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At 12:46 PM 2/12/99 EST, OatTrader@xxxxxxx wrote:
>RT's,
>
> Usually, when I get a feeling or a bias, 90% of the time I'm wrong, so
>when I do get the "feeling", I take a walk till I lose it. I just stick to my
>time tested rules and trade accordingly. The problem I would have with
>"feeling", is that I can't test it. Now there are some traders who can trade
>with intuition, and I applaud them because I can't, but most traders that I
>know all need good rules or methods to carry out trades.
>
>Oat
Oat,
Yes, two very valid perspectives of the same issue! One is to trade
with you mental bias, the other is to suppress the bias by trading
without it.
I suggest that a combination of the two is optimum. The brain
is an amazing tool ( actually a type of "technical" indicator too,
it's a pattern-recognition indicator ).
When we are able to determine a "feel" for the market, we should
apply rules to use that mental indicator effectively.
For example, you are already doing this. Your rule is to
take a walk and ignore your mental indicator. This may
be the best for you. But since your market intuition is
"wrong 90% of the time" (as you said), it might be even
better for you if your rule was to trade AGAINST your
mental bias (to fade it).
For other traders, if they receive a bullish signal from their
market intuition, they should trade that signal, but with
firm rules. These rules could require that the position be closed
if the market does not confirm the bias, and other rules governing
entry, exit (profit objectives), stop-loss, risk control (money-management),
etc...
This is the way of discretionary traders. By combining mental tools,
mathematical tools (software), and mechanical rules, we (strive to)
find our edge in this competitive environment.
Thanks for sparking some thoughts on this.
-Neal.
-----------------
Neal on the 'net.
Trade well. Train hard.
http://www.halcyon.com/neal/
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