TD, Actually this is something I've been thinking about posting for a while now and was not a response to anything posted in particular. However, apparently we may be thinking along much the same lines. I've found the post you refer to but haven't read it so I don't have to respond to 2 posts at once. Here you write, which I see as the essence of your point: To accept uncertainty is to accept a certain lack of control. If we consider this from the standard trading psychology pov, the common mistake is that the trader tries to impose a belief about what the mkt should be doing instead of what it is actually doing. ("What's this? My brilliant analysis is wrong?") If one accepts this truth, that the mkt is control and that we're just along for the ride, then uncertainty should have already been, to use a common mkt term, "discounted" in the trading plan. To only risk so much initially, to set a stop-loss, to have a profit target, to stick to this criteria w/in the trade no matter what happens, acknowledges that the mkt will do what it wants and we can only follow along, trying to protect capital and maximize profits and live to trade another day. When I drive to the store for groceries I can't control what the guy in the car behind me is doing, but I can drive intelligently, defensively, and minimize my risk of an accident by my own actions, to a degree. Harold
Forgive me, but you seem to be a walking sandwich board for Mark Fisher and his book. Just about all of your posts thus far have a single theme. I read the book when it first came out. It wasn't bad, but it wasn't quite as good as you suggest. Just my opinion, of course.
Even the best laid plan that you know has an edge will bring fear into play. The hardest part is to ignore fear, but allow greed...that's how you let winners run. Greed=Good Fear=Bad
Fair enough. I'm just saying that trading is all about reacting. You don't tell a wild elephant what to do. You react to what it does.
Harold, The difference between your example and the real market action demonstrate reasons that psychology steps in. Take two variations on the car example: 1) The fearful, damaged, trader: Have you ever seen an asian woman driver driving amongst australian males (macho, love their v8s and subarus). Fearful driving creates a distorted maladapted version of "drive intelligently, defensively, and minimize my risk of an accident by my own actions, to a degree." Extremes of this behaviour really need psychological help to drive well. 2) The other drivers on the road don't periodically swerve towards you, brake randomly, and otherwise endanger you (at least you won't so perceive it unless you are in a paranoid fearful state). The market is much more vigorous in its efforts to shake the trader. These are not precise analogies but hopefully illustrate something worth thinking about.
Comparing an environment of considerable uncertainty with an environment of reasonable certainty does not strike me as a well-informed observation or comparison. Perhaps Jack is above such petty human frailties, but I think there may be another explanation for his apparent disregard of one of trading's largest hurdles. Besides, I didn't think it was in Jack's genetic makeup to actually "summarize."