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Actually I'm not so sure that "doing something that doesn't work ovre and
over again" is a good definition of insanity. It could also be the
definition of a Scientist or a Comedian.
Insanity or psychosis is simply defied as any mental disorder in which the
personality is seriously disorganized. A psychotic personality is defied as
a person characterized by emotional instability, lack of sound judgement,
perverse and impulsive (often criminal) behavior, inability to learn from
experience, amoral and asocial feelings.
Brent
-----Original Message-----
From: Dennis Conn <dconn@xxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Wednesday, March 10, 1999 3:17 PM
Subject: Re: Trust=great system???
>Dick Webb wrote:
>
>>Does anyone have experience with asking yourself questions that lead
>>to good answers?
>
>As regards systems fine-tuning, no. As regards psychological shortcomings
>which affect trading results, yes. For the benefit of those who are new to
>trading, here is my offering.
>
>Flashback:
>
>Several years ago, I bet on pro football - excessively. After writing an
>involved program to factor all the variables I felt were necessary, I
>backtested a few years of data and decided to give it a shot with real
>money. During the first 3 - 4 weeks of each season, my winning percentage
>exceeded 75% (betting only $100 per game). Then I'd get cocky and forget
>about money management and discipline - I'd start to bet $500 - $1000 per
>game and that week I'd lose 5 out of 6 wagers. Then I'd have to suck it up,
>go back to $100 - $200 per game, and spend the rest of the season sweating
>it out right through the Super Bowl just to break above even for the year.
>This cycle continued season after season, and even though my winning
>percentage was over 60% each year, my bankroll didn't increase by more than
>5% in all that time. To avoid the stress on my marriage, I decided to stop
>gambling.
>
>Fast forward:
>
>Some years ago (and since my football gambling), I learned about a great
way
>to make money - commodities! After paper-trading for some time, and
>backtesting several months worth of data in most of the markets, I decided
>it was time to give it a shot with real money. Over the first 4-5 months,
my
>winning percentage was over 85% - then I got cocky, forgot about money
>management and discipline, and decided to write a number of calls in a
>market that decided it was time to explode. After giving back just over
>half my account, I decided to go long a few contracts in feeder cattle. I
>could have sworn there was about to be a fifth wave advance, but what I
>thought was just a fourth wave correction never stopped - and neither did
>the margin calls. After stampeding downhill for a few days, those cows
>decided to jump off the edge - the gap down on that final morning's open
>took the rest of my account and put me into debit. As a result of the
>sleepless nights during the call-writing and nearly vomiting when watching
>the feeders gap down, a number of questions occurred to me. Over the next
>several months, I had to face a few hard facts about myself - so to get
back
>to the subject of questions, here are mine with the answers I had to
>contemplate.
>
>1) Do I rely too much on luck as opposed to skill? Answer: Yes
>2) Am I trading or just gambling with my money? " : Gambling
>3) Do I have a gambling problem? " :
>Yes
>4) Do I want to be a gambler or a trader? " :
>Trader
>5) What do I need to change? "
>: Self-discipline
>6) Have I ever demonstrated self-discipline? " : No
>7) Is it possible for me to be disciplined? " :
>Yes
>8) Can I take responsibility for my trading results? " : Yes
>
>I think it was Brent who once pointed out that doing what doesn't work over
>and over again is the definition of insanity. If I ask myself those
>questions now, the answers that need to be different are different, with
one
>exception: I still honestly believe I have a gambling problem, because it's
>still hard to take those losses when I know I have to exit a trade that's
>not working. I am disciplined enough to take the loss anyway, and I don't
>risk an inordinate amount of my account on a trade. Maybe someday, I'll be
>happy with all my answers to these and the other questions I haven't yet
had
>to face - I guess learning the truth about oneself is the biggest part of
>becoming a successful trader and, more than even the potential profits, can
>be the most enjoyable part of the game. The truth does set you free, but
>only if you're willing to accept it.
>
>Regards,
>
>Dennis C.
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