I haven't read Dennis Overbye's NYT article "Free Will: Now You Have It, Now You Don't" but it sparked my interest about 'free will' and how it might affect traders http://www.nytimes.com/2007/01/02/s...00&partner=rssuserland&emc=rss&pagewanted=all for instance some traders are biased toward trading Long and won't trade Short what causes traders to not 'trade their plan' then there's gut instinct / intuition second-guessing oneself are there free will constraints that allow such actions, deny others so is free will a stable or unstable entity if free will cannot be programmed â it's why 90% of traders lose but because of free will I can learn to win, win, win
It was a great article. I've been looking into this subject for a while and this article was a nice summary. This is one of those 'don't go there' subjects. Because the illusion of control is so ingrained and so many dreams are based on it that the exposure of the illusion naturally causes much denial. Here is a brief list of what you have no control over: the time and place you are born, your genetic code, the beating of your heart, the functioning of your brain, cellular metabolism, blood circulation, respiration, digestion, etc. These and other life processes make up 99.999999% of your life experience. You have no control over them. Even what you think you have control over: your thinking, your movements, etc. - you don't have any control over these either as the brain makes its decision to think and move before you even become aware of the thinking and the moving and before you even get that illusory feeling that it is actually you than is in control - when in fact you're not. That being said, I agree with Libet. We may not have as much free will as we think we do but we do have free will in the form of 'veto power'. We can all stop what we're doing. And once we do then as can see what we're doing (whether we have any control or not). And stopping and seeing is what meditation or awareness is all about. Being a calm (stopping) observer (seeing) of what's going on without judging it and without trying to control it is the only exercise of freedom available to a human.
llaterallus, having stated: " Even what you think you have control over: your thinking, your movements, etc. - you don't have any control over these either as the brain makes its decision to think and move before you even become aware of the thinking and the moving and before you even get that illusory feeling that it is actually you than is in control - when in fact you're not." how do you think 'free will / no free will' affects trading decisions ?
There is a saying "good luck is a function of good design." Luck plays the biggest role in success of any kind. As far as trading, no trader has any control over the market and no trader has any control over his equity curve. A trader can realize that by designing a trading plan in certain ways he can get more lucky. But he can't help constantly deviating from the plan. In that case all he has to do is use his veto power to stop any deviations from the plan. This is because deviation from the plan is the current discipline. No one has any control over conditioned responses but they can control their conditioning by 'stopping' and 'seeing'. Gradually the more deviations that are stopped and not adding to the more current discipline becomes adherence to the plan. He sticks to the plan now and people say "wow what a lucky guy". And he is.
Try Duct taping your hands so you cant trade! I have a friend named Mark who recently lost 80 lbs. When mark went on his diet he eliminated all of the fatting foods from his fridge. He calls the local pizza delivery joints and tells them not to deliver to 1515 Boxford Lane (address changed to protect the innocent). He makes his roommate promise not to bring him gooey treats. Forced discipline is the only thing that works for him. I know some traders like that. They can not trade without their emotions fouling up a perfectly laid out plan. I used to be the same way as well. Learning to program my rules with Java (eSignal EFS) helped me stick to my guns. All my signals got auto traded to the broker. Some days I sat and watched in horror, other days I slept in and let it play out without my intervention. I'm now comfortable trading signals based on simple audio alerts. I will not trade any system or set of signals without extensive backtesting then months on a paper trading platform. CajunSniper
"conditioned responses" surely they can be unconditioned and reconditioned ? You seem to be saying free will isn't controllable, it's perhaps essentially too free, has to be and can only be contained and controlled with absolute discipline. Sounds simple enough, so what's stopping the majority of the 90 % losers from being disciplined ?