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Koyaanisqatsi Hototo--wldman out of balance
Started:May 14th, 2012 (07:40 PM) by wldman Views / Replies:49,773 / 695
Last Reply:November 1st, 2016 (03:53 PM) Attachments:53

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Koyaanisqatsi Hototo--wldman out of balance

Old April 23rd, 2014, 10:12 AM   #481 (permalink)
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Moving left to right...

the next screen over, except advanced a few more price bars:

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back in a few...swinging from one crisis vine to another here

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Old April 23rd, 2014, 10:19 AM   #482 (permalink)
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how we decide chapter 3: fooled by emotion,(or why is so difficult to beat the market


alejo View Post
he explains how is the learning process in the brain process of trial and error, and the emotions re-inforces by feedback trough the dopamine , filling and increasing the data base of our mind with knowledge/emotions.
we use that info automatically when we feel intuitions.
the professionals trough intensive and appropiate trainning process, got filled their memory with rights materials to get right intuitions and solve complex problems sucesfully
military, champions of chess players, poker players, etc , make the decisions based on their intuition-answer, detected for their experiencies, and a lot of feedback received trough the process.
he explain that the key for the feedback is the emotion we feel
if we do not feel the pain of a loss, we do not receive the feedback, and we do not learn from that loss

also the process is related for the expectation we have from a given outcome, when i expect that a stock go up if happens x, and it will not go up, that bad outcome gives me a feedback , usefull for the next time.
and then so ,and so ,after a long time practicing ,it looks like i will learn from that.

i can see severals interesting things:
to feel emotions, and learn from those is better than to tray to avoid them.

A complicated thing for trainning to become a trader is ,with so many possibilities, when i change the variables, i start receiving random emotional feedback and learning nothing for the future, or worse learning to become crazy and stress

more clear why to stay trading only one instrument

he says that profesionals see at a glance ,when something is going good or bad, with the emotional feedback, then i think that work with something easy to see will be much better (1 screen against 6 screens, for example)

he says that it is a key to make a lot of mistakes , to start the feedback process and learn from them

he says that is a key the way how we try to learn, to add each time that we make a mistake

i think : in trading, with random outcomes, the feedback process it will be very difficult to work well like in others normal activities without random outcomes?

chapter3 commentshe summarizes: "it is silly to try to beat the market with our brain")

here we have 4 main points with 4 main problems of our brain:
a)addiction to randomness(gamble/trading)
b)appreciation errors with randomness
c)loss aversion
d)debt increase tendency&buy now pay later

a)addiction:It works in this way
we have a mechanism in our neurons/dopamine system, that we use to predict the future, and when we have the result, we receive a dopamine feedback, that help to call the brain attention, to learn and adjust behaviorfor the next time.
the problem with random events, is that is not nothing to predict,it is not predictable, then our brain functions bad, when i got the expected outcome i receive ,not only the normal feedback of dopamine to get the prize, i received an extra 4xtimes more of dopamine because the surprising event.More surprise more excited.(this is for an extra of attention to our brain to learn from that event).
In normal events according we spend more time and gain more experiences, the brain began accustomed to those events while we learning.
But in gambling and trading, it is not possible predict the future, then the brain ,instead of stop, start to obsess with the process, when I win, i receive high excitement, it that win it is a surprise, more excited.
Neurons do not found out a pattern of what is happens, then they can not adapt to the situation
I get blind for the wiinings and I lost slow everything

b)appreciation errors with randomness
The neurons only can help with predictable events, for example in a test he found that:i f an event occurs 60% of the times, a rat can find out the answer,the place where the feed appear 60% of times , but universitaries, try to find out the inexistent pattern of how the food appear in that place and only win on 52%
our brain get trapped on the recent events or recents winning or losings strikes, and we think we know what happen, but not.
The gambler fallacy, "we believe that an event is more or less likely, according what has occured."
The mind try to find pattern but there are not
For traders, in the markets, does not work the "what if.." or learning trough errors, because, when something happen, i try to correct the behavior next time because i thing there was a mistake, but it was not a mistake
Also theres a problem with our mind that when we see what we got and compare with what we would get if..
i won $50 but i would win $500,when we see this next time we will try to change the things, but they did not work
And we can get buying tops and selling bottoms, also he comments this can make the bubbles markets happens
dopamine system did not was made to fight with the random oscillations of the market
when we take decisions about markets and investment we follow our primitive rewards circuits.

c)loss aversion
we reject sure loss an we prefer a very little posibility not to lose (move stops, big loss,etc)
also a loss is heavier than a win
pain -100 is > +100 prize
-50-50-50-50 >-200 pain
when we lose we do not think well
we try not to lose (although to cut quick the losers)

d)credit card ,debts, we think i buy now, i get debt now, and i do not worry how i will paid in the future

well i think this chapter is really heavy and hard, to think and re think how our intrinsic instints push our decisions, and we need to fight against that to trade well

maybe the trading rules ,set stops and targets before enter the trade (and respect them)has that purpose

how we can train this?

La lucha es de igual a igual contra uno mismo
The fight is fair against oneself
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Old April 23rd, 2014, 10:36 AM   #483 (permalink)
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alejo View Post
how we can train this?

Only by making executing the process well the reward, not the money.

Travel Well
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Old April 23rd, 2014, 10:37 AM   #484 (permalink)
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So, the next chart over...

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we can check the shorter timeframe, but that wont negate this sell....the shorter tf just helps with timing.

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Old April 23rd, 2014, 10:41 AM   #485 (permalink)
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Okay, gotta scoot...

Futures Edge on FIO
for the day.

Thanks for all the well wishes for my mom. She has a procedure today and then we should know more.

@alejo

Due to the circumstances I'm having a hard time keeping up and posting based on the reading, but I will get to that I promise. If anyone else cares about that book, though the author has been accused, let alejo know he can link you.

Dan

PS we could also read any of Nic Taleb's works, or Denise Shull (who has done seminar here) to the same effect of understanding the cognitive process.

But to answer alejo's question while on the run I'll simply quote Tao Te Ching #8 made more famous by Guro Bruce Lee..The highest good is like water...be like water.


Last edited by wldman; April 23rd, 2014 at 10:52 AM.
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Old April 24th, 2014, 08:05 AM   #486 (permalink)
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It will be another...

short day for me.

Trendies are showing me nothing. As noted yesterday, earnings can move markets pretty quick...be aware of who is reporting when. Volume is again better this morning, looks to have picked up a bit as US desks fill in.

So, trend, volume, rotation to NY, news, schedule.

Real News...no SIM

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Econ Release/speakers:

Ignore Draghi at your own peril, some attention on US numbers too as weather is no longer an excuse.

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Old April 24th, 2014, 08:20 AM   #487 (permalink)
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Okay...

I do not have a real good handle right now. Many distractions here. Seems if I had a view on 6E it would be slight bear as we can see successive lower highs since yesterday afternoon. Support looks like .3810ish. I'm not hearing about any orders or any big desks with anything to do. Volume seems direction neutral so it looks like the world, at least right now thinks this is a fair price 1.3822.

I am destined to be a one lot trader till I can say I'm not a risk dummy or a risk wussy. I definitely do not feel clueless, but the clues are not saying much. If I had to flip a coin here...I'd go back to bed.

On ES, which is a secondary market for me...DANG that AAPL numba rocked. If we support the 1880-1881 level we could see 1900 imo, with continued good news. Gold is lagging kinda big and while I don't think it is typical "risk on", I feel like it could go that way with flows into equities that could no doubt signal a charge in like general admission at a Grateful Dead show. Biggest item to note from me would be do NOT be sporty today and keep it close to the vest risk wise.

Dan

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Old April 24th, 2014, 08:56 AM   #488 (permalink)
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Look at that...

20 minutes later and we are still 1.3821 bid.

This is when guys tend to force trades....to get something on and ignore that flat is a valid position. In the crowd it is when the shenanigans kicked in to high gear. You'd find all kinds of decorations hanging off you, your badge stolen, modified and returned to your pocket.

One of my favorites was when I was still pretty new in the crowd. I had recently upped my size to like 100 up...which is still small, but big enough for the guys to consider you when a bad do came in to the crowd. The rule of thumb is, if the crowd is long premium and choking on it, you up your size on the buy side first...to sort of take the pressure off them and fit in. They are still going to want to sell first and sell more, but this is how you fit in with the crowd dynamic.

Remember WCOM? That traded in my crowd. A bunch of the guys where long premium and choking on it. They where gone at the Salt Lake Olympics when I showed up in the crowd. OGR came in asking for a market on front month WCOM puts, the 5's and the 2 1/2's. I was first and ALL the guys in the crowd and the floor broker, yell SOLD!

WLD bot 800 puts to fit in. By that afternoon someone had crafted a beautiful set of spurs...covered in tin foil and colored with markers. The spurs where attached to my shoes and all day I could not figure out why guys where calling me "Hoss", and saying "Howdy". My wife picked me up on Wells at 3:30 and the spurs where still intact...we laughed our asses off. But before expiration WCOM went away and I was selling unhedged stock at 2.50 and 5 bucks. I think I still have the spurs.

Dan

look 36 min later we are still 22@23.

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Old April 24th, 2014, 09:13 AM   #489 (permalink)
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Adaptive_CCI_db Indicator

If anyone wants to adjust the location of the "Adaptive Period" print on the Adaptive_CCI_db Indicator . . . instructions follow . . . Provided by @Zondor . . .

@rickr, it's on Line 211.

If you open the indicator for editing, the code editor will show you, in a dropdown box, the options for the text position property of the DrawText method. . . .

Once again thx to @Zondor

rickr

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Old April 24th, 2014, 09:21 AM   #490 (permalink)
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Thanks...


@rickr and @Zondor

That cat Zondor has helped with many items. If your item has been "Zondored" you can rest assured that it is efficient and working as it is supposed to. A great contributor to the forum, for sure. Also, while I do not use his evaluation metric as it is not available to me...I definitely endorse his approach.

Dan

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