Discussion in 'Psychology' started by Avid_Consumer, Apr 14, 2011.

  1. does placing a (small) trade change the odds that a market will move in the direction of that trade?

    this is irrespective of the quality of an entry, systematic, discretionary, expert and rigorous, poorly premised and clumsy, etc.

    here's the paranoid and mal-formed theory: when you place a trade, eventually (if not immediately) it finds its way into the book of a significantly larger, more powerful, better informed entity, with far more expertise, knowledge, capital resources, infrastructure, edge etc.

    it's a little paranoid sounding, but i'll level here. i've been in and out of trading and financial services work over the years. overall i've done well as a trader. nothing special, but made figures, not lost them.

    still, i'm thinking about coming back to trading and struggling with a long standing perception. don't shoot me for being honest about it, but i honestly believe that placing a trade increases the odds that the market will move in the other direction. not always- it depends on the specifics... but more often than not, most markets move against.

    thoughts? is this paranoid, losing mentality nonsense? it feels like a qualified observation over years of experience in many markets and reasonably well researched tactics
  2. I'd like to give you my honest opinion, but I'm being watched.
  3. but i honestly believe that placing a trade increases the odds that the market will move in the other direction

    Since this is a psy & paranoia forum, What is your next course of action?

    If you repeat the same trade several times in a row, are you single handedly moving the market?

    Suppose you found several like minded traders and they all said the same thing, will you feel better?

    Suppose this happens, but not always, how do you explain that?
  4. A while back read an interesting article comparing depressed and non-depressed people on their perception of how much they can control something. They gave them some machine that worked 50% of the time in response to the buttons or controls, 50% of the time it did something totally different. Then they asked the subjects, how often were you effective in controlling the device?
    Non-depressed people though their control was 2/3 to 3/4, well above the actual 50%.
    Depressed people thought their control was around 1/2 the time, much closer to the actual.

    I don't know, but a theory/guess is that your (presumably) non-depressed perspective leads you to think you have more control than you actually do.

    For a random volatility theory/guess, perhaps the price waivers up and down by the same amount, then you perceive it when it goes against you, but don't qualify that against when it goes with you. Ie, it will waiver up and down in a range by 50% equally over the course of time like 1 minute>5 minutes>10 minutes, but you only notice when it's against you over that time.

    But I don't know, these are just guesses, hope it gives you an idea to test to support or disprove to help find an answer. For myself, I know the feeling you describe, it seems like that to me all the time too.
  5. oraclewizard77

    oraclewizard77 Moderator

    I was wondering yesterday, why I was doing better in the afternoon (after market close, but futures re-open) and not that good when I woke up. So I decided to do the exact same thing I did in the afternoon this morning, and guess what? I made some profit.

    So the truth is that your mind makes it real.