Deliberate Practice; Overtrading

Trading is often about how to take the appropriate risk without exposing yourself to very human flaws.
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SweetLyrics
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I hadn't come across this before - I like it! The things us humans fall out over! :lol:

I imagine that most quants and discretionary traders have a great deal in common, in that they will use systematic approaches (even if the approaches used by the discretionary traders may be unconscious).

I suspect the basic difference is that, whereas a discretionary trader will have a glance at the charts to determine (for example) the overall trend, the quant will use technical measures such as MA.

They play to different strengths. The quant probably usually needs to have good computing and analytical skills to find a combination of indicators that express what the discretionary trader may see in the blink of an eye, whereas the discretionary trader needs to have strong discipline and the ability to see the market as it is, not how they wish it were.

Allow me to also include a centuries old quote, which I feel is relevant (especially to discretionary trading):

"Beauty is truth, truth beauty,—that is all
Ye know on earth, and all ye need to know."

From Ode on a Grecian Urn
BY JOHN KEATS
ShaunWhite wrote:
Sat Sep 21, 2019 1:08 am
Though the war is bitter and violent, the conflict between the nations of Lilliput and Blefuscu started because of an absurd disagreement: Lilliput believes an egg should be broken from the small end, while Belfuscu believes it should be broken from the big end.
SweetLyrics
Posts: 207
Joined: Sat Jun 16, 2018 7:57 pm

At the risk of annoying Simon, I still think he should try a bit of deliberate practice of discretionary trading, using £2 stakes.

Worst case scenario, he has some fun but gets nowhere and decides to revert to trawling through data for an elusive edge.

Best case scenario is that he ends the day in profit and thinks 'No way! I might actually be able to make money doing this, and it beats the hell out of spending the day with my head stuck in a spreadsheet, going round and round in circles! From now on, I'll leave the big data stuff to the guys with degrees in computing and statistics, and stick to what I'm good at'.
eightbo wrote:
Sat Sep 21, 2019 3:29 am
I would love to stay and point you to the light Simon but I'm not sure this is much related to Deliberate Practice.
arbitrage16
Posts: 532
Joined: Tue Feb 14, 2017 7:27 pm

ruthlessimon wrote:
Fri Sep 20, 2019 5:38 pm
eightbo wrote:
Fri Sep 20, 2019 1:36 pm
Focusing on quality and upping size on those few trades a day is way harder for me than mindlessly chopping around all day taking 50+ discretionary trades but it's a form of purposeful/deliberate practice so you know if you're not at least a little outside your comfort zone you're just practicing naively (so you'd better be satisfied with the results your current skill set fetches you!).

I should add that what we're deliberately practicing needs to be the 'correct technique' i.e. something that's actually going to improve your trading — You can go through the discomfort of learning the precise motions of a bad tennis serve until you have it down cold but would that actually help your game? If it was the first serve you learned you'd probably even be net-disadvantaged for your efforts.
I like those points :)

But the bigger worry for me, connected to your tennis analogy is a "rule change".

What if the atp decide: "We're not gonna serve diagonally anymore, we're gonna serve straight".

Personally, that would take me months/years to spot - especially if diagonally had been the convention for the last 100yrs. Let's say 6mths later I'm fed up of consistently losing by severing the old way - I make the change. But then the atp come out & say: "We don't like severing straight, we're going back to convention".. then the old trend reasserts :x :x :x Fickle bastards :lol:

It's almost like every trader needs "a higher edge". We need an edge for trading the market, but we also need an edge for trading the "results" of that edge - cos in theory we're basically trading it like a trend!!!

Tl;dr: When our equity curve falters is this a natural drawdown, or a fundamental shift? - & if it's the former, why ever work on improving edge?
Mate you've just completely de-railed this thread by focusing on your own issue which is totally unrelated to deliberate practice. The OP put a lot of energy into creating a considered and researched post to get people thinking and talking on a topic that has scant coverage in the trading community, and you use this as an opportunity to express your various fears about the future.
jamesg46
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I appreciate eightbo starting this thread and bringing my attention to deliberate practice, here is a decent video to get us back on track.

https://youtu.be/1-sjUoGO250
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ruthlessimon
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arbitrage16 wrote:
Mon Sep 23, 2019 5:53 pm
ruthlessimon wrote:
Fri Sep 20, 2019 5:38 pm
eightbo wrote:
Fri Sep 20, 2019 1:36 pm
Focusing on quality and upping size on those few trades a day is way harder for me than mindlessly chopping around all day taking 50+ discretionary trades but it's a form of purposeful/deliberate practice so you know if you're not at least a little outside your comfort zone you're just practicing naively (so you'd better be satisfied with the results your current skill set fetches you!).

I should add that what we're deliberately practicing needs to be the 'correct technique' i.e. something that's actually going to improve your trading — You can go through the discomfort of learning the precise motions of a bad tennis serve until you have it down cold but would that actually help your game? If it was the first serve you learned you'd probably even be net-disadvantaged for your efforts.
But the bigger worry for me, connected to your tennis analogy is a "rule change".
Mate you've just completely de-railed this thread by focusing on your own issue which is totally unrelated to deliberate practice. The OP put a lot of energy into creating a considered and researched post to get people thinking and talking on a topic that has scant coverage in the trading community, and you use this as an opportunity to express your various fears about the future.
personally I disagree.

The problem with deliberate practise is that edges/rules change over time. But unfortunately, I don't have an answer - hence why I queried Eight - I bl00dy wish edges never change, but unfortunately they do!!
SweetLyrics
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Joined: Sat Jun 16, 2018 7:57 pm

Indeed, but possibly not to the extent that you think.

I know pros who have used particular approaches successfully for many years.

The human irrationality underpinning market dynamics doesn't change overnight.
ruthlessimon wrote:
Mon Sep 23, 2019 6:59 pm
I bl00dy wish edges never change, but unfortunately they do!!
jamesg46
Posts: 3769
Joined: Sat Jul 30, 2016 1:05 pm

ruthlessimon wrote:
Mon Sep 23, 2019 6:59 pm
arbitrage16 wrote:
Mon Sep 23, 2019 5:53 pm
ruthlessimon wrote:
Fri Sep 20, 2019 5:38 pm


But the bigger worry for me, connected to your tennis analogy is a "rule change".
Mate you've just completely de-railed this thread by focusing on your own issue which is totally unrelated to deliberate practice. The OP put a lot of energy into creating a considered and researched post to get people thinking and talking on a topic that has scant coverage in the trading community, and you use this as an opportunity to express your various fears about the future.
personally I disagree.

The problem with deliberate practise is that edges/rules change over time. But unfortunately, I don't have an answer - hence why I queried Eight - I bl00dy wish edges never change, but unfortunately they do!!
My understanding so far is, deliberate practice can be used to develop an edge, maintain the effectiveness of an edge or make the edge better through efficiency etc. There are repeat situations that acurr and deliberate practice can help to build around this. Unless you're deliberately practicing finding your edge has become useless more effectively then I'm not sure I understand your point.
SweetLyrics
Posts: 207
Joined: Sat Jun 16, 2018 7:57 pm

I think that Simon thinks that edges are only to be found from searching for obscure nuggets in quantitative data, rather than run of the mill stuff like discretionary range breakout trading or swing trading (and he isn't even prepared to try out discretionary trading using £2 stakes, just on the off chance that he's wrong).
jamesg46 wrote:
Mon Sep 23, 2019 7:22 pm
My understanding so far is, deliberate practice can be used to develop an edge, maintain the effectiveness of an edge or make the edge better through efficiency etc. There are repeat situations that acurr and deliberate practice can help to build around this. Unless you're deliberately practicing finding your edge has become useless more effectively then I'm not sure I understand your point.
jamesg46
Posts: 3769
Joined: Sat Jul 30, 2016 1:05 pm

SweetLyrics wrote:
Mon Sep 23, 2019 7:26 pm
I think that Simon thinks that edges are only to be found from searching for obscure nuggets in quantitative data, rather than run of the mill stuff like discretionary range breakout trading or swing trading (and he isn't even prepared to try out discretionary trading using £2 stakes, just on the off chance that he's wrong).
jamesg46 wrote:
Mon Sep 23, 2019 7:22 pm
My understanding so far is, deliberate practice can be used to develop an edge, maintain the effectiveness of an edge or make the edge better through efficiency etc. There are repeat situations that acurr and deliberate practice can help to build around this. Unless you're deliberately practicing finding your edge has become useless more effectively then I'm not sure I understand your point.
I assume that if you have found a quantitative edge then you have the perfect bias to exploit at your discretion also, so seeing how you could improve using deliberate practice against your automation is a pretty decent way of improving your skill set... unless you dont think discretionary trading is ever going to be personally suited.
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ruthlessimon
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jamesg46 wrote:
Mon Sep 23, 2019 7:22 pm
ruthlessimon wrote:
Mon Sep 23, 2019 6:59 pm
arbitrage16 wrote:
Mon Sep 23, 2019 5:53 pm


Mate you've just completely de-railed this thread by focusing on your own issue which is totally unrelated to deliberate practice. The OP put a lot of energy into creating a considered and researched post to get people thinking and talking on a topic that has scant coverage in the trading community, and you use this as an opportunity to express your various fears about the future.
personally I disagree.

The problem with deliberate practise is that edges/rules change over time. But unfortunately, I don't have an answer - hence why I queried Eight - I bl00dy wish edges never change, but unfortunately they do!!
My understanding so far is, deliberate practice can be used to develop an edge, maintain the effectiveness of an edge or make the edge better through efficiency etc. There are repeat situations that acurr and deliberate practice can help to build around this. Unless you're deliberately practicing finding your edge has become useless more effectively then I'm not sure I understand your point.
Don’t get me wrong, I’m a fan of deliberate practice (love data, love systematic trading); thought Eightbo made some great points.
ruthlessimon wrote:
Fri Sep 20, 2019 5:38 pm
I like those points :)
However, there’s an interesting “counter article” from Frans Johansson on the topic:

https://www.fransjohansson.com/press-jl ... -hour-rule

Key bit for me: “It is just less important than has been argued” (in unstable fields)

Hope that clears up my stance, & explains my earlier posts (i.e. examples of when deliberate practice falls short, & Eight’s opinion on dealing with it (i.e. when the rules change - & in trading, they will)). Hence why I thought it was wrong that they were labelled off-topic… - but I would say that ;)
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Kai
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ruthlessimon wrote:
Mon Sep 23, 2019 6:59 pm
personally I disagree.

The problem with deliberate practise is that edges/rules change over time. But unfortunately, I don't have an answer - hence why I queried Eight - I bl00dy wish edges never change, but unfortunately they do!!
Edges may change, especially minor ones, but the markets never do, and that's the most important thing here that you should be focusing on. I think it's fairly obvious from your recent posts that you fear change in general but change can be good too, we are creatures of habit and we don't ever want things to change but unfortunately change is inevitable, otherwise we'd still be riding horses to work every day :mrgreen: Change is everywhere and we can't escape it, even my username Kai literally means change in Japanese language.

If you take a look at the infamous Jesse Livermore and some of his best trading rules and quotes, that was a man who was trading the markets a 100 years ago! Have a look at how many of those still perfectly apply to the sports markets that we're trading today. https://www.marcellagerwerf.com/jesse-livermore-quotes/

I understand your urgent need to find answers asap, but maybe you would get better quality feedback on your own trading approaches from similar types of traders/quants if you were to open a thread specifically dedicated for that purpose where discussing such things wouldn't be considered off-topic. But also please keep in mind that if people realize that you're stubbornly ignoring most of their feedback then they will naturally be reluctant to offer more of it. Since there's not too many deeper discussions on the forum I think it's perfectly understandable that a few people may get annoyed if they see someone hijacking such threads with personal agendas and such.

The now late Stephen Hawking famously said that "intelligence is the ability to adapt to change" and I couldn't agree more. A good trader that understands the markets he is trading should never run out of edges no matter how they change and evolve over time. Minor edges and minor traders may come and go but big edges and big traders are here to stay and they will forever have something to trade on a daily basis, that is an absolute guarantee.

For example have a look at the football in-play markets and the VAR changes to it along with random delay increases, those recent changes are beyond annoying for a higher frequency trader like myself and that may influence my approach to trade more around time decay than trading around goals in the future. Tennis in-play markets are an even better example with many market making traders and noise traders complaining last few years due to lack of liquidity and overall market noise, it is very clear that if they do not adapt and change and learn new skills that they will quite possibly die out.

To go back on topic of deliberate practice, I see this thread more as a continuation of the process that Eightbo started a few threads ago once he realized that he needed to change/tweak his approach to maintain and strengthen his edge over the market. I think that's brilliant and I encourage it, like Steve Burns said, you need to have a process, any process, to ensure actual progress is being made in the right direction. Your process may be more or less efficient but I think it doesn't matter too much in the end as long as it's the right process, no matter how slow a person is moving in the right direction he should eventually get where he wants to.

I think these threads more than anything else highlight the importance of having a process in general, which many people completely lack. Once I became fully aware of the immense depth of the markets I knew no matter what that it was going to take a long time to get where I want to get. One potential shortcut that I really liked came about when I was reading about the concept of Accelerated Learning, I tried to borrow a few elements from it and tailor them into an accelerated learning process that suited my own needs. In short I needed to figure out through trial and error which learning process and practice method produces results and creates progress and which one doesn't. For me the most important thing was to stay flexible with the plan in general, the plan that you write for yourself today may need to be completely rewritten or tweaked tomorrow, based on the feedback/progress/flaws that you've had on this day and so on. Likewise, a trading/practice plan that you first create can easily become completely obsolete a week or 3 later, if you make enough progress and during that time find a better edge or something that requires a different skill to the one you've practiced so far, so it's always good to stay flexible and re-evaluate things when needed.
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ruthlessimon
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Kai wrote:
Tue Sep 24, 2019 3:08 pm
Since there's not too many deeper discussions on the forum
That was my genuine intention - I love driving deep discussion (maybe this was too deep, or I missed the ball - perhaps the latter) :) - my initial posts are heavily influenced by the following article (which believes deliberate practice only accounts for 1%, maybe less in entrepreneurship/trading) - that's what i was trying to get across (with an example (i.e. a strategy I'm working on atm - demonstrating the flaws of delb. practice - which people might not be aware of)):

https://www.fransjohansson.com/press-jl ... -hour-rule

Imo it's good for people to see both sides
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ShaunWhite
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ruthlessimon wrote:
Tue Sep 24, 2019 3:33 pm
my initial posts are heavily influenced by the following article (which believes deliberate practice only accounts for 1%, maybe less in entrepreneurship/trading)
https://www.fransjohansson.com/press-jl ... -hour-rule
That's if you classify the physical action of trading as a profession (like an accountant or an architect), I always saw trading the ladder as much more akin to playing a video game, and that's 26% difference :) The constant arrival of info on the right-hand side of charts is not unlike the price landscape and foes arriving on a horizonal scroller like Defender. After a while you realise the terrain approaching is familiar sections, just presented in a different sequence each time you play.
defender1.jpg
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Vovsen
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I love driving deep discussion
Reminds me of the acronym:

D etail
E stimate
E mergent
P riority

D ependant
I nsure
V alue
E ffort
DEEPDIVE.PNG

Best thread ever. 100% for deliberate practice after realising automation trader+IT developer teams working with SAFe Agile and lean - know thy enemy (and steal his stuff)
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SweetLyrics
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There is a fine line between deep discussion and what trader Ed Seykota calls 'mathturbation'.

Is this 'deep discussion' going to make you any money, or is it a form of procrastination/indulgence/ego stroking?
ruthlessimon wrote:
Tue Sep 24, 2019 3:33 pm
That was my genuine intention - I love driving deep discussion (maybe this was too deep, or I missed the ball - perhaps the latter) :) - my initial posts are heavily influenced by the following article (which believes deliberate practice only accounts for 1%, maybe less in entrepreneurship/trading) - that's what i was trying to get across (with an example (i.e. a strategy I'm working on atm - demonstrating the flaws of delb. practice - which people might not be aware of)):

https://www.fransjohansson.com/press-jl ... -hour-rule

Imo it's good for people to see both sides
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