How George Soros knows what he knows

[just21]

There is no inside information in currency markets. He had access to Bundesbank officials at a conference who indicated the pound was overvalued in the ERM. What was the risk if the pound had not been forced out of the exchange rate mechanism? Very little, it would have stayed in the erm bands and he would have to pay 12 or 15% interest on his short pounds per annum. That is why it was such a good trade, the reward/risk was exceptional, and why he put on 10 billion pounds worth.
This is why the whole Britain joining the euro debate is so facile. Sterling is too expensive and the government are not heading the lessons of history. Britain in the euro would be one of the boom areas as interest rates would be too low and the housing market would probably go up 50%-100% from present historically high levels. The only argument in it's favour is that it would make it slightly easier for multi-national corporations to do business, hardly a reason to give up 1000 years of British sovereignty for. Why do European governments want Britain in the Euro? That is really puzzling me as it will cause a lot of problems for them or maybe they want the British to bail out the Europeans pension crisis.

 

[bundlemaker]

Just read the article. It's interesting, but nothing new. NLP and DHE (design human engineering) offer a systematic way to codify inner experience to make what was once considered subjective into something objective.

The article talks about the differences between the feelings you encounter with a good decision versus a bad decision. NLP/DHE goes way beyond that and actually provides a way to consciously repeat the process of the "good decision" in an automatic way.

It's called submodality (submodalities are the internal representations of experience. Most NLP books describe it) modification. In very basic terms what you do is compare the submodalities of the good decision and the submodalities of the bad decision, and see where the differences are. Usually a shift in submodalities can create awesome and instant change. This works with any thought process, not just decisions. It's a great tool for changing beliefs. It affords a way to actually reengineer all the programming placed in your brain that is not serving you.

I'm just scratching the surface here, but if anyone is interested in how to take control of the functioning of their brains, there simply is no better tool available. They are also easy to use, and if your willing to read, virtually free.

 

[Magickian]

Chessman wrote:
I try to be a systematic trader who feels if I leave the door open to gut feel, its nothing but trouble. Not sure how to incorporate her ideas??


Give it a try, but do so slowly and methodically using a journal - that way if it adds to your edge or not at least you’ll know why. In this business of managing risk more filters can only help as long as their efficacy has been proven.

 

[FishSauce]

It's funny how NO ONE remember that George Soros recently (a couple of years back) lost $2 BILLION ( that's right Billion ). Follow up with a $600 million loss.


ANd yet he's the highest paying hedge fund manager during those aforementioned period. (AUM)


Go figure.

And to further stroke the fire:

In LHabitant's <u>Hedge funds Myths and Limits</u>, I recalled the author mentioning how one of the managers ADMITTED that Quantum Fund used technical analysis.....
This is peculiar because Soros is vehemently against TA.


<B>Moral: Regression to the mean (possibly ZERO) </b>
Only insider information can explain abnormal risk-adjusted returns ...

 

[chessman]

Quote from marketsurfer:

chessman,

i am familiar with flavia's work on intuition and uncertainty. she is a very talented researcher and is attempting to quantify intuitive qualities of trading / traders. her work is absolutely fascinating and her ability to make it understandable is commendable. she is part of a group that i am a member of, where did you meet her ??

all the best,

surf

Surfer,

I met Flavia through a mutual acquaintance. As you said she is very bright and good to see her quantify these elusive qualities. I read her article about Soros, how he uses his backache and other physical symptoms almost as we use technical indicators. To be able to listen to your bodily signals to access the knowledge they contain is very foreign to most of us.

I have read your surf report with great interest. I think you do a great job of blending the mechanical with the intuitive part, its a good skill to have.

Best of luck trading

 

[corvus]

Quote from chessman:


I read her article about Soros, how he uses his backache and other physical symptoms almost as we use technical indicators. To be able to listen to your bodily signals to access the knowledge they contain is very foreign to most of us.

During the brief period I was in Linda Raschke's chatroom, Flavia gave a seminar with Linda. The focus was on subtle sensory clues...tastes, smells, colors, and such to describe market conditions. I wish I had a transcription of that chat, she was very interesting.

 

[marketsurfer]

Quote from chessman:



Surfer,

I met Flavia through a mutual acquaintance. As you said she is very bright and good to see her quantify these elusive qualities. I read her article about Soros, how he uses his backache and other physical symptoms almost as we use technical indicators. To be able to listen to your bodily signals to access the knowledge they contain is very foreign to most of us.

I have read your surf report with great interest. I think you do a great job of blending the mechanical with the intuitive part, its a good skill to have.

Best of luck trading

thanks, chessman. you nailed my system completely !

best,

surfer

 

[chessman]

Quote from bundlemaker:

Just read the article. It's interesting, but nothing new. NLP and DHE (design human engineering) offer a systematic way to codify inner experience to make what was once considered subjective into something objective.

The article talks about the differences between the feelings you encounter with a good decision versus a bad decision. NLP/DHE goes way beyond that and actually provides a way to consciously repeat the process of the "good decision" in an automatic way.

It's called subnormality (submodalities are the internal representations of experience. Most NLP books describe it) modification. In very basic terms what you do is compare the submodalities of the good decision and the submodalities of the bad decision, and see where the differences are. Usually a shift in submodalities can create awesome and instant change. This works with any thought process, not just decisions. It's a great tool for changing beliefs. It affords a way to actually reengineer all the programming placed in your brain that is not serving you.

I'm just scratching the surface here, but if anyone is interested in how to take control of the functioning of their brains, there simply is no better tool available. They are also easy to use, and if your willing to read, virtually free.

Bundlemaker,

I have rudimentary understanding of NLP and am not familiar with DHE. From what I understand, NLP uses shifts in submodalites to bring about change and also gives you a way to automatically repeat a positive experience. For example if I don't like cutting losses, I would change the submodalites and make that experience brighter, closer etc and use a automatic trigger that would fire next time I dread cutting my losses? So that is behaviour modification.

What does NLP/DHE say about ways to improve a decision making process? For example if I am long 10 SP, what tool would I use to guage if this is a troublesome position?

My sense is that Flavia's work is going in a slightly different direction, I believe what she is saying is that due to the complexity of the mkts, things don't repeat in the same exact way, so what she offers is a way to systematically develop reliable hunches in face of uncertainty.

So in case of being long 10 SP, I would turn within, and using the systematic steps I would get the 'felt sense' how I feel about my position, so this offers me steps to psychologically monitor my position.


.....I don't know, maybe I am just talking out of my ass

 

[Roger777]

Does any one here know if it possible to link the Hammer trading platform to a charting software.Thank you

 

[chessman]

Many thanks to all the posters, many good ideas. I wish I had the time to respond to each one.

I must say I have had no luck mixing systematic trading with intuition. There are periods when I think that I can out perform my system, things work well for a while, but then I miss out on a trade, and the painful self-correcting process starts.

Unfortunately for me, even after all these years of trading, I wouldn't know a good trade even if it came and bit my rear end ! I seem to get stuck in a preconceived notion and find it hard to entertain other ideas.

I think I am in Richard Dennis and Ed Seykota's camp when I say that I have always held the belief that the goal should be to just follow your system. If you read Dennis's interview in mkt wiz, he admits that it made good press of him selling sugar near the high based on intuition, but he said what they didn't report how much money he lost trying to buy sugar at the lows. He said the net result, it cost him money.

However I do think Flavia work is quite different. It needs careful study. In market surfers hands its pure gold, in mine its a good bet to the poor house.

For those of you interested in exploring her work, please explore the subject of Focusing.

http://www.focusingresources.com/awc.html