization
> > > > is
> > > > > the best place to start - it grinds the basic lessons in
very
> > well.
> > > > >
> > > > > If anyone can look at a chart, and without recourse to
any
> > rules,
> > > > know
> > > > > which way the price is going to move and trade
successfully
> > (long
> > > > > term) on that basis then that is something else
altogether.
> > > > >
> > > > > If it is at all possible to do that then it definitely
can't
> > be
> > > > taught.
> > > > >
> > > > > That is why I asked, "Anyone doing it?".
> > > > >
> > > > > It is just like >100%PA returns - anything is possible
but
> > once
> > > > someone
> > > > > confirms that they have done it then it moves from the
realm
> > of
> > > > > possibility into reality.
> > > > >
> > > > > In the meantime I will stick to my guns by saying
> > that "except for
> > > > > people who KNOW what the price is going to do everyone
else
> > is a
> > > > rule
> > > > > based trader and categorizing traders, as DT's or MT's,
is
> > > > arbitrary".
> > > > >
> > > > > brian_z
> > > > >
> > > >
> > >
> > >
> > >
> > > ------------------------------------
> > >
> > > Please note that this group is for discussion between users
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> > >
> > > To get support from AmiBroker please send an e-mail directly
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> > >
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> > >
> > > For other support material please check also:
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> > >
> > >
> > >
> > >
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Date:
> > 8/20/2008 8:12 AM
> > >
> >
>
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