Brian,
Interesting as always.
I'm not sure I see a difference between 'X traders' and 'intuitive
traders'... they are the same thing I assume?? Why classify them as
'X' traders when 'intuitive' is a term much more familiar to most?
You say,
"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."
I'm not sure I agree with that statement. I think a good, intuitive
trader can be processing far more information than you suggest, and a
much larger base of loosely based rules than you suggest.
To quote Steven Hawkins from 'Steidlmayer on Markets'...
"... you will begin to gain a feel for a market that enables you to
sense changes AS they occur, not after. You will develop the ability
to RECOGNIZE opportunies. You will learn to RECOGNIZE when you are
wrong BEFORE your dollar position tells you so. You will begin to see
that, when you have exited a trade early, it was usually the right
thing to do... In other words you become 'one' with the market."
I guess that's something approaching intuition. I remain to be
convinced that 'seeing a few seconds into the future' is anything more
than being 'in flow' with the market. Maybe zero delay, seeing things
AS they happen, not after, is enough.
I find it strange that you don't use more intution in your trading
since you seem to believe in its power and use it so successfully
elsewhere in your life.
--- In amibroker@xxxxxxxxxps.com,
"brian_z111" <brian_z111@...> wrote:
>
> > 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@xxxxxxxxxps.com,
"Ed Hoopes" <reefbreak_sd@>
> 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@xxxxxxxxxps.com,
"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@xxxxxxxxxps.com,
"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@xxxxxxxxxps.com
> > > > 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@xxxxxxxxxps.com,
"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@xxxxxxxxxps.com,
"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
> > > > > >
> > > > >
> > > >
> > > >
> > > >
> > > > ------------------------------------
> > > >
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