thread: Psychology is nothing

89980

I feel this sort of topic will probably be universal where money (however much or little is demanded ).
As an example I did a 5min scalping with a friend last night, who's only knowledge of currency coping comes from me. Kind of like the blind leading the blinder.
So I showed him several possible regions of sup and res on the hourlies afterward we moved into the 5min and took a brief on the Euro, fading a break above 700 of the high in 730.
Now as the market fluctuated it sparked a discussion on plogy and profit taking we saw the commerce venture up 25 pips then retrace, nevertheless my friend was unwilling to get out with less than 25 therefore waited, the market came back and we closed the trade to 25pips profit. We moved in another direction for 12 pips.So 37 pips from about 2 hours of scalping and 2 trades.

The result is irrelavent however because had either of us been trading alone I am sure we'd have made considerably less. The simple fact that we nursed each commerce discussing our plogy and the plogy of the market surrounding the leading and round number which we had been trading, contributed . I have even heard of folks talking to toys when investing to elucidate their feelings and ideas, to an inanimate object.

For me this kind of behaviour shows that ones plogical response to the market is of the utmost importance. The way that we behave when our pocket is under danger matters.

So I agree that when we do not have any notion of how to fill out the tank, then our operation will suffer, however if we speak ourselves throughout the process our odds might just be that much higher.

Regards,

Ed.

Ed thats an intriguing account but I think you might be creating my argument only a bit if you look at the text closely. Your expertise with your friend was one case; you would need to log thousands of those for this to be significant and a few of those interesting things we see when traders (be that they hedge funds, CTA's or private) is, they do not recount what doesn't work or when they fail. Part of the problem with the Hedge Fund industry right now is we can't get a good deal on the attrition rate because most funds only simply stop reporting... We never know if they have gone belly up or what has happned.

Another thing we all do as traders would be hang on to anything that supports what we think, even when we do not have good evidience it works. There are no doubt many traders here who ardently feel that pschology is extremely important in trading, they may not exactly know whythey read something and it made sense and they have embraced it. That's not a terrible thing, but it can be (if it costs you money in the end).

This is what we must really be asking ourselves, if we want to prove that plogy (and possibly talking to stuffed animals) has merit (I'll let you know what I do in a moment )... How do we exchange it and how can we test it out.

Lets assume that we all, as a group can agree on a series of plogical activates in the market (it will help if we've got someone with a PHD in the area ), We could probably use some of those high volatility events like NFP and identify price action before and after and then measure the market response as negative or positive before and after too, from this data we should be able to extract both short and long term achievement of the markets response to the release... Now to be certain that this will become really complied (as it must ) because you are going to have added pscholigical events just before and then also affect the audiences behavior and the significance of the release (you should already be seeing the difficulty with these versions in the market).

I have a lot of data and also have access to more; enough to derive some thing statistically significant, so I'm more than willing to aid in the project.

Letsn't wonder or argue, lets model, because ultimately the one thing that thing is... Can you exchange it. We'll end up with something which clearly identifies response or a specific activity is tradable.

Again I think we need some kind of expert to help us identify the plogical activates... Somebody who understands Conservatism and Representativeness in addition to the dynamics of Belief-based Models. Once we've got a mechanism for accurately (or somewhat accurately) Identifying the cause, we can then extract the correctness of the reation over time.

If you're interested in digging into it I want to know...

What inanimate object do I speak too? My computer keyboard I keep about six spairs from the cupboard for all those conversations. LOL

Alright... less disagreement without evidence, let's grind out a number (in between trades of course). Even if you disagree with the outcome, you will have facts which you formulate a real argument from and can pick.

That quote from Albert Einstein Really educated me Oh... I am so educated tonight

Hello Malaysia,

I really love a few of the quotes from the wonderful physicists, they range from comical to enlightening. How about this;

When I have ever made any valuable discoveries, it has been owing more to patient attention, than to any other talent. Isaac Newton.

Easy for him to mention of course, probably among the best minds to ever survive. He had been wrong about light.

97091

Ed thats an interesting account but I believe that you may be making my argument just a little if you look at the text carefully. Your experience with your buddy was a single instance; you would have to log tens of thousands of those for it to be important and a few of the interesting things we see when traders (be that they hedge funds, CTA's or private) is, they don't recount what doesn't work or when they fail. Part of the issue with the Hedge Fund sector right now is that we can't get a great deal on the attrition rate because many funds just simply stop reporting... We never know if they have gone belly up or what's happned.

Another thing we all do as traders is hang on to whatever affirms what we think, even if we don't have great evidience that it works. There are no doubt many traders here who strongly feel that pschology is extremely important in trading, they may not know why, or they read something and it made sense for them and they have embraced it. That's not a terrible thing, but it can be (if it costs you money in the conclusion ).

This is what we should really be asking ourselves, if we want to demonstrate that plogy (and maybe talking to stuffed animals) has merit (I will tell you what I do in a moment )... How can we trade it and how can we test it.

Lets presume that we all, as a team can agree on a series of plogical activates in the market (it will help if we've got somebody with a PHD in the field), We can probably use some of the high volatility events like NFP and identify price action before and after and then assess the market reply as positive or negative before and after as well, from that information we should be able to extract both long and short term success of the markets reaction to the release... Now to be sure this will become really complied (as it should) because you're going to have additional pscholigical events before and after that also impact the audiences behavior and the significance of the release (you should already be seeing the difficulty with these versions in the market).

I have tons of information and have access to more; enough to derive some thing statistically important, so I'm more than prepared to help in the job.

Letsn't wonder argue, lets version, because in the end the one thing that thing is... Can you trade it. We'll end up with something which identifies reaction or a specific activity is tradable.

Again I think we need some type of pro to help us identify the plogical activates... Someone who knows Conservatism and Representativeness in addition to the dynamics of Belief-based Models. Once we've got a mechanism for accurately (or somewhat accurately) Identifying the trigger, we can then extract the correctness of the reation as time passes.

If you're interested in digging into it let me know...

What inanimate object do I speak too? My keyboard; I maintain about six spairs from the closet for all those conversations. LOL

Alright... less disagreement without evidence, let us grind out some number (in between trades of course). Even in the event that you disagree with the outcome, you'll have facts which you invent a real argument from and can pick.

I completely agree with all the sample size thing, however it was the experience of earning a joint trade though attracted the plogical talk into the fore, instead of sweeping it under the carpet. I would be interested in attempting to derive something solid.

With respect to some pro in plogy I genuinely feel that this type of thing does not exist. Until neuroscience can proxy the human mind then all plogy will be little more than conjecture IM(NS)HO.

That said I think we can still have a crack in modeling high volatility events. The very first problem is that we don't know how many men and women try to fade the spike. This is pure involvement, trusting the greed of the market. It fits into the greater fool method of operating I think.
That said I'd guess the forex is most likely the ideal arena for this kind of experimentation, even as it seems to lack worth players and plays host to some profusion of newbie speculators like me.

Anyhow in the event that you've got something then please post it up.

Regards,

Ed.

89980

Hi,

I truly love some of the quotes from the great physicists, they range from hilarious to enlightening. How about this;

When I have ever made any valuable discoveries, it's been owing more to patient attention, than to any other ability. Isaac Newton.

Easy for him to mention of course, probably among the best minds to ever live. He had been wrong about mild however.

You mean patient as in patience? Still having trouble in ENGLISH as it is my 2nd language

If that what you mean... well... the secret to find anything needs patience. After all... patience is the merit

Ironic is not it? He came out with the theory... just later on a second physicist came out with the hard facts and proven experiments... confirming that he was incorrect about the mild

89980I got nuttin (not yet anyway)... The reason why I believe we need a professional involved is as we know there is a vast of amount of plogical study information out there and with somebody who understands its impliions is and its own implamentations is valuable to the work. When we make assumptions about market reaction without really understanding the work that has been done on plogy than we are likely to be guessing on the trigger, and Behavioral Finance.

The dialogue this far has been about the significance of plogy in trading; it wouldn't make sense to just randomely research evaporating a spike unless we were able to clrearly identify a mass plogical reaction. The measurment ca be indentified and if we can't we must question using inclusion of the approach.

How can we know whether its greed or feer that is casuing the change? You would need to know more the trader opinion because account financing could also play a role. If twenty traders with 10,000 accounts were buying (from feer of missing another move upward ) but one trader with a 10,000,000 account was selling (from greed to protect everything he had), how can we weigh it at the version, how do we even differentiate it?

My gut feeling is, because we're mental beings, plogy will play a part in the decision making process; but seeking to make decisions based on the mass plogy of the market will be hard if not impossible to do, because we could never know the exact motivation behind all of the individuals from the audience. Fear and greed can aline providing a singular, result that is undistinguishable; never creating the trigger clear.

I'm all for study in my limited skill, but do not want to contribute to the mis-eduion of the market (you will find enough Idiot Gurus out there already). We need to possess participants that are knowlegable if we are going to run a study. I know squat about behaviour finance...

If Plogy is a good trade version, certainly we must possess one PHD among people who undertands and utilizes it...

Well the good news is, I have not needed to chat with my keyboard now... Perhaps I need a plogist!!!

89980

The other day I went to click from a trade, also got a requote. I clicked without assessing what I was doing, and the trade closed.

When I checked history to log the trade, I found that I got 1 pip less than that I supposed to. Blasted requotes! I'd clicked on the OK button and let them choose my pip. Damn brokers.

Well, now it happened again, and I said no. Greed came into the picture. I waited to find that one pip back. The final result of the trade was that I dropped 2% of my account rather than take 1 pip less.

From now on, I won't wait. It is time to get out if it's time to get out. I will OK the requote.

Should I lose a pip, that's the cost of doing business.

I know now.

Do not be a prick over a tick.

I read that someplace. Sounds applicable here.

89980

You mean patient as in patience? Still having trouble in ENGLISH as it is my 2nd language

If that what you mean... well... that the secret to find anything demands patience. After all... patience is the merit

Ironic isn't it? He came out with the theory... only later on a second physicist came out with the hard facts and proven experiments... confirming that he had been incorrect about the mild

Yeah it signifies patience. (patient past tense)

Item is all these wonderful geniuses had their failures, however all of them share an incredible ability to visualize things and think outside the box. For example when devising ideas, Einstein used to consider fling at a craft. Thing is it was approximately 60 years before spacecraft existed.
A real visionary!

89980

Yeah it means patience. (patient = past tense)

Thing is all these great geniuses had their failures, but all of them share an incredible ability to visualize things and think outside the box. For example when formulating ideas, Einstein used to consider fling in a space craft. Thing is that it was about 60 years before spacecraft existed.
A real visionary!

A real visionary he was If only he's still alive... he can predict the market... what gont occur in 60 years time This thread actually electrifying me at quarter to 3 in the afternoon over here

89980

Yeah it means patience. (patient = past tense)

You're right, it's past tense, but it's also present and future.

Sorry to be picky, but he is trying to learn English.

When someone has been patient, we say they have patience. It's a feature.

Past stressed would be

He had been patient. He'd patience.
I had been individual. I had patience.
You're individual. You had patience.

Future is the same.

I'll be patient. I'll have patience. etc..


Then there is the homonym. Sounds the same definition.
The physician had a patient. He had several patients daily.

That term, individual, means somebody being treated by a physician or such.

89980How do we know if its greed or feer that's casuing the change? ...

My gut feeling is, because we're emotional beings, plogy will actively play a role in the decision making procedure; but seeking to make decisions based on the mass plogy of the market will be hard or even impossible to perform, because we can never know the precise motivation behind all of the people in the audience. Fear and greed can aline giving a singular, result that is undistinguishable; never creating the trigger clear.

I am all for research in my limited skill, but do not need to donate to the mis-eduion of the market (you will find sufficient Idiot Gurus out there already). If we are going to conduct a study that is meaningful we need to possess participants that are knowlegable. I know squat about behaviour finance...

If Plogy really is a good trade model, certainly we must possess one PHD among people who undertands and uses it...

Well the good news isI haven't needed to chat with my keyboard today... Perhaps I want a plogist!!! [/quote]


Have you ever heard of market manipulations, you will find a lot going on in the stock market. They can create a wreck to take advantage traders that are in a weaker position in the market. 1 example, stocks often are dropped around the close of the year and continued to drop till the end of January, the reason for this was funds want to shut their positions out to show some profits meanwhile dropping prices until the the stocks tend to be cheaper so they can reenter and continued the cycle...

In fx, I think some collapses and spikes are due to market manipulations too; these is a wet dog concept, whose trying to shake and shake his wet hair like shaking a weak player from the market.

Just a few interesting food for thoughts,