I think I may still not be coming accross completly, and I need to be careful lest someone think that I am being supersticious or something along those lines. When you learn any endeavor, the first thing we do is we learn the rules. Like in Chess, you learn that you can't castle through check, or that bishops move diagonally on their own colors. All of this can be taught to a computer with little effort. Then as we progress, we learn technique. How to make with K + Q. How to convert a pawn majority into a win, etc. All of this can be taught to a computer with little effort. Then we learn stratgies and patterns. For example, there are patterns of tactics in attacking a castled king. These sorts of strategies, while more complicated than the previous patterns are more complicated are still within the domain of computer understanding. Note that I am not suggesting that you sit down in front of a Grandmaster and without knowing a thing about Chess that you feel your way and orginize your game accordingly. You need all the technique that you fed your left hemisphere. But there comes a point in every game where you can no longer fall back on technique and rely purely on "rules." Once the game reaches this stage, the outstanding players play at a level where while they may be trying to reduce the game to a technically won position, the compications are so vast that it is their feel for similar positions that guides them in searchinng for candidate moves in their analysis. What does this have to do with trading? What I am trying to point out is that a trader needs to acquire all the basic techniques of trading that are known. For example, it is technique that IRs affects different sectors in differernt ways. You acquire this technique through standard left brain techniques like linear regression to find betas, etc. But once you are trading in the middle of a day, while that technical expertise that you have acquired guidess the trades you make, it is ultimately feel for the discretionary trader that guides a trade within a particular instrument on way or the other. The reason for this is that there are fanstastic number of casual elements that affect the movement of an instrument. That is what I mean by dimensionality - for example, C is affected by the spread of the 2 and 10 year notes. But is also affected by a host of other things, all of which the market can choose to look at the glass half full or half empty, on any given day. The real artistry comes in deciding what to focus on, when the "feel" is not right, perhaps because something else, like say a big buyer has just come into C options demaing calls. This is a new dimension that may not have been present for the last week, and C is now entangled with a hedge fund. Your right brain will pick this up immediately, but the rest of you may be confused for a bit. This is a reeeeeally small encapsulation of what I mean. I have no idea if it makes sense to anybody yet, but it is as certain to me as the sun rises in the east and sets in the west. nitro
I think I may still not be coming across completly, and I need to be careful lest someone think that I am being supersticious or something along those lines. When you learn any endeavor, the first thing we do is we learn the rules. Like in Chess, you learn that you can't castle through check, or that bishops move diagonally on their own colors. All of this can be taught to a computer with little effort. Then as we progress, we learn technique. How to check mate with K + Q against lone king, etc. How to convert a pawn majority into a win, etc. All of this can be taught to a computer with little effort. Then we learn strategies and patterns. For example, there are patterns of tactics in attacking a castled king. These sorts of strategies, while more complicated than the previous patterns are still within the domain of computer understanding. Note that I am not suggesting that you sit down in front of a Grandmaster and without knowing a thing about Chess that you feel your way and orginize your game accordingly. You need all the technique that you fed your left hemisphere as an apprentice chess player. But there comes a point in every game where you can no longer fall back on technique and rely purely on "rules." Once the game reaches this stage, the outstanding players play at a level where while they may be trying to reduce the game to a technically won position, the complications are so vast that it is their feel for similar positions that guides them in searchinng for candidate moves in their analysis. The right hemisphere is fully engaged with the left now guiding searches and decision making. The rules are probably no longer verbal. They are some fuzzy state between what a person knows, and what a person knows subconciously. Chess is a closed game where the dimensionality of the solution space does not change. Trading is vastly more complex than this. What does this have to do with trading? What I am trying to point out is that a trader needs to acquire all the basic techniques of trading that are known, usually through verbal learning. For example, it is technique that IRs affects different sectors in differernt ways. You acquire this technique through standard left brain techniques like linear regression to find betas, etc. But once you are trading in the middle of a day, while that technical expertise that you have acquired guides the trades you make, it is ultimately feel for the discretionary trader that guides a trade within a particular instrument one way or the other, usually through tape reading. The reason for this is that there are fantastic number of casual elements that affect the movement of an instrument. That is what I mean by dimensionality - for example, C is affected by the spread of the 2 and 10 year notes. But is also affected by a host of other things, all of which the market can choose to look at the glass half full or half empty, on any given day. The real artistry comes in deciding what to focus on, when the "feel" is not right, perhaps because something else, like say a big buyer has just come into C options demanding calls. This is a new dimension that may not have been present for the last week, and C is now entangled with a hedge fund. Your right brain will pick this up immediately, but the rest of you may be confused for a bit. This is a reeeeeally small encapsulation of what I mean. I have no idea if it makes sense to anybody yet, but it is as certain to me as the sun rises in the east and sets in the west. nitro
Ugh, There is an echo in here. Moderator please remove the duplicate post on top of this page, then remove me. nitro
Really? Feel free to post the evidence. You are basicly saying that learning to trade is like learning to read, anybody who is at least average (most of us) can do it. We could agree that 95+% of people can learn how to read. And that is not language specific... I will apply an even less standard, I will call it 80/80/80. I ask anybody to prove that 80% of all trading systems can be taught to 80% of the average students in a way that they will achieve 80% of the system's average return. Any evidence backing that up would be welcomed. Before some idiot comes with the usual:"But I learnt how to trade", good for you. What I am saying is that learning to trade is NOT like learning to read. Because of the psychological aspects of trading, I would say LESS than 30% of average people can learn trading, and we haven't even talked system specifications (some systems are simpler than others).... I can change my mind very quickly, I just need to see the evidence....
Peklo, While I don't have evidence and I not trying to start a fire, I have read that above average IQ traders sometimes have a harder time.They tend to over analyze their trades before making decisions. I can't recall the book or article, sorry. That's not to say you could take some developmentally disabled and teach them how to make 6 figures a year trading.
Just a small comment. Not taking sides BUT, nitro is 100% correct. Here is a down to earth definition of money/trade management. You see a setup and from past experience you determine the odds are in your favor. You pull the trigger and get filled, the easy part is done. Once you get filled then the fun starts, whatever your thoughts were about the outcome of the trade are now MOX_NIX. Your job now is to finesse the trade to the best of your ability. CORRECT? The very next tick and every tick thereafter gives your mind new and various thought processes. YOU SEE the price action now in a different light than before the entry. before the entry your mind had just a couple choices....win or lose...NOTHING IN BETWEEN. OK, now the price of bouncing around, you now have a LOT of choices to contemplate, is it going as planned, is the momentum gaining or slowing, are you losing , winning, stalled, etc. That guys/gals is where nitro is correct, you use your brain to finesse the trade AFTER IT IS FILLED. The finesse is the part of trading that comes from the right brain, the left side is easy mechanical stuff. This is the difference between winners and losers. 1 out of 10 trades will (if lucky) go straight to a profit OR straight to a loser. The other 9 trades MUST be finessed, moving trail stops up etc. EXAMPLE: You put a trade on with a main objective of what? If you said to make money...YOU ARE WRONG. The first and foremost objective is to NOT lose money. Say a trade is on and you show 5 ticks profit. What do you do? Well, the first thing i do is move the stop closer, I JUST SAVED SOME MONEY, i reduced my potential loss and left the profit objective open ended. that is just one of many things that happen once the trade is filled. There are a lot more, but unfortunately you cannot prepare for them until the ticks bounce around. RIGHT BRAIN , that is what works to win.......... This is just a tiny piece of what the mind encounters once filled. Systems can be a help in entry etc, BUT a computer has no finesse. at least not much...........
How high one's intelligence is has no bearing on how well one does in the mkts...NONE. Sorry if i offended the Einsteins we have here. Average intelligent is all one needs to succeed in trading. 100% of people that are of ave intelligence or above, AND have no "monkey wrenches" to gum up the works (psychological gears of learning) can be successful in trading. Only 5% ever make it. WHY? Because 95% all do the same thing....... they try to learn the markets.. the trading methods, the whole mkt madness, before they take time out to learn them selves. Before they properly assess their psychological strengths and weakness....in order to understand what type of trading fits them. 95% fail because time runs out for them.... either from being drained mentally or financially.
Perhaps. On the other hand, is is possible that you simply have not articulated your trading strategy very well beyond the entry stage? It sounds like you have your entries down pat but you are winging the rest. In my experience, it doesn't have to be that way. There is some winging, yes, but I endeavor to keep it to a minimum. Of course, I am not a superior trader. Are you?
Another EXAMPLE: Take Dogfighting in WW11 relative to dogfighting today (if it even ever happens again). In WW11 the propeller guys had to face the enemy planes MANO vs MANO. To just go out on a mission and think you would not need to engage bandits was a mission to die. The SKILLS required to survive a dogfight come from practice and training, from tactics and skill to avoid and shoot down the other guy or else get shot down. Fair enough? The pilots back then never knew the skills of the opposing pilot, thus he had no idea what to expect. One main reason stated by war vets etc from the times why some died and why a FEW became ACEs was aggressive flying and tactics of skill and guts, fearless guts. Today, the modern jets have great technology and rockets that can be fired from say 60+ miles away. Technology replaces right brain. Dogfighting in general is history. Those guys were fighters, they fought as the fight unfolded, again it was man against man. ..............OK, done for the exening........... PS, to the poster thunderdog or something. face it, trading is right brain. I know it hurts, but it is true. Do not try to sugarcoat anything else with false rhetoric nonsense..........DONE