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Scattered thoughts...
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Scattered thoughts...

  #151 (permalink)
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whatnext View Post
I've found what I think some will find to be a real treat :-) Reminds me of the Truman Capote of science.

Ingo Swann - Human Super Sensitivities and the Future - YouTube

All the best

I only watched a few minutes, but he is an odd character indeed.

That stuff is way too far out for my taste, I am more interested in the hidden caves within...

 
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Surly View Post
I figured you'd know about him - his work is in line with "self-directed neuroplasticity". Have you seen John Lilly's "programming and meta-programming in the human biocomputer"? Obviously dated in terms of neuroscience but science relating to the mind often only catches up with what might be called "folk knowledge".

LSD is an awesome way to learn about your mind and what is possible in terms of different "realities" (i.e., how your mind builds up its unique representation of the physical/emotional/rational world). I spent several years in my youth exploring consciousness with it (it is impossible not to sound like a hippie when speaking of LSD - we really don't have a good lexicon or cultural framework for the type of knowledge/experience available in this realm). When used properly LSD (or psilocybin) can at least allow you to temporarily see other possibilities for looking at how you build up the reality you inhabit (here I mean reality in terms of how your mind constructs its representation - not in terms of physical laws, causality, etc).

Although I agree with what Chogyam Trungpa says about LSD being like "driving a car to go next door" and with what Richard Alpert says about it being a great way to be shown the way but that durable expansion of consciousness/potential only comes through diligent effort over time (an idea that aligns well with Jeffrey Schwartz's concept of "mental force" and how directed attention promotes neuroplasticity).

All good stuff!

Thanks for sharing!

I have not read Lilly's book, but I am aware of it. It's been on my list for years, but I've never gotten around to it. I've read far too few books, and that is something I'm trying to remedy. I'm much more of a thinker than a reader, and I sometimes find it difficult to devote time to other people's thoughts...

Well put! I sometimes get embarrassed when speaking of it, mostly because I feel I have trouble communicating my thoughts clearly. It's very easy to sound like hippie, something I am not. I am mostly interested in gaining insight and control over mind and body, in addition to using it as a tool for scientific, or trading, breakthroughs (à la Crick).

I've always liked the very abstract and the unmistakable concrete, but I struggle with things in between. That's why I'm fascinated by trading; It's both very mechanical and abstract at the same time. I've been scratching the surface of Complex Adaptive Systems lately, and that seems right up my alley. I've also devoted more time to AI, which is something I've wanted to do for years. More about this in my reply to @Deucalion in a little while.

My goal was to accumulate 8 figures before I could really start living, but I've adjusted my goal a little. I spent three years traveling the world; flying first class and staying in suites at five star hotels. Everything gets old after a while, and the most fun is to be had within one's own brain. I despise myself for not pursuing my real interests much sooner, but I guess that's part of growing up...

 
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Anagami View Post
Very interesting, thanks! Especially like Gigerenzer (intuition vs. algo discussion, simple vs. complex, full vs. partial info...etc.).

Found a paper by him on Smarter Heuristics. Looking forward to reading his books on Gut Feelings and Risk.

Thanks. I love Edge.org. A lot of people find it to be intellectual masturbation, but I've picked up some interesting concepts there.

As a strange coincidence, but very off-topic, (thankfully this whole thread is), someone presented me with a paper yesterday:

http://www.sunypress.edu/pdf/21515778.03.01.01.pdf

which is based on C.P. Snow's The Two Cultures

The editor of Edge.org, John Brockman, wrote Third Culture: Beyond the Scientific Revolution

A brief description here:
The Third Culture | Edge

To sum up my thoughts of the paper:

A mathematician who is not also something of a poet will never be a complete mathematician. - Karl Weierstrass

After a certain high level of technical skill is achieved, science and art tend to coalesce in esthetics, plasticity, and form. The greatest scientists are always artists as well.
—Albert Einstein

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Surly View Post
Thanks @Deucalion - great post w great links, etc. I like the talk by Farmer and looked more into INET - they just hosted a symposium in Berlin this last weekend. Soros was a co-sponsor and has a few talks including one on reflexivity that I haven't had a chance to watch yet. I did watch Damasio's address and found him interesting as always. Also looked more into Gigerenzer and his book on guy feelings. All this helps... my skull is thick but its starting to open up...

Reflexivity is indeed an interesting concept...

By the way, I think you're misjudging the thickness of your skull!

 
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Lornz View Post
Thanks. I love Edge.org. A lot of people find it to be intellectual masturbation, but I've picked up some interesting concepts there.

As a strange coincidence, but very off-topic, (thankfully this whole thread is), someone presented me with a paper yesterday:

http://www.sunypress.edu/pdf/21515778.03.01.01.pdf

which is based on C.P. Snow's The Two Cultures

The editor of Edge.org, John Brockman, wrote Third Culture: Beyond the Scientific Revolution

A brief description here:
The Third Culture | Edge

To sum up my thoughts of the paper:

A mathematician who is not also something of a poet will never be a complete mathematician. - Karl Weierstrass

After a certain high level of technical skill is achieved, science and art tend to coalesce in esthetics, plasticity, and form. The greatest scientists are always artists as well.
—Albert Einstein

Thanks, edge.com looks like it has tons of informative stuff.

The paper has a Wittgenstein quote on top, now I have to bloody read it.

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Excellent, makes one think about deeper implications for trading (less is more, heuristics vs. complexity).

"...the degree to which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader." - Mark Douglas
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  #156 (permalink)
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Deucalion View Post
Surely you are joking about Bayesian analysis not applying to trading.

These 2 old old articles (How experts make decisions under uncertainty - PART I & Part II.) for some reason triggered some very deep clicks in my head last year when I came across them (both on Bayesian inferences, both by Dr Brett on decision making processes with uncertain and incomplete datasets). At that point I had not heard about any of this - Bayesians, heuristics, adaptive & evolutionary behaviours. What a difference one year makes!

Both talk about how our brains have the ability to process old and new information, and how this information is weighted and meshed. Rational traders have the ability, with either mechanical methods or experience, to place proper weight age to new and unfolding information. Emotional traders don't. Both him and Salzman & Trifan below suggest the same thing, as does Gigerenzer. The latter goes a step in a different direction suggesting that simple heuristics can optimize those analytical methods more than people give them credit.

In this study (uploaded pdf), in 2005, Trifan and Salzman attempted to study market behaviour of Rationals (Bayesians) and Emotionals. I have highlighted some sections I found interesting regarding the behaviours of traders in the decison making process. Essentially, they conclude that, as expected, the Rationals performed best.

They also noted that under certain conditions the emotional traders (relying on honed intuition) may overcome the shortcoming of their emotional leanings by fine tuning their intuition in a similar manner to the rationals. They even suggest that, it may be possible for the emotional trader to produce out size returns as compared to the Rationals in such a case.

This suggests that emotive trading when guided with certain Bayesian behaviours with honed intuition (which is being considered a learned skill these days) is a powerful combination. I have viewed hard work , screen time, open conceptualization and a study of history as some of the ways intutition can be tuned (and I continue to do so).

Gigerenzer (who is referenced in the above study) suggests that both simple heuristics and intution play an often misjudged role in decision making (especially when considering decision making in an uncertain world). This gels, as none of thse concepts stand alone or in violation of another, but seemingly as a cohesive, meshed thought process. I found these very constructive (about intuition and the role of simple heuristics in optimising the decision making process). I don't under stand much about heuristics itself yet, but in time hopefully it will get better.

Video

Video

Both the paper and Gerd suggest that these methods by themselves are not superior, but that they should be not be shunned simply becuase they cannot be quantified as easily as other traditional methods of analysis.

There is paper referenced to Andrew Lo about markets, evolution and adaptive behaviour that was also referenced somewhere else (I cannot remember where) and even more cool was the reference to Doyne Farmer's paper on Market Force (that was one of the foundations of his research leading to the Prediction Company discussed earlier.)

Video

My point is this - when I read Brett's papers initally about how figher pilots make decisions in seconds with new unfolding information for survival, or how athletes change their response mid swing or mid action, this clicked with me. On a very simple level, I related that instantly to how I play squash, often changing my decisions mid swing or mid - stroke. How I will evaluate strokes long before I hit them, as my opposer is simply moving and before he hits his shot. In 15years, my decision making in squash has become intuitive. Fluid. I don't have to think any more, it just comes. In my mind, I have been able to isolate instances that my trading has displayed similar characteristics. I have no doubt this is from practice, screen time and focus. In trading, I am no where close to that fluid level, there is too much thinking going on, and not enough honed intuition so far.

I have no doubt that this path will contiue to fine tune itself as long as I don't do anything stupid. I believe most traders would benefit from that, even if they are mechanical types. Problem is, this is no doubt hard to put down on paper, hard to show to others, hard to demonstrate with pretty and squiggly lines. people don't pay sustained attention to it for long enough to see results. And therefore, the lack of interest in this forum to such dry things.

The response to the mind games stuff on other threads is very encouraging though, people are waking up...and that is step one, I think.


Thanks for the links, @Deucalion. Interesting stuff indeed!


I was joking about Bayesian inference, of course. I think you have me confused with someone who wish to guide others to the end of the trading rainbow...

I am a very intuitive thinker, but I have a long way to go in order to understand how that process actually works.

I think in pictures and often find it hard to describe my feelings and thoughts. I classify things based on a intuitive feeling of coarseness and shades of color. I have great difficulty remembering auditory information, and I struggle with separating background noise from speech. It's nearly impossible for me to watch a "noisy" movie without subtitles for me; I experience sensory overload. I also have difficulty focusing on a single stream of information, especially such banalities as small talk, and normally drift in and out of the dialog. However, when I really get interested in something, I experience a sort of "hyperconcentration" where I am oblivious of my surroundings.

However, I'm also mathematically inclined and like to quantify my intuition as much as possible. It's very important to distinguish between emotion and intuition, though. I'm a quite calm, rational human being, but my intuition simply outperforms my other cognitive efforts. Since intuition can't easily be reverse engineered, it sometimes feels as if my brain is a black box. It's kind of like Plato's Cave; I can sense an outline of what is going on, but not completely.

My view has always been that there are complex processes in the unconscious that form my intuition. The more input I feed it, the better it performs. I've never understood why people have such a hard time accepting that theory. Probably it's because most people's intuition is not very fine-tuned. I spent quite a bit of time to be able to recognize and try to eliminate emotional bias. I've never been very emotionally affected, and I've always seen that as a human weakness. When people speak of using feelings to one's advantage, they are usually referring to intuition.

Quickly rereading what I wrote, I can see that I sound like an pretentious, egomaniacal, pompous ass. It seems that I think I am Nietzsche's Übermensch. That's not my intention, and that is also why I rarely speak of such matters. However, I thought it might be fitting for this thread.
To balance out the bragging, I would like to add that I am often quite a slow learner. I usually spend a lot of time getting the fundamentals right, but then I am usually able to take quantum leaps. I spend a lot of time focusing on the on the essence of the more complex aspects, before I even attempt to fully understand the basics. I really don't like the linear approach one is forced to follow in school.

In trading it seems that almost all are focused on very narrow fields, without having a deep understanding bout the interconnected "whole". I think this is a big mistake. It's in the complex relationships between the whole and the parts that the brain has the greatest advantage over machines. I am using a complex evolving system, my brain, to solve and exploit a complex adaptive system.

I'm much more interested in Bayesian probabilities with regard to machine learning. My interested in AI lies in the possibility of trying to quantify an approximation of my intuition. I've wanted to spend more time on this for years, but I haven't been able to actually get started until recently.

Christopher M. Bishop (the author of Amazon.com: Pattern Recognition and Machine Learning (Information Science and Statistics) (9780387310732): Christopher M. Bishop: Books) gave this general talk about bayesian inference from a machine learning viewpoint.
Introduction To Bayesian Inference - videolectures.net

I've been following the Model Thinking course (https://www.coursera.org/course/modelthinking), which I recommend everyone check out. It is basically over now, but one can still log in and download/watch the lectures. Good stuff!
The lecturer, Scott Page, has also written this book: Amazon.com: Complex Adaptive Systems: An Introduction to Computational Models of Social Life (Princeton Studies in Complexity) (9780691127026): John H. Miller, Scott E. Page: Books

I bought a couple of books, but I haven't had the time to work through them yet:

Amazon.com: Networks, Crowds, and Markets: Reasoning About a Highly Connected World (9780521195331): David Easley, Jon Kleinberg: Books

Amazon.com: Networks: An Introduction (9780199206650): Mark Newman: Books

Some interesting videos:




Andre Lo also gave a talk at the Santa Fe Institute a little while ago




If people want to learn more about this stuff, there are a ton of papers the AAAI's website.

Association for the Advancement of Artificial Intelligence

https://www.ai-class.com/

https://www.coursera.org/course/ml

About Me

The problem with all of this, at least for me, is that it's more interesting than trading. So even though a lot of it might not necessarily be applicable to trading, I still want to delve into it. I'm screwed.... I've been working on a way to just focus on my swing trading for some time, and I think this is it...


Deucalion View Post
As cool as the above stuff is to me, this one well and truly blows my mind, not just plain old brain elasticity, but actual neurogensis. Wowsa!

Video

Dr Kandel with the more of the same....Healthy Minds ~ Neurogenesis (#108) | WLIW21 Productions

And the best for last, a true pioneering miscreant....The Molecules of Emotion (Dr Candice Pert)

Video

Funnily, that vid about Pert, reminded me of this...."Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money". Now, which wise guy said that?

Yeah, neurogenesis is a beautiful thing. Running seems to be a good type of exercise for this. Any exercise that involves balance and speed should be good. I can't wait for this to get more documented. At the rate I'm going, I'm afraid my brain will explode from all the new neurons...

I've been doing Tabata intervals on and off for the past 6 years, it incredibly effective:
http://www.cs.unm.edu/~wneumann/files/guerilla_cardio.pdf

P.S. Wasn't it Seykota who said that?


Last edited by Lornz; April 26th, 2012 at 05:51 PM.
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  #157 (permalink)
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I forgot to add that good money and risk management is key if basing trades on one's intuition. I don't really want to get into details about it, but modeling for volatility is really helpful.

Someone sent me a video of an installation based on the patterns in nature:



Aren't patterns wonderful?

 
  #158 (permalink)
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Part I - Intuition & Emotion


Lornz View Post
Thanks for the links, @Deucalion. Interesting stuff indeed!

I was joking about Bayesian inference, of course. I think you have me confused with someone who wish to guide others to the end of the trading rainbow...

I am a very intuitive thinker, but I have a long way to go in order to understand how that process actually works.

I think in pictures and often find it hard to describe my feelings and thoughts. I classify things based on a intuitive feeling of coarseness and shades of color. I have great difficulty remembering auditory information, and I struggle with separating background noise from speech. It's nearly impossible for me to watch a "noisy" movie without subtitles for me; I experience sensory overload. I also have difficulty focusing on a single stream of information, especially such banalities as small talk, and normally drift in and out of the dialog. However, when I really get interested in something, I experience a sort of "hyperconcentration" where I am oblivious of my surroundings.

However, I'm also mathematically inclined and like to quantify my intuition as much as possible. It's very important to distinguish between emotion and intuition, though. I'm a quite calm, rational human being, but my intuition simply outperforms my other cognitive efforts. Since intuition can't easily be reverse engineered, it sometimes feels as if my brain is a black box. It's kind of like Plato's Cave; I can sense an outline of what is going on, but not completely.

My view has always been that there are complex processes in the unconscious that form my intuition. The more input I feed it, the better it performs. I've never understood why people have such a hard time accepting that theory. Probably it's because most people's intuition is not very fine-tuned. I spent quite a bit of time to be able to recognize and try to eliminate emotional bias. I've never been very emotionally affected, and I've always seen that as a human weakness. When people speak of using feelings to one's advantage, they are usually referring to intuition.

Quickly rereading what I wrote, I can see that I sound like an pretentious, egomaniacal, pompous ass. It seems that I think I am Nietzsche's Übermensch. That's not my intention, and that is also why I rarely speak of such matters. However, I thought it might be fitting for this thread.
To balance out the bragging, I would like to add that I am often quite a slow learner. I usually spend a lot of time getting the fundamentals right, but then I am usually able to take quantum leaps. I spend a lot of time focusing on the on the essence of the more complex aspects, before I even attempt to fully understand the basics. I really don't like the linear approach one is forced to follow in school.....

Google "intuition & emotion" and one comes with a ton of nonsense linking the two and mixing intuition with spirituality, hocus pocus as if it was some magical (mystical?) mumbo jumbo. This typically comes from idiots and pseudo scientists/self-proclaimed experts who quickly want to label and package things neatly into boxes. Just your everyday reductionist BS that pervades our lives. No nuance, no insight, no subtlety, no acceptance of the abstract and the possible.....just living in prose. Utter Banality.

I have a hard time accepting intuition is a pure abstract that one is simply born with. I am firmly in the camp of believing that one's social & learning environment hones it. It is a an important tool for me. I mirror your thoughts on intuition, although I am less inclined with the math side of it. Being a physics student, I am happy when my intuition does not clash or contradict natural logic and rational thought. That's it. Your thoughts on intuition reminded me of this - Intuition -- Psychodynamics and the Science of Intuition

For one thing, this explains better INT"X" rather than just "J". Actually, today I believe my brain is evolving into a similar thought process too. Secondly, I use to scoff at the right brain types, the abstract thinkers, the artisans - believing vainly in the edge of the Rationals. No more - I often admire the artsy types for their abilities to think freely - my rational bit keeps me grounded - so this maybe the best of two worlds so to speak. You can be thinking and perceving at the same time without losing rational & logical thought.

Jung (famously) - "It is fashionable stupidity to regard everything one cannot explain as a fraud."

Mintzberg (less famously) - "It isn't possible to assess the use of intuition by purely logical processes. It is a subconscious process, which no one really understands, except by certain of its characteristics (such as the speed with which it can sometimes produce answers.) Thus the dismissal of intuition as an irrational process is itself irrational, just as embracing it as a process superior to formal logic is itself illogical."

This is a lovely piece on this thought - Einstein On Creative Thinking: Music and the Intuitive Art of Scientific Imagination | Psychology Today

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Part II - Bayes, Heuristics & Patterns (with a bit of Occam's Razor)


Lornz View Post
............In trading it seems that almost all are focused on very narrow fields, without having a deep understanding bout the interconnected "whole". I think this is a big mistake. It's in the complex relationships between the whole and the parts that the brain has the greatest advantage over machines. I am using a complex evolving system, my brain, to solve and exploit a complex adaptive system.

I'm much more interested in Bayesian probabilities with regard to machine learning. My interested in AI lies in the possibility of trying to quantify an approximation of my intuition. I've wanted to spend more time on this for years, but I haven't been able to actually get started until recently.

The problem with all of this, at least for me, is that it's more interesting than trading. So even though a lot of it might not necessarily be applicable to trading, I still want to delve into it. I'm screwed.... I've been working on a way to just focus on my swing trading for some time, and I think this is it...

Yeah, neurogenesis is a beautiful thing. Running seems to be a good type of exercise for this. Any exercise that involves balance and speed should be good. I can't wait for this to get more documented. At the rate I'm going, I'm afraid my brain will explode from all the new neurons...

P.S. Wasn't it Seykota who said that?


Lornz View Post
I forgot to add that good money and risk management is key if basing trades on one's intuition. I don't really want to get into details about it, but modeling for volatility is really helpful.

Aren't patterns wonderful?

Qualifier - it would be easy to get lost into detail with the stuff you covered, so i am going to use Occam's Razor principle here (imagine my pleasant sense of deja vue when I read this linking Occam's Razor to heuristics, bayes, probablity et al...)

I agree, some people focus trading on a narrow basis. Trading patterns in any market are a result of human beliefs. Beliefs are rational, irrational, instinctual, intellectual, mob driven, predictable, unpredictable....etc etc.......They come from every facet of human endeavour. Anyone that disregards this is missing the bigger picture. In fact, this I would say I abhor that sort of narrow approach - Every trade of mine is constantly evaluating "why" and "why not" together....right from entry to exit. It keeps me out of some simple trades but it also keeps me of trouble (which works for me)

All of this is reflected in everyday patterns. This again comes back to why I only trade EW. I believe on both an intuitive and rational level that human beings will always color the market with their beliefs (no matter how good the machines get). After all, machines are based on our collective learning and knowledge. I also would state that EW is one way of interpreting our belief systems (not the only way but one way that appeals to me holistically).

I would go as far as claiming that simple Bayesian thoughts, optimised by common sense heuristics and pattern recognition are all linked together in this....nothing violates the other. This is poetry to me....I cannot quantify it (yet). But it's there. It's such a pleasant thing to note that when I mentioned intuition and emotion, you followed that with Bayes with machine learning. And pattern recognition. I understand that you are talking about this is a general sense, more than just trading. And this is so true.....pattern recognition rules everything. Trading, our beliefs and responses to all sensory input. This is obviously why pattern traders have a powerful tool (if done well). Obviously with common sense money managemernt. otherwise its just illogical

Once again, I will quote Dr Brett about this aspect - Pattern Recognition: A Core Trading Competency

Big Boris covers this beautifully - Pattern Recognition And Trading Models. Let me be clear, I do not endorse or support or subscribe to him, but his articles on trading and trading behaviour are endearingly simple as he consciously (or unconsciously) covers the mental side of this in often succinct words here - Tiger Shark Trading, Daily Commentary from Professional Traders

You are more keen than I am on the math side of it, trying to quantify it and all. You may find some material here - Intelligent Trading. I found this simple stuff nifty (I assume you are way past this level though) - http://retina.cs.bilkent.edu.tr/papers/patrec_tutorial1.pdf

Unfortunately, I have made zero progress reading about stuff that interests me (in trading and general) about neuroplasticity and genesis, as well as Pattern Recognition as I got sidetracked with a final effort in understanding market profile (both time and volume based) and other volume related studies in trading recently. Ultimately realizing, after much effort that my interpretation of EW already gives me a sledgehammer and the current popularity of this hot new(?) trend of using MP is just that, another trend that will lose its lustre as everyone adopts it (which is also why I said the bit about Occam's Razor in the beginning). Simplicity rules!

Wish I found running interesting, it was/is squash that always clicked me on, physical chess my old man calls it. And so relates to trading as well - anticipation, controlled aggression, sudden violence and frequently unpredictable.

It was indeed the good man himself.......



Edit - 1025EDT: forgot that BBC Mind Changers is back with a new material..............http://www.bbc.co.uk/programmes/b008cy1j


Last edited by Deucalion; April 28th, 2012 at 11:24 AM.
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@Deucalion

Thanks for your posts! I was planning on replying now, but something has come up. I'll get it done within the next couple of days...

Cheers!


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