inattentional blindness - why the obvious in TA goes unnoticed

Discussion in 'Technical Analysis' started by Xspurt, Feb 13, 2013.

  1. Here's a fun test for traders but you must scroll to the bottom of the page REAL FAST so you don't see the photos and then play the video at the bottom in order to give yourself an honest visual awareness test. The instructions are in the video. Try it out on friends and see their responses.

    THEN read the article from the top on how professionals can miss the visually screaming obvious.

    I have a bit of experience in mentoring - not a lot but enough to see common patterns in a small sample. And before anyone jumps on the advertising bandwagon, I don't mentor now. I trained 2 small groups in a 25yr+ period, one about 6 yrs back on one over the past year. It's been utterly fascinating.

    Almost all the traders had 7 - 10 yrs experience and knew most of the common techniques and methodologies but here is what I discovered. Without exception all traders were not doing aspects of what they thought they were doing. They knew what they should be doing and thought they were doing it as they saw it, but inattentional blindness had become a habit pattern they were unaware of.

    Visual blindness appeared in everything from S&R to trend lines. Even Candle Signals had errors (and I only use 8 signals). When it gets to multiple time frame analysis, that is where the fur really hit the fan because the focal point was so absorbing the screamer was missed in another chart.

    I posted another thread some time back "the politically incorrect truth why TA can't work (for you)"

    It touched on the visual perception difficulties that many traders face when they approach TA and hence we get ET threads on how TA doesn't work or "traders" who tried for years and failed and conclude the problem is not with them but is simply TA doesn't work.

    The good news is most visual problems can be rectified once they are pointed out. However it can take a some time for a visual bad habit pattern to be replaced with a good one and it can be a struggle to see it in real time.

    One ex floor trader that I would class as perhaps the brightest TA mind I have seen couldn't see a type of channel. I was stuck for explaining the obvious so I asked Cornix to help. It didn't work. Then 2 years later he suddenly starts to use these for really fast reversal patterns. When we asked why it had clicked he had no explanation. Sometimes it just takes time away from a technique while keeping it in the back of your mind and suddenly it clicks.

    As an experiment I trained a complete rookie to compare his performance with experienced traders - a clean slate and all that. This guy was real slow on the uptake - I called him the turtle. He plateaued and for some time his performance was quite poor and I couldn't move him on because he just couldn't make the connections. Then in a 2 week period he leaps ahead and becomes the hare. Why? I have no idea. It seems the neural pathways just make the connections and what was a mystery becomes clear.

    If you are stuck on one particular TA technique, see if you can find someone who is good at it and ask if you can send them charts for them to critique. You might find what you think you see and do is very far from that you ought to be doing.

    I could mention some names but they might shoot me if they get a lot of PM's so I'll leave it to yourself to do some searches on ET.

    'The consequence of focusing your attention really tightly is that you may be prone to missing things which may be pretty obvious in retrospect.'
  2. murrica


    I counted correctly. I was happy with myself, then disappointed. :)
  3. LOL yeah it does that just when you think you've got it
  4. Hooti


    83% failed to see...

    17% did see.
    The Motley Fool people reported a study recently that said, I think it was 12 or 14% of people who start learning to trade continue on to succeed.

    Maybe there is a correlation?

    Probably not the whole story, but might be an essential key.