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Trading Psychology -- Feedback

  #10 (permalink)

south africa
Posts: 170 since Dec 2018

tpredictor View Post

On edge, most traders do have some edge but do not have enough edge for their leverage or psyche. .

I agree with everything you said besides this.
To me by definition most traders can't have an edge. An edge is on the entire field of other players so everyone can't have an edge. It has to be a small minority have an edge on the majority.

Edge is used in such on odd way on trading boards. As if it is a property of the brain and no matter what happens in the markets once you acquire this magical property it can't be lost or change. Even when we know the brain is pretty much terrible at acting like a probability engine with all these heuristics and bias. An absolute joke at trying to do inference with more than a few variables(if not just one).

Edge is used the way anyone who has ever learned the rules of poker can point to some aspect of their life experience that gives them an "edge" against the field. Same psychological process that makes every person believe they are a good driver of an automobile.
If you put up a pole "are you a good driver, yes/no" everyone will click yes. Do you have an edge in the markets? Of course I do because of x, y, z, theta, gamma and rho.

It is amusing trading psychology wise that everyone loves to point to Thinking, Fast and Slow but this quote pretty much sums up how to optimize your trading psychology.

"You should replace humans by algorithms whenever possible. Even when algorithms don't do very well, humans do so poorly and are so noisy that just by removing the noise you can do better than people"
--Daniel Kahneman

Last edited by centaurer; April 20th, 2019 at 07:46 AM.
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