Market moves - right or wrong?

The sport of kings.
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Euler
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I haven't finished the book yet, so I'll reserve full judgement. But the thing I've liked so far is the way it was broken down to allow readers to understand a complex psychological discussion into a simple to understand structure. So I think people may stand a chance of changing their habits.

The way I read it at the moment is Zenyatta is all chimp and Ferru has a lack of chimp. No offence intended in either direction, just an observation.

When I first came across trading in financial markets I couldn't see how people could profit from it as it seemed completely random. But now I have a deep understanding of the trading process and exactly what you are trying to do so it's second nature now. I simply play with the variables.

But prior to that I was very sceptical on whether anybody could make money and whether that was just down to luck. But I know now it isn't.

But even if you solve that particular puzzle you are left with this curious situation that even if you teach people something very precise they can't do it. So that is surely psychological and is something I've been exploring for a couple of years.

If I can find a structure that allows people to overcome that, then I'll feel that's another box ticked.
burdo77
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I think this would be beneficial to understand the principle of why we make bad decisions...

http://en.m.wikipedia.org/wiki/Cognitive_dissonance
Iron
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Euler wrote: The way I read it at the moment is Zenyatta is all chimp and Ferru has a lack of chimp. No offence intended in either direction, just an observation.
In what way would you say that I lack a chimp?

I would say that I have a very active chimp, which has caused me all sorts of headaches in life, from over-eating to over-complicating things to paralysis by analysis to sending emails in anger that I later regret! :lol:

Jeff
Iron
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A great example from a market wizard about how you create opportunity without having the power of prediction.
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Euler
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Ferru123 wrote:In what way would you say that I lack a chimp?
Perhaps, I guess this is where the book becomes subjective. I wondered if your constant quest for the perfect trade or strategy was your mind suppressing the chimp or perhaps it could be that the chimp is suppressing your actions? I guess you could take it both ways.
Zenyatta
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"I shoulda learned to play the guitar
I shoulda learned to play them drums
Look at that mama, she got it stickin' in the camera
Man we could have some fun
And he's up there, what's that? Hawaiian noises?
Bangin' on the bongoes like a chimpanzee
That ain't workin' that's the way you do it
Get your money for nothin' get your chicks for free"

-Dire Straits, 'Money For Nothing'
Iron
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Could be caused by a couple of things:

- A worry that, by pursuing Strategy A, I might be missing out on a more effective Strategy B.

- Concern about whether a method really has a long-term edge (as I'm gambling if it doesn't)

- My inner perfectionist

- A combination of the above.

Whichever the cause, the chimp was a factor (although I can't blame my chimp for my mistakes - I choose to listen to him rather than ignoring him!). :)

Still, I think I'm making progress in beating the chimp. I recently started a diet, and in my last weigh in lost 12 lbs in about 2 weeks - more than I've lost in a long time of dieting. If I can stick at the diet till Christmas, I'll probably do a blog post, with before and after pics. I've recently started what can be a very stressful job if you let it get under your skin, so as a coping mechanism I've needed to use strategies to keep positive instead of letting my chimp's negativity drive me to distraction.

Jeff
Euler wrote:I wondered if your constant quest for the perfect trade or strategy was your mind suppressing the chimp or perhaps it could be that the chimp is suppressing your actions? I guess you could take it both ways.
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CaerMyrddin
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- A worry that, by pursuing Strategy A, I might be missing out on a more effective Strategy B.
Think this must be present in many languages, but never heard from a English speaking person. 'The best is the enemy of the good'. Your third point is also related to this...
- Concern about whether a method really has a long-term edge (as I'm gambling if it doesn't)
If you aren't sure don't deploy then. Straight simple. Please don't take this the wrong way Jeff, but do think you miss the inner chimp in the way you should be more aggressive and not so thoughtful. You over think things, imho.

Let me put things in another way. Let's suppose you were in a fight, doesn't matter why. In less than the blink of the eye you have to make a decision, like fleeing, punching, kicking, whatever. You can't procrastinate a decision thinking, oh, but if I punch him the mouth will I get blood in my own hand, should I punch in the stomach instead? But can that get him in serious health trouble? If I flee will I be in double trouble, because I don't know if I have an edge out running him? You won't know if you don't do it!

This is a bit like a caricature, but I hope you get the point. I know you will disagree with me on this and will have many powerful things to say, but I strongly believe that in most situations in life in general you are better with a bad decision that without one at all.

With the utmost respect,

C
Iron
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CaerMyrddin wrote: Straight simple. Please don't take this the wrong way Jeff, but do think you miss the inner chimp in the way you should be more aggressive and not so thoughtful. You over think things, imho.
I sometimes do, but there is equally a danger in under-thinking (something I am also guilty of at times!).

However, the chimp is unlikely to put you in the right place psychologically. If you're angry, you're generally ineffective. Being aggressive in the sense of being focused and in the zone is something else, but that has nothing to do with the chimp. :)

The chimp is the angry guy who lashes out; in football, you might see it when a striker scuffs his shot or does a careless tackle, rather than quickly and carefully weighing up the situation and choosing a better response.

Thanks for your feedback. :)

Jeff
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Euler
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While driving today I found the section in the book I felt was you Jeff. It refers to the chimp being more dominant than the human and says you can recognise this if you keep asking 'what if'. That's the chimp dominating your thinking.
Iron
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'What if?' can be a good question. If people didn't ask 'what if?', we'd still be living in caves (although I realise that there comes a point when further questioning becomes pointless). :)

Jeff
Euler wrote:While driving today I found the section in the book I felt was you Jeff. It refers to the chimp being more dominant than the human and says you can recognise this if you keep asking 'what if'. That's the chimp dominating your thinking.
Zenyatta
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Good to see stern warnings by Peter Webb on his blog about the dangers of trend following. I hope newbies heed the warnings.

http://www.betangel.com/blog_wp/2014/10 ... n-trading/

"One of the most common mistakes I see in newbies is trend following."
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Euler
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Ferru123 wrote:'What if?' can be a good question. If people didn't ask 'what if?', we'd still be living in caves (although I realise that there comes a point when further questioning becomes pointless). :)

Jeff
Euler wrote:While driving today I found the section in the book I felt was you Jeff. It refers to the chimp being more dominant than the human and says you can recognise this if you keep asking 'what if'. That's the chimp dominating your thinking.
I had to learn to take risks. When I was young I was very risk averse and didn't do anything, just in case. That's what the what if was referring to in the book.

I think you could have two what ifs:-

what if?

what if!

Two entirely different things.
Iron
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Zenyatta wrote:Good to see stern warnings by Peter Webb on his blog about the dangers of trend following. I hope newbies heed the warnings.
Some of the markets that Peter does really well in, based on the charts he posts on FB, exhibit strong moves in just one direction.

There is no doubt, therefore, that Peter follows trends, and he himself has acknowledged recently that he'll follow a trend if the move is strong.

Jeff
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Euler
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The only reason I an persistent on these points is I have had to suffer the ignominy of failure and the wrong mindset, only to over come both. I've been a fool, idiot, too negative, hesitant, lacking direction, passive, fearful, name all the bad traits and I've encountered them all.

So its one of those situation where I feel that if I can do it, anybody can.

I didn't come from a privileged background, had many bad things thrown at me but I managed to overcome them all. I'm writing this gently merry on some fine beer from California on Friday evening. It's such a transformation in fortunes from where I started it seems almost impossible. So I'm never going to stop people who are actively striving to achieve something, no matter how remote it may seem. I've been through the journey myself and it is possible no matter your starting point. So I can't do the injustice of not encouraging people to find their true potential.

Always use the word impossible with the greatest of caution.
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