Would it be possible to elaborate on this? Could you share an example - does not have to be trading related.
I agree with you, they actually using rules that they understand although might not be written down or backtested in the way I would. A few of profitable traders that I know and been profitable over ten years that use "Intuition and discretionary" do understand that the 10,000 hours of screen time are aware they have memorized their rules for trading. They can identify distance of swings, speed of certain distance and "where the retail trader is going to get screwed". Where I have backtested for years along with screen time, they have backtested within their mind of how much is too far or not far enough.
Personally - trust the gut after plenty of experience.....then try and quantify that. Dealing with people.... After dealing with a lot of people when someone is trying to sell you something but it just does not feel right. Trust your gut. Then maybe afterwards you will be able to quantify why it does not feel right after the emotion/pressure of the sales pitch is gone Choosing a partner.... You know when someone seems to tick all the right boxes but you just dont seem to feel right about it. Once away from them sometimes you can be a bit more objective and realise what it is. There is always the trap of afterwards finding excuses to justify your decision, but that is usually when you have done something....whereas I prefer to trust my gut as to when to avoid something. This made me think - Is trusting your gut similar to following rules of thumb whereby its impossible to quantify because they are heuristics and are not meant to be complex and quantifiable but a quick and dirty solution.....(in answering myself not really) or is it simply that instinct by its very nature is not meant to be quantified. Its simply that indescribable feeling that puts a lot of complex things together in an emotion quickly. (Not sure given it is Friday and my guts are hungry for a nice Martini)
I started as a religious backtester only to find initial success watching an order book and trading discretionarily. Now it seems I can't even automate anything profitable anymore. That's weird...
Nice example of a general rule - to trust your gut in matters of inaction/patience. I would say that the decision making spectrum has analysis at one end, followed by conscious use of rules of thumb and then finally by pure gut reaction. In this light, instinct can be seen as the flowering of all the previous trial and error experiences. So instinct is quantifiable, when linked to the experiences from which it arose - just as evolutionary flight/fight responses arose from quantifiable decisions over a tremendously large data set of the human species.
Between siuya and game, they have uncovered how the two VS'ed suggested by the OP do relate and allow an unconscious or sub conscious interaction. It is very cool that sinya takes the initiative to instruct the rest of the CW type posters here that they are focussed on the opposite of what the required focus actually is. The actual focus he/she says is: the test to CONTINUE TO MAKE MONEY. All others, a priori, has intimated that a trader is focus on looking for the opposite. read all these contributions. Further between game and siuya there is created a sense of heuristics and further that there is a heirarchy of ome sort. Well there is. It is the order of testing heuristics AND that order is determined by CONTINUATION rather than by testing to determine if profit taking is at hand. The 10,000 hour myth is the foundation of getting to "gut feelings" where feelings are an emotion rather than a mental device of scientific origin. The gut is intuitive. To have the simplest test to continue appears to just be a heirarchy of tests. four levels do the trick. This is bar by bar STEM type effort where the "gut" is prevented from letting emotions operate. 1. do adjacent dependent variable slugs of info add any SS* data? If False, stop testing, the market context is HOLD. 2. If 1 is true, then test, the independent variable for an End Effect. If false, stop testing, the market context is HOLD. 3. If 2 is true, then test for whether the End Effect is a Reversal. If false , stop testing, the market context is HOLD. 4. The double check for assuring that a falsepositive has not occurred. This is the most detailed part of dealing with the nuances of taking the full offer. A good example is the definitiions that differentiate a retrace from a reversal. This double check is done by looking at the ontext of all three fractals which include the trading fractal ans the two adjacent fractals. Here one must have gone through the deductive proof that all freactals are interlocking. draw the three directional arrows of the fractals placing them rightmost for fastest. Four kinds of actions can precipitate for one or the other of market sentiments. They are: reversing; taking an early entry; sidelining because no money can be made in the near future (this is the siuya revelalation in STEMese); or "Holding through" since the sentiment reversal temporarily causes a "retrace". So the orientation intoduced in this thread on how the trader is requiredd to orient, is what prevents the CW of the FI rom producing results anywhere remotely connected to the market's offer. By going through the heurisitcs of market operation in a STEM oriented order, then the trader does least work to "always know he knows". Item 4. is simply the "preventer" for improperly "jumping fractals" Items 1, 2, and 3 show up quite nicely as the means of preventing "intuitive" mistakes. anyone can take out a sheet of paper and makea column of the three arrow sets. Fro the relationship I described, please use the "counting" vertically downward whereby the left arrow alternates, the middle arrow is paris and the right arrow is in foursomes. Begin with all ups as the "long" sentiment. you see the names for the four kinds are symetric to the middle of the column. Lastly, all of this brings up one additional notion. STEM thinking proves that the operation of the market is "counterintuitive". So waht must the market intuition come from. If you look at your platform, you can find out this answer. Those who sell platforms know nothing about how to provide a RDBMS. No platforms today are set up to do the mthemaitcs of the system of operation of the markets. this was just an interruption on my part. It probably may be considered by most as off topic or dribble, the new word for drivel ....lol
Science is only good if it is properly understood. More traders are now realizing the limitations of backtesting and they are worse than any discretionary bias. Here is an interesting angle: " Traders who use such products without understanding these realities of repeated backtesting with many degrees of freedom become the victims of their own ignorance and have no chances of ever finding a true edge unless they get to the bottom of this but that requires another edge in the form of an understanding of what must be done to avoid the pitfalls of such processes." Source It boils down to the fact that what is at the heart of automated trading, the backtesting routine, is a problematic process as it turns out. This is the reason for a current massive switch to gut trading. If you fail, at least it was your mistake and not some data mining bias thing.
That link you provided is basically an ad for PAL, not an objective evaluation of backtesting. "Any strategy testing you do without PAL is crap.". Yeah, right.
At the outer reaches of STEM, it is fascinating to me that the world shows a more ethereal (is it real?) character IMO. For example, the current Quantum Mechanics thinking is that the entire world may be a projection (perception) and not real in the objective sense. Mind affects everything we do , yet there is no STEM science for mind. Light energy absorbtion/emission by atomic structures works well in math, yet no one can say why light emission happens. Time is a particularly troubling aspect - the speed of one's perception, yet math and experiment show that it depends on the speed of the observer. Our scientific math doesn't depend on how fast your pencil is moving. One of the most eye opening experiences was when I was introduced to Thomas Kuhn's book on the structure of scientific revolutions in my final year of engineering. Halfway through the course the teacher destroyed my nicely built world. Luckily for me he rebuilt it again. The scientific method is kind of a farce. We worship it on earth and yet it can't possibly be correct. Zen and the art of motor cycle maintenance continued it for me. The mechanics knowledge is only a foundation for the mechanics feel - something that permits honing in on the salient issue and from that the solution.