At the most basic level, people must trade by processing information. Unfortunately, we're not very efficient information processors. We have a lot of biases that enter into trading decisions.Those biases are all about adding complexity to the world.The second area of disadvantage for traders is emotions , stress ,beliefs and personality .These affect trader's performance in real time. Is it really that simple? Consider the trading rules that work: 1) follow the trend; 2) let your profits run; 3) cut your losses short; and 4) manage your money (i.e. risk) so you can stay in the game. If you design something around following those rules, you'll make a lot of money.
Here is a example of delusions , apply same delusions to a trader At five foot six and 270 pounds, the bank robber was impossible to miss. On April 19, 1995, he hit two Pittsburgh banks in broad daylight. Security cameras picked up good images of his face — he wore no mask — and showed him holding a gun to the teller. Police made sure the footage was broadcast on the local eleven o’clock news. A tip came in within minutes, and just after midnight, the police were knocking on the suspect’s door in McKeesport. Identified as McArthur Wheeler, he was incredulous. “But I wore the juice,” he said. Wheeler told police he rubbed lemon juice on his face to make it invisible to security cameras. Detectives concluded he was not delusional, not on drugs — just incredibly mistaken.
Here is a example of delusions , apply same delusions to a trader Christopher Columbus was preceded, thousands of years earlier, by the builders of the tower of Babel, who built wooden submarines (they came up for air every once in a while) and fled to America to escape the wrath of God after their unsuccessful attempt at climbing to Heaven. No joke.
Here is a example of delusions/mistakes , apply same delusions to a trader Penicillin If Alexander Fleming's mother were around, we all might be a lot sicker. Like anyone eager to go on vacation, Alexander Fleming left a pile of dirty petri dishes stacked up at his workstation before he left town. When he returned from holiday on September 3, 1928, he began sorting through them to see if any could be salvaged, discovering most had been contaminated--as you might expect would happen in a bacteria lab in a hospital. As has been well-documented in history books and on the Nobel Prize website, Fleming dumped most of the dishes in a vat of Lysol. But when he got to a dish containing staphylococcus, something odd caught his eye. The dish was covered in colonies of bacteria, except in one area where a blob of mold was growing. Around the mold was an area free of bacteria, as if the mold had blocked the bacteria from spreading. He realized it could be used to kill a wide range of bacteria--and penicillin was identified. From that minor act of scientific sloppiness, we got one of the most widely used antibiotics today.
This guy thinks I am an idiot , that is the information in his head. An executive coach explains how to learn in 2 days what normally takes 6 months
Research Paper: How Underlying Beliefs Affect Behavior of traders (The Effects of Coaching) http://coachcampus.com/coach-portfo...iefs-affect-behavior-the-effects-of-coaching/
assume this person in the cartoon is a trader and this was trading .His beliefs about how things should be done , is very similar to how traders have beliefs This could be my last post.
Traders have lot of cognitive distortions in their minds , they trade differently to how trading should be done.
Traders have lot of cognitive distortions in their minds , they trade differently to how trading should be done.
That's why you got to establish a norm (A Plan). This plan has to be tested & redefined conjectures. A plan are rules based on logic or statistical patterns. It has to provide quick and easy rules for all situations. From there you keep a journal of all your deviations. You got to be aware of these errors (Weaknesses). "Automate" your strengths as to be effortless. Spend your effort on correcting weaknesses. Once it becomes effortless and un-stressful, I guess you're ready to increase your size. It's good to either take a pic of your fills for the day, Better if you can record your screen while active. Keep notes, review your days, feedbacks, Then keep track of the progression.