Quote from bearmountain:
Thank you for your post. I think I understand about 50% of it!
Regarding George Soros, Flavia Cymbalista as a phd candidate studied Soros and subsequently met with him.
I am trying to resolve the conflict created by discipline of following ones rules and gut feel. There is some evidence that successful discretionary traders are able to do this.
So, I need help in resolving this conflict: how to blend 100% mechanical strategy with gut feel in real time trading.
I believe after years of experience, gladwell says 10,000 hours, one develops some "X" faculty of the mind. However for me and most other discretionary traders, our limbic system short circuits it.
Zen mystics call this X faculty 'it' (zen in the art of archery)
from Flavia:
Traders have always been told to stick to their trading
methods. Success, theyâre told, requires discipline,
which means overriding your gut. No wonder â gut
feelings are notoriously unreliable. Few traders know
how to separate them from emotion and turn them into
reliable knowledge. The advantages of an accurate gut are indisputable.
I'm glad you pinpointed your view of "conflict". rules vs. gut.
Most potential traders have feelings. Most common are: anxiety, fear and anger.
Anyone can examine their feelings when "in" the market or "out" of the market. Most people have two sets of feelings. Mostly they use entry/exit strategies.
Over the eons, mankind has developed ways that provide for a rational existence. This may be described as support, comfort and confidence type feelings. Humans usually are in a state that is way beyond survival.
Flavia indicates that there is a progression in knowledge, skills and experience.
It is clear to me that this is true. The goal, from my point of view is to have a complete theory,to have complete knowledge of how markets work, and, finally, to have my mind and its instincts operate in synchronicity.
Notice that I don't use rules but instead I have a complete set of inferences.
Trading with capital in the markets is the name of the game. You may notice that the big players have all their capital in the markets all the time.
Flavia points out how trading in a state of no conflict is superior.
You point out the 10,000 hour myth.
In a relaxed way consider the following.
What you see as you monitor is a visual sensing. Somehow, in your mind, you think you have rules for trading.
Draw a pictogram of these things. Put seeing on the left and rules in the right half near the middle dividing line.
On the right add the words: "take profit segment".
For me there is a vertical slot in the picture that runs from top to bottom of the pictogram and it is labelled inferences. I have an inference for everything that I could be sensing visually or by sound (in olden times, telephones also had the floor noise in the background).
Sensing combines with inference to yield an output called perception. Sensing is 10% and inference is 90%.
Suppose you fill in all the missing pieces of the pictogram so you have a diagram that shows how you take profit segments.
The inference slot is filled with pieces and they are all organized by the work the mind does to organize them.
Theory contributed pieces; knowledge of the market's operations contributes pieces; instinct contributes pieces. There are many pieces contributed from non trading sources, as well.
In terms of driving a car, you use sensing and you have a fully filled in slot from top to bottom for inference. You combine sensing and driving inferences to alway "know that you know. Always knowing that you know is called perception. I driving you have knowedge and skilols and experience. these three things are what fills up your "inference" slot for driving. Hving it complete makes driving happen at the level of unconscious competence.
Soros is an expert. Flavia is not an expert at anything and especiallly not trading.
This thread is a discussion of what it is like for a person to not have much inference available when trading is done. They do have eons of instincts availalbe, however.
Incomplete trading inference and trading instincts are in conflict for you and you pinpoint this. your trading instincts did not originate with you through learning about trading. They came form eons of human survival.
by bringiong into play the 10,000 hour myth where do you wind up? You wind up letting your inference develop around situations frought with fear, anxiety and anger.
Part way through this 10,000 hours, discretionary behavior and thinking comes into the picture. It is a pothole filling process that is an experiential learning process at the rate of real time passing during RTH.
Anyone can go through a 6 1/2 hour day or trading in 40 minutes if they are using a video of a day and can fast forward during parts of the day. Hastening an ill chosen method of gaining experience will not be helpful.
Soros has a correct theory, a correct knowledge of markets and he has excellent instincts.
So WHAT happens with Soros?
He senses. His inference is total and complete. Unconsciously his sensing and inference combine to yield PERCEPTION.
Soros now has his monitoring complete and he knows that he knows. This is his input for analysis.
Soros does analysis with respect to his positions. He DECIDES, then, that something is amiss.
He is doing conflict resolution at the correct place in trading. His positions are amiss with respect to what the market has done and the theory he uses and thei nstincts he has which are in concert (See Flavia) with theory and market operation.
He corrects his positions to align them with what is correct for that moment. In the simplest aspect, a market positiion is one determined by the category of all the above. What is that category called?
What are instincts based upon that took eons to create? What is theory based upon that is the common public knowledge? What is the common market knowledge based upon?
Everything that survives in the world and everything that is created out of the pieces is what and how your mind operates.
People who come to markets to make money, commonly fail. They try to learn to make money and if they are not skilled nor knowledgeable and have undifferentiated inference, they use survival instincts and they survive by their minds and bodies getting them far away from the markets.
Traders who "freeze" are exmples of traders who bodies and minds are taking them away from the markets.
Before 1960, I started explaining to others how I gained my wealth. They observed that I was FREE. They saw I could choose anything I wanted or needed.
I didn't do the 10,000 hour myth.
There is but one totally integrative thing that gives the potential trader prowess and the ability to extract the market's offer.
Allow your mind to consider the pieces. Your mind will put the pieces together. That is one of the jobs of the mind. It happens mostly when you are sleeping. For me, I read 7 pages of a book where the relationship of the market variables was stated in terms of science. I was literally surrounded by this thing as well.
Logic.
Everything about the market variables is processed through logic.
When you partner with the markets to extract capital in segments, you have to use the inference created by the theory, the market operation and your human instincts; it is simply a noise and anomaly free system containing a structure, processes and "a taking" of the market's offer.
