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If anyone tried out this test, you likely got one of two results:
1. Your results looked like a random walk with no particular bias.
2. Your results had a strong bias for a period of time until you
became emotionally drained, then they took on the character of #1
after that.
If you got result #1 there is no particular implications. It is what
science expected you to get.
If you got result #2 it has a striking lesson. However, it may not
be what it seems.
You might think that it means that with enough emotional desire that
you can influence the toss of a coin. Not likely! If you want to
test that hypothesis, let someone else flip the coin (with no motive
to influence it) and see what the results are. Very few people can
actually influence random outcomes like this. There are just a few
who have done it under laboratory conditions.
The likely explanation is that your intense desire and concentration
made it possible for you to bias the results by making minute
adjustments in the way you flipped the coin. With concentration, you
can increase the control you have over your muscles and exact fine
biofeedback adjustments in your control over the flip.
However, once you tired, your concentration relaxed and you could no
longer make the fine adjustments required to bias the results.
How does this apply to trading?
It shows how concentration to the exclusion of all else gives you an
edge in following the realtime price/volume action (becoming one with
the market) so that you are able to react without delay to the changes
taking place. Desire gives more energy to that concentration, but not
emotions like fear cancel it out.
It also shows that a lack of concentration when you are tired or
burned out or have many distractions can destroy your edge.
Is there such a thing as an X-Trader who can predict the future and
win big with trading day in and day out?
Though not impossible based on the nature of energy, mass, space, and
time as derivatives of a more fundamental reality, it is still highly
unlikely. Simply because, if a person has this ability, they would
not need to spend all day squeaking out a little edge in trading.
They could simply place a few big bets and be set for life, or a cheap
lottery ticket with the right numbers would do the trick.
And one more thing.
If your trading has become so automatic that it is like driving a car
through a familiar route, you may be a good trader today, but you have
lost your ability to improve.
It is the painful losses that are the reminder to wake up and
concentrate on the changes going on in the market. It is the power of
concentration that is at the heart of your ability to learn and change
the wiring of you trading algorithms upstairs. If you are using a
trading program, it also holds true, because the trading program is
just a reflection of your trading ideas transferred to the machine.
Welcome losses as an opportunity to refocus your energies on becoming
a better trader --assuming you didn't risk so much that you can't
recover.
No matter what happens, it is all just a game!
Best regards,
Dennis
On Aug 22, 2008, at 10:26 PM, Dennis Brown wrote:
> Brian,
>
> ...since you have brought up the subject of getting random
> results from flipping a coin, and much trading is based in the idea of
> random noise being a big factor, I propose a test.
>
> Get a piece of graph paper, a pen or pencil, and a coin.
>
> Your goal will be to flip the coin and record the deviation from zero
> on the graph paper to prove that it is NOT random.
>
> Find a very quite place with a rug where you won't be disturbed for a
> half hour. You should not have eaten recently.
>
> Put an X in the middle left box on the graph paper as the starting
> mark. When you flip the coin, you will be marking the next square to
> the right of the last mark. If you flip a Heads, you will be moving
> up one square. If it a tails, you will be moving down one square.
> This would normally be an example of a random walk graph.
>
> Put your mind in the most focused level of consciousness that you can
> for this test. In other words concentrate!
>
> The next step is the most important of all:
>
> Summon up the greatest emotional desire you can for achieving a
> singular result. That result is your desire for the line you are
> graphing to deviate from the starting point by as much as possible.
> Feel it in the pit of your stomach. That burning desire to influence
> the flip of a coin! Don't think, just desire!
>
> Flip the coin and let it land. Record your mark. Flip the coin.
> Record your mark. Feel the desire focusing your concentration ever
> more. Flip, Mark...
>
> When picking up the coin, do not return it to heads up, or tails up,
> just use whatever it landed on last as the starting position. Give it
> a good flip. Not just a few turns in the air, but spinning well.
>
> At some point, you will feel emotionally dry. You will not be able to
> keep up that emotional intensity forever (for me it is 20 minutes).
> Notice when that point happens and put a mark on the paper so you can
> see that point.
>
> For some the results of this test will give you a new perspective on
> yourself to think about.
>
> I devised this test 35 years ago and the results changed the direction
> of how I perceived many things after that.
>
> Enjoy!
> Dennis
>
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