The human mind is an anti-edge

Discussion in 'Psychology' started by andrewbee, Sep 28, 2009.

  1. Greetings all,

    I have come to the conclusion that the human mind is the biggest anti-edge there is. It is literally programmed to fail at trading.

    We are all familiar with how the emotions of greed and fear cause us to cut winners early and let losers run. Then the frustration of doing the above things and either making less than we should have, or losing, just heightens the emotions the next time around. We repeat the same mistakes, hoping to make good on our previous ones. We compound the situation, and so it continues.

    If you're unfocused and have not selected a particular instrument(s), time period(s) and strategy(ies), the emotions coupled with the above will kill you stone dead. Your mind is an almost perfect anti-edge, in its untrained form. You may as well just give your money to someone else - it would be quicker and easier.

    Of course, I am not saying this natural programming cannot be overridden. There are many, far better people than I, who have managed to master the techniques of trading AND override the emotions. This is a huge undertaking; a path littered with the corpses of those who tried before. There are many stats bandied about regarding the number that make it, and they make for grim reading.

    I am not someone who can do discretionary trading. I like many others have tried and failed at it. I am however a professional programmer, and have gone down the automation route. This is not enough of course; you need an edge. I have developed one.

    You also need a burning, at times all-consuming, desire to succeed. That is the only thing that gets you past the hard knocks. I have been to the school of hard knocks many times, and paid my tuition.

    So, what's it like to do automated trading successfully? Not as easy as you'd think. In the early stages, there are system bugs to be worked out, and technical issues. I have dealt with those, and the system has been running without modifications for many months.

    The next hurdle concerns our old friend, emotions. Yes, they still kick in, and badly at times. I just have to keep reminding myself that my computer is programmed to succeed, whereas my mind is programmed to fail. Trust the machine.
  2. Craig66


    I also am in the same position, I constantly fight toying with the parameters of my automated system. The biggest temptation is to up the size prematurity, I continually find myself toying with this idea...and then I snap out of it.
  3. The human mind is a very beautiful thing, don't waste it.
  4. Most people fail to excel at most things. What you describe is more or less universal for all human activities.
  5. qixiq


    To OP,

    Agree 100%. My trading journey very closely resembles yours.

    Excessive leverage after losses and "freelance trading" when the ATS has few signals are the twin evils that still need to be banished completely.
  6. Redneck


    Astute conclusion

    Now learn to reprogram it to suit your goals…. And yes it can be done....

    Like BP said – Don’t waste it


  7. bighog

    bighog Guest

    "Trust the machine"

    Machines do one thing good. They are designed to do a specific job well and do it over and over when controlled or programed with specific rules that are not subjective unless the person running the machine changes the inputs. Ok, in this case we are talking about computers, same deal, they do good if the inputs are good................else "Garbage in, Garbage out" Correct?

    The person that answered and said humans are not geared for perfection is right. How many factory workers in the history of General Motors made it to the executive suite? How many soldiers that even got through West Point or and of the other services branches made it to the top?

    How many High School or college quarterbacks made it in the NFL? Was Joe Montana a freak or just an exception?

    I ask a serious question regarding trading. Why should every new so called trader expect to code a computer and beat the game?

    Where is it written that a programmer has a clue about trading?

    Why is the trading game taken with such an lackadaisical effort when in reality the game is almost as difficult as politics? Could it be the dream of easy money? Why even consider being a winner in this game?

    Right, go buy a computer for a couple grand and code it to make a million. Who is stroking who?

    In life you are programmed to go so far because the system is not geared for all winners. There must be losers to have winners. A piece of shit computer is not going to get the 90% of losers to the promised land, thats a givin.

    Face reality, you know just like you watch those moronic reality shows on TV about being something you really are not. Pertend you are a factory worker in the new GM and ask yourself what are your chances of becoming the CEO. Then next time you settle up to that computer ask yourself what your chances are to make a million bucks next year.

    Ok, back to the football game............ What are the chances the JETS and Giants go all the way? :) :cool: :D
  8. Redneck


    I’m watching the Cowboys and Panthers – Cowboys are sucking worse than last week (against the Giants) :( :mad:

    Giants are my alternative team – they’re damn good this year:cool:

    Have not seen the Jets play

  9. It is unfortunate to have a mind or mindset like the OP says he has.

    CW does represent the majority. And it is true, logically, that the minority control in any market.

    How do Western and Eastern cultures assess minds? Differently.

    So, the OP is of the Western persuasion; probably a warrior to boot.

    Obviously, it is possible to replicate the mind with a computer as regards the simplicity of markets. Perception is 90% inference and sensing data (visually) is only 10% of perception.

    As TZ, IB and CB recently told us, induction doesn't work. Taleb agrees.

    What would it take for a person to get past what he infers to be able to "see" in the market's action?

    Turn 180 degrees away from the screen and allow the induction to cease. An ATS is NOT built on rules. An ATS is built on principles through deduction.

    The OP may want to start over since that is what his mind is telling him to do, he says. No sale.
  10. wave


    1-You need an edge
    2-You need a plan to implement the edge
    3-You need discipline to follow the plan
    4-You need structure to make it all work

    Don't agonize, organize!
    #10     Sep 28, 2009