Thank you for sharing, very informative talk. delayed gratification and pain avoidance are interesting concepts: letting profits runs and taking lots of small losses. The speaker says studies show most people do the opposite, they sell their profitable stocks quickly and hold on to losers forever.
Speaker also pointed out how our brain is capable of subconscious pattern recognition in the case of the Silkworm Missiles. I trade my setup, but never against my gut.
yes, this talk is full of great insights. The speaker says that in case of a car buying example, when people are given all the voluminous comparative facts about cars, when asked to make a 'rational' decision, they only make the correct decision 45% of the time. only when distracted for about 15 minutes to solve a puzzle, their success rate shoots up to 60%. He says there is subconcious processing still going on about the car facts while they are being distracted by the puzzle. In fact a combination of 'rational+gut' decision scrores the hightest. Alas, for me as a trader, I find it very hard to determine what is coming from the gut and what is the result of the two very strong emotions of fear and greed. Thus my interest in meditation. that goes a long way in keeping my limbic system quite during trading hours. Another thing I am working on is to physically move the energy and decision making process during trading hours to the lower dan tien, literally the gut level !
I agree with rational + gut. I don't trade gut alone, not enough screen time for that yet. However, I have learned to never trade against gut no matter what the setup is. This is written into my trading plan for 2011. Lower dan tien? You do qigong or taiji? Which tradition or practice?
I do a simplified version of the following qigong exercise to ground myself, get away from too much thinking, being in my head all the time as most traders do. http://creativeqigong.blogspot.com/2010/04/belly-or-lower-dan-tien-meditation-for.html