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Simba, The Best Trader in the World
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Simba, The Best Trader in the World

  #41 (permalink)
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Zoethecus,

There is nothing wrong with a bit of arguing, as long as you stay on topic. Please understand that the initial purpose of every thread in this forum, is to share knowledge that will improve the readers perspective and knowledge. If we start to fall of the topic, then we risk to give birth to situations that are time demanding, as well as we risk to create a scene that can lead to conflicts.






Zoethecus View Post
What's wrong with a bit of arguing? As long as people are being civil and not turning the thread into a slugfest, I see no harm.

I have noticed an uptick in the censorship at futures.io (formerly BMT) lately, which is unfortunate.


We all struggle to make tomorrow look like yesterday!
Get rid of your past and let the future unfold from the now.
Past performance is not indicative of future results.
/George
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  #42 (permalink)
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Hi George,

if you start a thread "Simba, The Best Trader in the World", and it turns out that Simba is not a lion, but just a dog - a dog that we do not know, maybe a poodle, a pekingese or one of the Dogs of the Dow - there is a high probability that some of us posting here search for distraction. The discussion turned around the important question, whether the personality of a dog fits a trader, and it is no wonder that gradually it went on to include rats and cats.

Some posted here for mere enjoyment, others took it seriously even trying ot include some insults. I had to laugh a number of times, so it is a good thread.

And I learned that I am a bad communicator, because I cannot formulate single-sentence posts. Sorry for that.


Last edited by Fat Tails; July 5th, 2010 at 05:16 PM.
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  #43 (permalink)
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Hi Fat Tails,

I'm glad you're enjoying the thread!

We all struggle to make tomorrow look like yesterday!
Get rid of your past and let the future unfold from the now.
Past performance is not indicative of future results.
/George
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  #44 (permalink)
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Arguing vs. Discussion

Discussion is what the forum is all about, and those discussions can lead to debate. However, arguing is not what the forum is about, and is not allowed here. There is an important distinction.

If you don't agree with what is being discussed in the thread, then by all means share your views in a civilized manner and bring something new to the discussion, as long as it is on-topic and furthers the debate. But posting for the sake of simply being argumentative is not "positive thinking" and not allowed here.

As Fat Tails mentioned, threads evolve over time and that is fine and expected. But snappy one-line witty "comebacks" are just argumentative and detrimental to the discussion, and aren't allowed.

Hope it clears up everything, and I look forward to more posts. If you disagree with this post and want to discuss it, please start a new thread so we don't continue further off-topic in this one.

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

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  #45 (permalink)
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Fat Tails,


Sure patience is important, but it is also a subjective aspect when we speak about different factors that can have a positive or a negative impact on our trading.

And I still don't see the evidence for any granted gratification due to those 3 variables that defines the future price action. And I don't really see any difference between instant gratification and gratification.

You're still projecting a mental picture into the future, that is based on a positive outcome (gratification). That decision and action which is based on your mental picture is taking place in the now moment. If that picture is based on your immediate future or your delayed one, has nothing to do with your actual outcome. But it has everything to do with your expectations and the actions you're taking.

You either get it or not. If you don't get it that's when you get in trouble. And how a trader handles trouble is what will make him a successful trader or not!








Fat Tails View Post
I just wanted to say that the most difficult thing with trading is patience. Brett Steenbarger - in his trader feed blog - mentioned that he had a much higher probability to fail, if he entered a trade during the first 15 minutes of his session. I had the same experience. When the market opens, I am eager to trade, but I have to hold back myself and wait for an appropriate setup.

I am a discretionary trader, that means that my setup and trigger bars are defined, but depending on other criteria, I might not take the trade. Patience is what refrains me from overtrading, and patience is what lets my winners run. Gratification comes from finally entering a trade after that waiting period and exiting the trade, when booking profits.

The cat only has an edge, if the bird comes close enough, and there is some discretion to define what is close enough. My countertrade setups have some discretion to define a high volume churn bar, the volume churn can be outstanding (the bird is really close) or just meet the defined criteria, which would be the highest volume per range during the lookback period of 20 bars (the bird is actually close enough to try, but it might be a failure).

What I wanted to say: The dog looks for instant gratification. As a trader you should not do that, because the need for instant gratification will lure you into bad trades and let you exit good trades early! This is why trading is counterintuitive.

So actually I need to rationalize, because this is the only way to fight my intuition, which tells me "that trade looks good, just enter it" or some time later "quick, quick, take your profits before you lose it again". Yes, I am suffering from from two ailments -> pattern completion (brain anticipating or completing something that is n't there) and -> loss aversion. The most difficult part of trading is to overcome them and follow your rules.


We all struggle to make tomorrow look like yesterday!
Get rid of your past and let the future unfold from the now.
Past performance is not indicative of future results.
/George
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  #46 (permalink)
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I think there is a difference between instant and deferred gratification. May I just cite from Wikipedia:

"Deferred gratification or delayed gratification is the ability to wait in order to obtain something that one wants. This attribute is known by many names, including impulse control, will power, self control and, in economics, "low" time preference. In formal terms of accounting, an individual should calculate net present value of future rewards and defer near-term rewards of lesser value. Extensive research has shown that animals don't do this, but instead apply hyperbolic discounting, so this problem is fundamental to human nature."

Simba settles for hyperbolic discounting, so its choice is inconsistent over time. Humans are capable to settle for future rewards and not fall prey to take profits immediately. For a further explanation of the difference between instant gratification and deferred gratification, see also concept of the ID and the EGO, as explained by Sigmund Freud. Below is a link to his text "Das Ich und das Es" from 1923.

http://www.psychanalyse.lu/Freud/FreudIchEs.pdf

So a good trader may not rely on the ID, which is driven by the subconscient. Trading is counterintuitive. To overcome the instincts you need a plan, so the EGO needs to take control over the ID. And yes there is a difference between instant and deferred gratification, and there are different discounting mechanisms. Patience means following an exponential and not a hyperbolic discounting path. Ask Simba, whether he agrees.


George View Post
Fat Tails,

Sure patience is important, but it is also a subjective aspect when we speak about different factors that can have a positive or a negative impact on our trading.

And I still don't see the evidence for any granted gratification due to those 3 variables that defines the future price action. And I don't really see any difference between instant gratification and gratification.

You're still projecting a mental picture into the future, that is based on a positive outcome (gratification). That decision and action which is based on your mental picture is taking place in the now moment. If that picture is based on your immediate future or your delayed one, has nothing to do with your actual outcome. But it has everything to do with your expectations and the actions you're taking.

You either get it or not. If you don't get it that's when you get in trouble. And how a trader handles trouble is what will make him a successful trader or not!


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  #47 (permalink)
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Fat Tails,

But you still haven't implied the 3 variable for the possible outcome (after you take the trade) in your equation!
You gave me a german text written by a dead guy that saw the world through phallus symbols. The world today is starting to adopt an implementation of something called consciousness, among other things. We tend to become somehow more open minded, and we kind of don't try to kill those guys that are telling us that the Earth is flat.

If I'am speaking to a scientist here, I might be walking on dangerous ground. But I do take my chances as mainstream science has taken over the role of censorship from the church.

It's not going to hang you or burn you alive, but it's going to create an an even worse scene for you. Namely the one with the lack of audience. If it's not scientific we don't believe it.



Anyhow.....I do want to disagree with you on the part where trading is counter intuitive, due to the simple role that our subconscious plays in our life. The subconscious mind perceives about 1 000k bits /sec of information more than the conscious mind. And if trading is about filtering out and selecting information, then you tell me how can our conscious mind outperform that?

Now, intuition always works better than our rational part in case we've learned how to distinguish between the two. Unfortunately most people never learn that at all!





Fat Tails View Post
I think there is a difference between instant and deferred gratification. May I just cite from Wikipedia:

"Deferred gratification or delayed gratification is the ability to wait in order to obtain something that one wants. This attribute is known by many names, including impulse control, will power, self control and, in economics, "low" time preference. In formal terms of accounting, an individual should calculate net present value of future rewards and defer near-term rewards of lesser value. Extensive research has shown that animals don't do this, but instead apply hyperbolic discounting, so this problem is fundamental to human nature."

Simba settles for hyperbolic discounting, so its choice is inconsistent over time. Humans are capable to settle for future rewards and not fall prey to take profits immediately. For a further explanation of the difference between instant gratification and deferred gratification, see also concept of the ID and the EGO, as explained by Sigmund Freud. Below is a link to his text "Das Ich und das Es" from 1923.

http://www.psychanalyse.lu/Freud/FreudIchEs.pdf

So a good trader may not rely on the ID, which is driven by the subconscient. Trading is counterintuitive. To overcome the instincts you need a plan, so the EGO needs to take control over the ID. And yes there is a difference between instant and deferred gratification, and there are different discounting mechanisms. Patience means following an exponential and not a hyperbolic discounting path. Ask Simba, whether he agrees.


We all struggle to make tomorrow look like yesterday!
Get rid of your past and let the future unfold from the now.
Past performance is not indicative of future results.
/George
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  #48 (permalink)
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Enjoying your replies, George....

This one needs several answers, so I'll split that up!


George View Post
Fat Tails,

The world today is starting to adopt an implementation of something called consciousness, among other things. We tend to become somehow more open minded, and we kind of don't try to kill those guys that are telling us that the Earth is flat.

May I assume that you are a creationist? And do you think that that humans are becoming more conscious and open-minded?

Someone in this forum has cited Gann, I have not verified that this was done correctly "If you will only study the weakness of human nature and see what fools these mortals be..."

The guy who cited Gann would disagree with you.


George View Post
Fat Tails,
If I'am speaking to a scientist here, I might be walking on dangerous ground. But I do take my chances as mainstream science has taken over the role of censorship from the church.

It's not going to hang you or burn you alive, but it's going to create an an even worse scene for you. Namely the one with the lack of audience. If it's not scientific we don't believe it.

Nope, I am not a scientist. Agree with you here, science is used as an alibi most of the time, also see chapter 2 "The Concept of The Conventional Wisdom" by John Kenneth Galbraith in his book "The Affluent Society".


George View Post
Anyhow.....I do want to disagree with you on the part where trading is counter intuitive, due to the simple role that our subconscious plays in our life. The subconscious mind perceives about 1 000k bits /sec of information more than the conscious mind. And if trading is about filtering out and selecting information, then you tell me how can our conscious mind outperform that?

Now, intuition always works better than our rational part in case we've learned how to distinguish between the two. Unfortunately most people never learn that at all!

Let me propose a compromise. Trading is counter-intuitve in the first place, as it needs planning and rationalizing to overcome basic weaknesses, such as greed, fear or loss-aversion. The dificult part of trading is unlearning the offensive behaviour and learning new rules. I love the books of Brett Steenbarger. He well describes this difficult task.

Once you have learned the new behaviour and repeated it over and over again, your subconscious will take over and perform tasks more efficiently. But this requires thousands of hours of well-spent screentime.

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  #49 (permalink)
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I have to be careful with my replies, cuz I feel like a lightweight in the ring with two heavyweights But, I will say that I agree that trading is counter-intuitive. It seems to me it goes against human nature (well, at least trading in a way that is long term profitable does).

I know that I fought this area for a while, wanting to be right, always placing blame elsewhere. I think that is human nature. You have to accept that often times you will be wrong more than right, and you also have to accept 100% of the responsibility for your trades and actions (the net result). You cannot place blame elsewhere -- ie, broker, big bad bank, indicator, lunch break, phone call, etc.

Worse still are the ones were you partially (but not really) accept responsibility like "if I had only noticed that xyz, then...". I say "worse still" because these habits are particularly difficult to shake, in my opinion. You kind of accept responsibility, but not really. And the truth is, what you probably need to focus on is the reality that you may be trying to process too much information (ie: too many indicators, too many charts, too many markets). So instead of saying "if only I had noticed xyz" I think the true way to accept responsibility would be to say "I can't do this." (it's a start).

I'm going off on a tangent, but whats new. Too often I see traders constantly changing gears, even after they agree to my "2 for 2" rule (don't change anything on your charts for two weeks, each day you must grade yourself on two distinct and specific goals, and then at the end of the two week period you can make only two changes to your charts). They agree with the idea or concept of that, and understand what the goal is. But, they can't do it. There is always an excuse, but many times they change something or don't follow through. Before long, they've changed nearly everything --- except themselves. They've changed charts, indicators, markets, timing, signals, stops, targets --- everything except themselves. And I'm a firm believer you can make money with most any chart or indicator, most any market. I'm a believer than the majority of the necessary edge comes from within yourself, not some external factor like a chart or tool.

Mike

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
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  #50 (permalink)
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I fully agree with this. It is necessary to reduce information because we cannot process much of it, and we are lost, when we get conflicting signals. After all, by design, markets produce conflicting signals at any moment, as the number of buyers equals the number of sellers.

So you need to train your brain/subconscient to process complex information. This training requires that you do not change your setups and indicators. If you use the Stochastics, you should continue to use it, until you know all the turns and twists. If you prefer the CCI, it is fine as well. But you cannot use both of them, one oscillator should be enough.

I have seen so many complicated approaches, starting with the counting of waves as suggested by Elliot Wave Theory, going on to the clustered geometrical charts of Bryce Gilmore, etc. All these approaches are highly subjective, if not somewhat peculiar. But some of the traders using them are highly succesful. I believe that this success is not due to the approach being superior, but just follows from repetitive learning.

If you count waves, there are always several ways of counting the numbers, and only hindsight will tell you, which was the correct one. So for me the counting itself has limited predictive value. But trying to do the count forces you to consider different scenarios. It also forces you to measure volatility and think about cycles. So in a way it helps to explore the price-time-relationship, which is essential to develop an understanding of the market.

But again, progress can only be achieved by limiting the information that needs to be processed.

Big Mike View Post

And the truth is, what you probably need to focus on is the reality that you may be trying to process too much information (ie: too many indicators, too many charts, too many markets). So instead of saying "if only I had noticed xyz" I think the true way to accept responsibility would be to say "I can't do this." (it's a start).

I'm going off on a tangent, but whats new. Too often I see traders constantly changing gears, even after they agree to my "2 for 2" rule (don't change anything on your charts for two weeks, each day you must grade yourself on two distinct and specific goals, and then at the end of the two week period you can make only two changes to your charts). They agree with the idea or concept of that, and understand what the goal is. But, they can't do it. There is always an excuse, but many times they change something or don't follow through. Before long, they've changed nearly everything --- except themselves. They've changed charts, indicators, markets, timing, signals, stops, targets --- everything except themselves. And I'm a firm believer you can make money with most any chart or indicator, most any market. I'm a believer than the majority of the necessary edge comes from within yourself, not some external factor like a chart or tool.


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