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Ruth Barrons Rosevelt's book, Exceptional Trading, The Mind Game has an
interesting excerpt from a Scientific American article on Right/Left Brain
function which is very similar to trading. (BTW: I highly recommend the book!
Try the exercises no matter how silly they seem and you may be shocked at what
you learn about yourself and your trading.)
The experiement: A person sees two lights, one on top of the other and has two
buttons, one on top of the other. In each cycle, only one light flashes, the
top or the bottom (market up, market down?). Press the top button (buy?) if you
think the top light will flash next. Press the bottom button (sell?) if you
think the bottom light will flash next.
Unkown to the person, the top light flashes 80% of the time but in random
sequence. Obviously the top light flashes much more than the bottom light
but... Invariably people try to figure out a pattern! Even though there is
none. Adopting this left brain strategy, people are only correct 68% of the
time. Some of the pattern explanations were completely outlandish.
Animals on the other hand, with less developed left brain functioning, live
more in the unstructured present. There is no interperation, distortion based
on emotions or trying to find deeper meaning. They quickly learn to press the
top button all the time for an 80% success rate.
Where can I buy that monkey?
--- Bill Wynne <tradewynne@xxxxxxxxxxx> wrote:
> I agree, lots of that didn't make sense to me, but I think
> he's exaggerating to make his point. For me, one of the hardest
> things about trading is the waiting between trades, and then
> the need for instant action. It's difficult to get into the
> flow. In hoop, when a shooter is "in the zone," they say he's
> "unconscious." From what I've seen the best traders (assuming
> they have a good method/system) share this quality: they just fire
> away without a second thought when they get a signal. I wonder
> if the qualities that make the best system developers (curiosity,
> trying new things, tweaking this and that, ie., they think a lot) are
> sometimes different from those of the best traders (don't think, just do
> it). Obviously, you need a good method and the ability to trade it,
> so I guess that's why great traders are rare birds.
>
> BW
>
> >From: "Gary Fritz" <fritz@xxxxxxxx>
> >Reply-To: fritz@xxxxxxxx
> >To: "Bill Wynne" <tradewynne@xxxxxxxxxxx>
> >CC: Omega-List <omega-list@xxxxxxxxxx>
> >Subject: Re: Under financed trader seeking solutions to trigger pulling
> >issue
> >Date: Wed, 17 Apr 2002 20:28:57 -0600
> >
> > > >Toppel even thinks looking at charts focuses too much on the past.
> > > >You should "focus on the here and now and listen to the voice of the
> > > >market."
> > >
> > > Hmmm....I didn't look at it that way. I agree it was sort of
> > > "be here now," but I took from it that, whatever your method was,
> > > you should be focused on executing *this* trade and not letting
> > > yourself be effected by what happened on the last trade(s), or
> > > the news, or whatever.
> >
> >Yes, that too, but he says you should focus on the present moment to
> >the *exclusion* of all else, including history. Some quotes:
> >
> >"Charts are total gibberish. They have no validity. They are simply
> >history..." p. 19.
> >
> >"As long as the market is rising, it is safe to buy into it. ... How
> >do you know if a market is rising? Simple! Look at the last sale.
> >Is it higher or lower than the previous sale? If it is higher, it
> >must be going up." (Well, duh.) "Yes, it may go down again, but we
> >do not know that. Remember, all we are concerned about is what is
> >happening in the present moment. That's all that counts." p. 48.
> >
> >Buying any arbitrary uptick, with no knowledge of past market path,
> >seems suicidal to me. Especially if you have no better exit strategy
> >than "sell when it goes down."
> >
> >He does offer some useful concrete advice, but it's mostly trite
> >truisms: don't add to a loser, let profits run, cut losses fast, the
> >usual stuff. The meditation &etc suggestions are more helpful IMHO.
> >
> > > For example, the Zen of OddBall <VBG>....:
> > > "If stocks go up then buy;
> > > If stocks go down then sell;"
> >
> >Or the Zen of Will Rogers:
> > "Buy stocks that go up.
> > If they don't go up, don't buy them."
> >
> >:-)
> >Gary
> >
>
>
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