Too many choices

Discussion in 'Psychology' started by 0008, Sep 14, 2003.

  1. 0008


    I used to make a trading system with lots of indicators and I also looked at too many different stocks, futures at the same time. I also watched the TV and read the news. I was overloaded with data. Buy now I know this is a very bad practice.

    The theory "choice under conflict" said when there are too many choices you would make no decision at all.

    I feel this theory can explain why day trade stocks is harder than futures. Many traders are spending too much time and efforts looking for stocks to trade instead of doing the trading. They get too many choices and finally can't do anything.

    Any person with similar experience?
  2. It's not a problem of too many choices it's a problem that too many indicators don't bring any information since most of them are correlated so you must select the minimum necessary (for example one for trend, other for entry in each type of environment trending or not trending market). As for looking for different stocks I don't know what stage you mean: the screening stage or the trading stage. In screening stage it is normal. At trading stage once again many people think that it is for diversification (lowering risk) whereas it will in fact increase the risk (remember momeny management : optimal f in n dimensions is even more sensitive) so considering many stocks is rather for increasing the opportunity of getting some big winners.

    As for me I'm too lazy: I chose to trade only one indice hee hee !

  3. I do not believe many people would take all the steps necessary to get into this situation. It is not a path of least resistance.

    OT: Not to change the subject but it looks like the path to becoming an edge trader is most likely of all the paths. It is definitely a path of least resistance (POLR) approach.

    Comparing your "conflict" based scenario to POLR is in stark contrast and at the opposite pole.

    The path that the most successful follow is sort of the only possibility when all is said and done. It is the path farthest away from these two extremes.

    Back to your points. Scenario you paint is one of successive additions to a construct to minimize the core difficulty the person personally perceives. Like discovering that a baseball has some loose threads and taping it. More problems later are "fixed" with more tape until the ball is not playable. Usually people do not stop playing; they realize that the ball needs to be replaced.

    Someone here said recently they started over three times. Maybe it was a 100 different people. Any way, they were following either of the extreme paths. I hope you turn this thread into a discussion how people left the experience as you did. Not many people get the tools and strong tread to sew baseballs and renew their values. They do it the big league way and chuck ball after ball.

    Personally I always liked playing in the bush league with a scuffed ball that you could really put some juice on. Neat way to win.