Yes. This is an interesting psychological issue really (on target with the topic of the thread). When we watch the market, we soon start to perceive nearly every move as potentially profitable and emotionally "own" it. As a result many people try to participate in the market action almost permanently, while conditions which favor high probability profit exist far not that often. Results in severe damage from overtrading. Patience is one of the key components of successful trading IMO. Vic Sperandeo wrote that (back in his years) there were 2-3 really good opportunities per day in the S&P futures on average. Some days none. That means often waiting for hours to see the correct setup to occur. Not the trait most people possess. In my recent experience with futures it's a bit higher frequency, cause I tend to grab quick momentum swings, but still not any close to "always in the market" style... not to say it can't be done, but for a newbie it's much safer to stick to a couple (even one maybe) setups showing up not so often, but offering good probability of profit with low risk. And a good idea also to not think or every market move as your own. It's just the move, it always moves. Doesn't mean anything. We better only care of the moves we take, not the moves we miss.
Losses can quickly eat up profits and then some. I'm amazed still how it may take a week or so to make a profit, then a few short hours can undo it. By filtering out higher risk situations, one doesn't trade so often, life gets boring but losses can shrink exponentially. I have a situation where I've tweaked an algo, profits are the same approx, much less trading, but the wins vs losses went through the roof. In other words, I've decreased risk on the same profit. Was 9 wins to 7 losses to now 6 wins to 1 loss (Result = three missed winning trades and 6 missed losing trades) Can be frustrating watching a trade make a profit and I'm not in it because of my heavier filtering, but when I'm in a trade I know the outcome is very high for a profit. They say successful trading is very boring, those who are using TA for all situations will discover they can never get ahead. For example RSI (I don't use) may work best when used at the very high or low levels eg 30-70 and take those the trades, but from 35-65 which is predominantly most of the time, then don't apply RSI signals to your trades. The 35-65 level may result in a high rate of losses which gives the appearance RSI doesn't work. This is just an example of corrupting TA with incorrect application. Warren Buffet's theory I think says; don't hardly ever buy, but when you have very HIGH probability, then hit it.
The last several pages have a lot of common myths stated as beliefs. Tape reading, today is not as serial as it used to be. Phoning in orders was a time consuming ritual where acucracy was a mutual responsibility. The frequency of trades just depends on your display and feeds. Multiple phone lines open all day. The PC brought a requirement for two disks (36") and signal meters and proper tuning adjustments. Graphing was hand done on drafting boards. The trader's main theme has always been data processing. The OP titled his thread with what he thought he discovered as a comment (judgement) of another psychologist or neuroscientist. Processing data is anything like but an art. As you read this thread you get to view beliefs/perceptions of others. Some members of ET are showing some growth toward the limitations they are also acquiring. At some point a balance of skills and limitations is reached. Knowledge and beliefs are associated with each, respectively. A recent inclusion of names of things juxtaposed a skill with a limitation. Another post qualified the value of portions of an indicator; this was a statement of a skill and a limitation. The degree of how closed the mind is to cognition, determines where the operating Balance is achieved in effectiveness and efficiency. You might be any one of six levels of skills in a given period of time where the final balance was achieved. Today, I assume most people took my decision to go long on the open. You made the market range, as usual on the first few trades(10 points on the ES e mini, nominally) by 10 to 12 bars into the day. Then you more than duplicated the range again within the first 30 5-minute bars where you knew the midday trading was beginning. No net change in market econometrics. Tape reading, for those who did not live in that era, was a continuous serial process. All skill levels were never bored. All traders who work to a good balance of skills and limitations, give up "jobs" since they are unnecessary for maintaining a lofty life style. A key "indicator" is the salary/commission ratio. Notable stages include unity and fractions containing 1 in the numerator and fibs in the denominator. 3 was my limit in the late 50's before there was no longr a numerator. Look back to fifth grade where you got your tablet of homework assignments for the year. I didn't know to not finish it in a month. So I was disciplined and my completed tablet was taken away from me for a while. An advanced beginner may be hypothsesizing and looking for confirmations. The skill /limitation thing. Can the cognitive grwoth continue? Yes, it must. A person may still be at the entry/exit level. Tape reading explains how to go beyond a point where confirmation takes place as a need. Indicators are "readable" at this point but they are slipping to midrange. For example. it now 12:30 on the chart and the lateral is 12 bars long and centered...... lol Market PACE has gone to ground. Ricj people are skiing or sunning (or waiting for their travel plans after the holidays) Wherever I am, people always think I am celebrating my birthday; I shake hands and acknowledge their bst wishes. Tape reading allows you to "keep confirming" and a limitation slides across the divide into the skill category and jacks down your salary/commission ratio if you still work. (note the people here who have jobs). 13 bars of a lateral. You are trading the subfratal since the hustle back on lat7.
Tape reading as a topic brings out the way the path is followed forward. potential trader first appears as the "observer" level. then beginner happens. Advanced beginer does have skills and limitations. All mechanics are understood and the clannishness of CW is scoped and bounded through reading and other media. Your broker has gone over the dashboard to complete the whole process of making dashboard mistakes. Beginning intermediate is revealing. You do confirm there is a lot you do not know. Most people are collectors during this time. They collect pieces. And they learn a lot about failure. There are few posts in this thread beyond this level of skill/limitations. The job thing is still in place for the OP and for the referent judge of tape reading. Remember that bio written by the BTL MTS turned HF worker turned Academic at a NYC college? This is beginning intermediate. BE trading is past and the annual net is 6 figures and an annual percentage around 20 to 50%. Intermediate is where "Putting the Pieces Together" does or doesn't happen. Size is still a fear. Trading size isn't done. Most people are overpowered by limitations. They have pieces and they can't put them together. The crashing of the symbols of CW OODA (cognitive) with the emotion set built (anxiety, fear and anger) makes the BALANCE steely in structure. A whole set of survival syndromes function as intrusive thoughts when IN the market. When on the sidelines ..... sexulal respites are often mentioned by those who cannot sustain information flow inward SINCE THE RESULTANT PERCEPTION SAYS ONE THING: I do not know what is going on ...... therefore, I make a call: THE MARKET IS RANDOM "IN NATURE". 16 bars to BO of the lateral. PM BO finally.
The open on monday is SHORT. The last three trades on Friday (21DEC12) were: Bar 73 reverse short, Bar 78 reverse long (on reduced margin) Bar 81 reverse short. we can all recognize that to most the first two comments are after the events (hindsight supportive information). The suggestion for making money by going in on the open is what is referred to as a "call". Just because all of my calls this week were correct, most people in the coin flip modus should not take my call as predicting their next flip of a coin (their CW OODA betting/hope non TA technique). Stat people need about 20 consecutive calls to have a "p" that complies with their "betting". They can fast track getting the p by googling prior to this week calls. (The period covered would be 55 years) Some past hi-lites would be the stats deemed by the SEC to mistakenly call my trading "insider trading" with statisitical significance.
The last skill/limitation levels are more interesting since most people only read about them and never meet anyone who is a practitioner, ever. They are: Beginning expert, Expert, and Advanced expert. For all of these, there are points along the skill/limitation Gaussian that deserve comments because they are significant measures that are observable. All these people get the four questions answers correctly. They can construct the questions from past market trading experience. I provided the Q's and A's in this thread. None are psycholgically based. All deal with the cognitive sciences and the practice of the Scientific Method. The CW OODA, below the neck emotion set is used by persons with a good place on the skill/limitations spectrum as a measure in the Present of "knowing that they know". The article in the 22DEC12 Economist on page 14 and entitled, "Rich Managers, Poor Clients" discusses traders/investors who work at jobs and do not, therefore, fit into the above categories. Note that Virgin is mentioned. Branson is a cat who knows how to take money away from others and carve his edge to be able to bait and switch effectively. The psychological status is such that the unconscious preception equation is always inforce and therefore, measuring emotions is done by calibrated "tinges" of the CW OODA sicknesses that are treated by workers in the emotional field. The neuroscience field has treatments as well. At least a person can put his past in order simply by looking at the values assigned to long term memories.(EMDR) All learning engenders long term memories. Some are single experiences gifted to a person (all are not expected). The weighty ones are occasionally appearing unasked for and so they are getting in the way. (intrusive thoughts). These values must be neutralized. People who not in this spectrum ask Q's like: well ..... if it isn't ______ , then WFT is it? This is NOT skepticism or cynicism. It is the CW OODA emotion set at play. (Not knowing that you know do to voids in knowledge and no past learning experiences to convert STM to LTM.) Science prevails. The Scientific Method has to be known and used, only. Just as science looks at all killers and does stats; it finds the same ratio of insane killers to sane killers as the ratio of people in these above categories to people below these categories. During war the same ratio of profiteers to war supporting occurs. The gaussian Taleb sees (and this Gaussian based on a different measure (skills/limitation measure)) has a fat tail differentiation. Fat tails are clues about doing measurements correctly or incorrectly Back to work Taleb). A mass spectrograph is clear because it generates markers. So does electrophoresis. What are the markers of Expertese. One is crossover trading and its single instrument equivant, reversal trading. Another is the recognition of the equivalance of exits and enteries. Giving the names to parts of trends stands out as well. Documenting the emergence of significant pattern analysis is a differentiable measure. An alternative more scientific is deducing the single trend pattern of the markets. Knowing the nuances of trends leads to algorithmic results using the answers to the four questions. As time leaves the scene and events replace time, then the true PM of markets is available. (Event rate of change of events). PM is a speed (velocity is propably left as a time related measure in physics) which is a vector and NOT a scalor. All events fall into two categories and the categories were discovered in parallel with DOW theory. The categories are orthogonal. And many many others. Learning to learn in market trading is learning to discover limitations and then creating LTM for them to turn them into unconscious Peception skills. The mind is automated to turn unconscious Perception into unneeded conscious Perception. This personal significant measure of the automated mind being operational is very significant. (See my past posts). The more or less final stasis is the fully differentiated mind. It is free even of tinges of the standard established status quo of the given skills/limitation ratio for CW OODA mytth driven minds. A fully differentiated mind operates in the supporting, comfortable and confident oriented emotional set. Markets are viewed characteristically as free of noise, flaws and anomalies. What happened cognitively with the neuroscience of building minds using brains was that: 1. Ends were discovered. 2. Segments followed one another. 3. The science of hypothesizing came s part of the Scientific Method. 4. A form of thought named "confirmation" temporarily filled an intellectual vacuum. 5. substantive content appeared between ends. 6. Ends became an identity. 7. OODA, fortunately never became into practice since the SM is not based on anything but conclusions that are proved. 8. induction never came into practice since deduction is used in the SM to develop and iteraively define proofs. 9. Sadly, as in engineering as differentiated from science, limitations sandbag skills in discover. The history of science and its tool, mathematics has always been plagued by limitations. Notice he before and after of the discovery of the place holding concept in the tool called numeration. 10. The trip of wholly defining markets, came about by using the SM. All the parts appeaared and have names and are defined by severl techiques which have names: criteria, filters, functions, rules and strategies. So the system of the operation of the market is there in high utility tooling. The other half was the trader (reread page 14), his stand in on the manual dashboard of the past is the linkage to the market and its ATS. Choose a fractal. Sense. Your mind does the sum to give you perception. You know you know within 10 to 100milliseconds. Repeat over and over on the cosen fractal. You decide if, on a RDBMS basis, if an event has occurred. If so you sweep the five OOE's that intermingle to decide if the olden days of the DOW th eory's parallel dicoveries give you either of the orthogonal mutually exclusive events sets. Continuation causes your behavioral action to record. An End Effect (one of 35) causes your ATS to earn that segments of profits in your account(s) and by the exit/entry identity, begin to accumulate unearned profit in the new HOLD of your olden days HOLD/REVERSAL philosophy of trading all based upon the symetric philosphy of history. Do a search on the philosophy of history of randomness. Oops, you stepped out of science into the world of myths of CW OODA.