The Costanza Effect

Discussion in 'Psychology' started by ctrader, Nov 20, 2002.

  1. ctrader


    Did you ever see that episode of Seinfeld, "The Opposite".

    Sometimes I wonder if that would work in trading.

    "Why did it all turn out like this for me? I had so much promise. I was personable. I was bright. Oh, maybe not academically speaking, but I was perceptive. I always know when someone's uncomfortable at a party. It all became very clear to me sitting out there today, that every decision I've ever made in my entire life has been wrong. My life is the complete opposite of everything I want it to be. Every instinct I have in every aspect of life, be it something to wear, something to eat... It's often wrong."
    - George, in "The Opposite"

    Bald men with no jobs and no money who live with their parents don't approach strange women."
    - George, in "The Opposite"

    "A job with the New York Yankees! This has been the dream of my life ever since I was a child, and it's all happening because I'm completely ignoring every urge towards common sense and good judgement I've ever had. This is no longer just some crazy notion, Elaine, Jerry. This is my religion."
    - George in "The Opposite"
  2. gordo


    That's a good question. Thought about that myself more than once. Forces you to expand your boundaries, and confront your fears :(
  3. That might work because it seems oftentimes that the only thing you can count on the market to do is the opposite of whatever it has done in the past. Not only does "past performance not guarantee future results" but it virtually guarantees the Opposite.
  4. rgowka1


    At the heart of your fears lies the solace..... Lao Tse (I do not remember the exact quote)

    The next time u r afraid of something, chant this mantra and jump right into it.......
  5. I always dive back in. I love trading too much to do anything but. Plus, I don't actually believe in the random walk, but the mkt comes close enough to give you a heck of a lot of grief!
  6. Why? Don't you use stop-losses? You decide how much you are willing to lose and whether it is worth the potential gain. Always set your stop-losses so that your reward-risk ratio is at least 2, better even 3 and then wait until you get a set-up that could potentially give you that. The keyword is: 'wait'. I very often settle for the 1.5 reward-risk ratio, but my targets are 9 points away from my entry and get hit more often than not.

  7. The burning question is:

    Are you the master of your domain?
  8. It's a pretty good idea.

    Imagine if some of the big trading firms just hired a bunch of rank amateurs to trade for them, and simply modified there trading screens to sell when the buy button was hit and visa versa. The screens would show a loss when the trader was actually profitable.

    Once a trader got to be good and started to break even, you would just sack the guy and hire another loser to continue losing for you.

    Maybe this is the secret of all those 400% pa hedge funds. :p

  9. I saw that episode recently (while I was going through a bad trading streak) and it did strike me -- maybe if I just did the opposite of what I would normally do in the market -- maybe I would make some money! At least I need to consider that option.
  10. ElCubano


    I dont think doing the opposite works.....What is the opposite of taking profits to early and not cutting losses to soon, just because you go long instead of short isnt the answer......Lets face it the opposite of what you are doing is NOT TRADING......
    #10     Nov 21, 2002