This is so true. But I might add that some, in fact perhaps the majority of the population, lead a peculiar life trajectory that is counter to this philosophy. That is some people (like one of my friends) can survive and sometimes even thrive with the most superstitious and non-scientific world view. I believe I know exactly what is going on with these people though. In human society, there are two ways to make it: One is through social interactions, the other is by beating your head against nature. The latter is much much more difficult than the former. In the case of my friend, he has figured out how to get people to believe in him and work with him because he knows how to work the common denominator of human emotion. What really really aggravates me though is this: I believe I have attained a level of success without much social engineering, but rather by beating my head against nature and actually getting somewhere. But he not only categorically denies that mode of being (which is a perfectly rational stance as it is much much harder to succeed that way), but he is deluded into thinking that his success is based on the fact that somehow he has figured out nature better than I or most other people have and that his completely non-rigorous soft-logic gut instinct approach will actually work in developing systems for trading. I don't know, I guess you might argue that in the end, you are pitting yourself against other people when you trade, so perhaps that gut-level method does have a place but I just have to say that is not my way and move on.
Research done by the CIA in the 80s found that by scanning brains of people with EEG produced very weak signals in the brain that could anticipate an event that is about to happen. In their tests, the subjects were told to pick one of four cards that appeared on the screen one by one, and only one was the winning card (like in poker). One part of the brain reacted differently to the winning card, even though it was picked later randomly by the computer. The reaction in the brain was too weak for it to reach the conscious mind, but it was detected by equipment. It wouldn't surprise me if somebody was using that on the markets.
Well, with the risk of sounding too weired I actually liked this book http://www.amazon.ca/Source-Field-Investigations-David-Wilcock/dp/0525952047 I was involved in the similar research in 80s and always felt that it could be very useful in the market decision making process. However, elaborating on the subject could be a topic of an entirely different thread.
When you are at the hard right edge of the chart (you know that area between the past and future)what is to happen can never be known with certainty therefore never bet the farm. Size your bet to a comfortable level.Decide which way to go based on your best guess of an anticipated future and enter. Those that say you don't make this kind of decision are wrong.The only reason to enter is that you think something will happen. If it doesn't happen get out. If it does happen stay with it until it gets too uncomfortable and then get out. Simplicity rules. Don't complicate it. Don't excessively analyze it. If you are making money don't change and if you are losing money change your methods. How you get out in my opinion is much more important in the long run than how you enter. Always remember that when you dance with the market she always leads and will always ignore your efforts to influence the dance.
Hi, Very interesting topic. I recently read an article written by one of the traders at iTradePod that included a section on the Wisdom of the Crowd and how individuals in crowds can guess wrong but as awhole the crowd can get an guess answer correct (crystal clear after reading the article, Google "Don't trade price"). In fact Hedge Funds have now caught onto the idea and are now using the principles behind the Wisdom of the Crowd to make Millions of $s out of studying crowd behaviour portrayed within Social Media technologies such as Twitter.
thanks DowIndexTrader, http://www.itradepod.com/Home/GlossaryA here's one of the links from that article which has a glossary of trading terms
Interesting and good post, murray t turtle You are right about "treating the winners" and the other names and definitions of gambling/lottery. DowIndexTrader, were you referring to this, http://docs.google.com/viewer?a=v&q...NyFefD&sig=AHIEtbR6fgIMbVKv4gExrCRXOiNdZIzeDA (PDF version of "At iTradePod we have a mantra ââ¬â Don't trade price, trade Value")?
Trading is about making decisions in an environment of uncertainty. Making decisions in an environment of uncertainty can be called guessing. The weatherman does this when they make a forecast. You do it when you put on a seatbelt. (In a small number of crashes, seatbelt wearing contributes to death.) When you select as college major, it is a 'guess' based on your prediciton of the employment options 4+ years in the future. We buy fire insurance because we 'guess' that our house will burn down this year. When one chooses to become an entrepreneur, one is 'guessing' that they can succeed. The farmer does it every spring when he plants his crop. Even an employee 'guesses' that their employer will be able to conduct business & make payroll.
I like to believe our brains love to do repeatable activities, it is happiest when it can see and do what it has done in the past. I believe the 95% who lose are doing just this, the brain is use to taking losing trades, and it can easily spot the next trade and chances are it will also be a loser, but taking a trade that the brain doesn't like, good chance of a profitable trade, the brain starts to do weird things and has anxiety attacks cause it is not use to do money trades. I think studying losing trades, reinforces the brain actions. I rather study everything about the winning trades, that my brain is only seeking out the profitable trades. And whether you are doing day trading, swing, long term or spread trading, they are educated guesses. But your education can certainly give you the edge far greater than the 95%.