Intuitive Trading

Quote from WDGann:

Nothing is intuitive. It's sub-conscious recall of pattern recognition.
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Excellent!!! So well-put, WDGann!

This sums up in one sentence most of what I said about intuition in the various threads!!! :eek:

This is what I believe. There's no such thing as "intuition". It is all just a process of pattern recognition that has become so familiar that is is perceived as "intuitive". Just like we thing driving a car or walking is "intuitive". Let's think back about the time we learned either - It was anything but intuitive... Today we don't even "think about it". That's what intuition is all about. Automating common processes of your brain in order to free up RAM and save processing power...

Come on let's face it : There is no such thing as "intuition" to be found in a beginner, right? If so, then how come the experienced trader can make "intuitive" decisions while the newbie clearly can't? Same for a driver, craftsman, musician?

It's nothing but little programs going on in the back of the mind. They aren't very loud to announce themselves. They just run on an automatic script and make us believe it's "notion". Yet it's just another program going on calculating indeed very complex structures of pattern-recogntion and exercising appropriate reaction. In the terms of neuroscientists, pattern-recognition is the same thing as "experience", or the two words are interchangeable. What does that tell us?

We are but slaves to our own "instinctive" model of survival. Instinctive, because as long as we don't have a clear understanding about what our brain / mind is doing, we will be stepping in the dark about it and wondering what is intuition, proficience, what is reality and what is hokuspokus. We won't know what's really wrong until we know what's really "right".

Until then, let's just assume that "intuition" does not exist, but instead is a manifestation of automated proficiency due to pattern-recognition / experience?

We could start talking about god, but this certainly is a more convenient way of dealing with the question... :D

~Scientist
 
Quote from Scientist:


I think that we should realize the potential capability of the human brain. The total figure of binary processing power units is about 150,000,000,000^10,000. This number of the complexity of the human brain is a number higher than the total number of particles of matter in the known universe.

Just try to visualize the number of atoms in the sun, the galaxy and then in the whole universe.

This is the figure neuroscientists such as Rama Chandran simply name as the potential of processing power, which cannot and will not ever be outperformed by any computer built. It is derived from the approximate number of neurons in the brain to the power of 10,000, since the average neuron has connections to about 10,000 other neurons.

Unfortunately, most people are not able to access this "hard drive", but only ever their small RAM, namely consciousness. Unless they're processing their subconsious in an alpha-state (dreaming), which is an exception - But a difficult state to perform in.

There are some exceptions. Autistic children for example. There is a kid who knows by name, page, address and number every single entry in all of the entire phone directory of Beijing, that is about half a dozen major fat directory books, with several million entries. He can quote any of the entries by being given only one of the variables, i.e. location on which page, just phone number, or just address / name. Other similar marvels have been performed by autistic children, who are known to have a dysfunctional "RAM" while having a constant, 'streaming' access to their "HD". I wrote about his before, but it's always a thing to consider.

How, under these circumstances or cerebral possibility, can we assume that a technical system can outperform the power of the human brain, as in trained proficiency, or "intuition"?

I should mention here that myself, although I used systems for a long time, am not a systematic trader anymore. And I feel like a great restriction has been taken off me. Automation is good, but it isn't as powerful and adaptive as the brain can be. I.e. it can hardly trade superiorly during both trends and ranges. Only the human brain has this power of "on-the-go" evaluation and action.


Hmm. Yes, I think "Intuition" partly belongs into the world of esoterics, or let's say there's a better explanation for learned proficiency than "Intuition". I have written something about that in another thread:

http://www.elitetrader.com/vb/showthread.php?s=&postid=319402&highlight=intuition#post319402[/color]

I disagree. This is one of the most interesting points of diversion between traders. What's your reasoning to move this out of the trading forum?

Scientist
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Your post and the one of Harry trader speaking of aging (around 16yo) show an interesting set of considerations.

I my experience it is like going through a tunnel and when you emerge you can "intuit".

The tunnel for me was a process that happened in the dark, until I finally assembled all the components of trading. The before 16 onesw and the after 16 ones. Harry trader went through what every one does. That is a two step process: taking information in and regurgitating it. In America it is called "getting by on your good looks". At some point, people grow up and are able to do what yopu chat about. Make sense of data that is impacting on you. The "making sense" is more than just intellectual.

In trading "making sense" just goes from analysis to decisions based upon beliefs. Technical to psychological.

at some point people learn that a signal (indicator collateral processed info) pings into your consciousness and, instead of anything else, a person gathers all the facts present and then does an analysis. This ends the hyper part of trading. the Pavlov kind of behavior.

Once analysis is done on a foundation that is a complete set of data, the beliefs one has allow for more rational decisions if the belief set is as mature and unfettered as the analysis objectiviety.

Well that how I got out of the tunnel. what I "feel like" trading is like being in an intuitive place. "Intuitive" for me is having my analysis and beliefs in total concert. I can "act" (behave) in a so called "intuitive" way.

sitting there watching, I get the initial "signal" and I automatically skim to fill up the table for analysis. "feelings" from my beliefs simply lead to "deciding" and "acting". It seems instantaneous or to say it another way: "the market slows down and I connect to it intuitively." But is is a four part process that comes from both intellectual processes (gathering and analizing) and psychological processes (beliefs and behavior).
 
Quote from nononsense:

Harrytrader,

As consolation listen to the wise words of Confucius:

"Learning without thinking is labor lost;
Thinking without learning is perilous."

nononsense
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WARNING: TROLL IDENTIFIED!
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Name : nononsense

Type: Forum Troll

Attack Modes: Confusion, pseudo-smart posts & BS, false pretense, flamebaiting and aggressive trolling / insulting, false statements.

Main Attack modes: Pseudo-smarting or insulting, troll-baiting / return-trolling. Expects you to reply. Allies with other trolls.

Class: B (Dangerous, destroys entire threads via flame-clogging)

Identification and Antidote: Pseudo-smarting trolls can be come by via identifying posts as bogus / identifying simple flames and particularly reading post history. Also by monitoring post count - Tends to vary widely (moderator deletion).

Only replies should be troll identification posts.

Handle with care. Do not reply to his posts. Do not feed the troll!

============================================
Regarding this post:

Confusing indeed this is:

"nononsense" himself, ET's head flamer, who recently ridiculed "my flaws" and my "puerile logic" as I quoted a quote by Confucius, on top of that one of his largest!:

"Knowledge is knowing what you don't know."

Read yourself this and other recent nononsense troll posts:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=21548&perpage=6&pagenumber=5

http://www.elitetrader.com/vb/showthread.php?s=&threadid=21548&perpage=6&pagenumber=4

And here he is, back - quoting Confucius! Are we getting literate now, are we? LOL!

nononsense is funnier than FPC, but he is also more dangerous, since his BS isn't always transparent and can confuse newbies. He lacks discpline, ditto doesn't trade.

Help us make ET a cleaner place! Know, identify and don't feed the Trolls!

- The initiative for a troll-free ET forum.


Troll definitions and how to identify various species: http://info.astrian.net/jargon/terms/t/troll.html
 
Intuition can well induce in error as for game and probability. For example in a book untitled "Martingales and Stock Market" (french book sorry) the author, who is a financial consultant for banks and mathematical professor in Engineering school tells this story : for making his students from Ponts & Chaussées (one of the most prestigious engineering school in France) learn about risk and probability he decided to let them play in a virtual casino using software simulation and giving them a serie of martingales. He said that it was a pedagogical catatastrophy : when the number of students was above 50, there was often one student that won most of the time so that the others thought he was somehow exceptionally gifted :D. That's why even highly math educated people can have false intuition about probability: they can make complex probability calculation but they don't really feel and understand it. I have met many engineers in that case when I was engineer in statistical control: many engineers not in the field has misleading conception about statistic applied to real world. It is mostly due to school education in engineering school which only teaches sophisticated calculation methods and not epistemology of science (that is to say : when do I have the right to use such or such method and how to check that). When these engineers only deal with technical stuffs it's not a problem because they only use well known physical laws but when these engineers who belong to the so called elites have managerial responsabilities in industries and governments they tend to believe that social laws are like physical laws and probability calculus can be used without special cautions whereas it is very doubtfull in many cases since the laws are unknown or even don't exist.
 
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