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My teacher often said "Energy follows thought." - I find it one of
the more difficult axioms to understand.
I think it is embodied in trading by 'positive thinking' ... Napolean
Hill and the classics of that kind.
brian_z
--- In amibroker@xxxxxxxxxxxxxxx, "Jan Malmberg" <jan@xxx> wrote:
>
> Hi,
>
> In response to the entire thread: Because there is energy, there is
law that
> governs it. No energy equals no law which equals no energy. This is
the
> fundamental truth of existence.
>
> Best regards / JM
>
>
>
> _____
>
> Från: amibroker@xxxxxxxxxxxxxxx [mailto:amibroker@xxxxxxxxxxxxxxx]
För
> sidhartha70
> Skickat: den 23 augusti 2008 11:43
> Till: amibroker@xxxxxxxxxxxxxxx
> Ämne: [amibroker] Re: 'Rule Based' versus 'Discretionary' trading...
>
>
>
> 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@xxxxxxxxx <mailto:amibroker%40yahoogroups.com>
ps.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@xxxxxxxxx <mailto:amibroker%40yahoogroups.com>
ps.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@xxxxxxxxx <mailto:amibroker%40yahoogroups.com>
ps.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 <http://en.wikipedia.org/wiki/Simplicity>
> .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@xxxxxxxxx <mailto:amibroker%
40yahoogroups.com>
> ps.com, "wavemechanic" <timesarrow@>
> > > > wrote:
> > > > >
> > > > >
> > > >
> > http://www.tradingm
>
<http://www.tradingmarkets.com/.site/stocks/commentary/lcbattlep/08272
0>
> arkets.com/.site/stocks/commentary/lcbattlep/082720
> > > > 04-39801.cfm
> > > > >
> > > > >
> > > >
> > http://www.tradingm
>
<http://www.tradingmarkets.com/.site/swingtrading/commentary/lcbattlep
/>
> arkets.com/.site/swingtrading/commentary/lcbattlep/
> > > > 09022004-39899.cfm
> > > > > ----- Original Message -----
> > > > > From: sidhartha70
> > > > > To: amibroker@xxxxxxxxx <mailto:amibroker%
40yahoogroups.com> ps.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@xxxxxxxxx <mailto:amibroker%
40yahoogroups.com>
> ps.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@xxxxxxxxx <mailto:amibroker%
40yahoogroups.com>
> ps.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
> > > > > > >
> > > > > >
> > > > >
> > > > >
> > > > >
> > > > > ------------------------------------
> > > > >
> > > > > Please note that this group is for discussion between users
> > only.
> > > > >
> > > > > To get support from AmiBroker please send an e-mail
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> > to
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> > > > >
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> > > > >
> > > > > For other support material please check also:
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> r.com/support.html
> > > > > Yahoo! Groups Links
> > > > >
> > > > >
> > > > >
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> > > > >
> > > >
> > >
> >
>
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