Mental Ceilings and self fulfilling prophesies
- Thread starter Girlpower
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Quote from Scientist:
You are my brother man!
I trade the same way. And I have -exactly- the same problem - changing between scalping and trending mode. Quite often, I find that I focus on S-, T-, 1-min charts, depth and T&S so much, that I completely oversee the big picture. So I will be scalping away in and out, 5-10 times in a row, and then I oversee such an important point as a 50% retracement or even confluence on a larger timeframe. However, I think that the same problem exists no matter what timeframe you do (i.e. you can oversee major daily levels etc doing 5-min charts), but with scalping you certainly risk the least amount of money in case you miss out on an overpowering, larger timeframe signal.
One thing I have found to be useful is to establish times for the different timeframes.
I.e:
Globex. I watch it from 3:00am, when action starts, until the open, often seizing some great opportunities here before the US day starts. Timeframe is 3-5 minute chart only.
Amateur Hour: Ultra-short-term scalping mode during amateur hour (between 9:32 -10:07). This time offers the finest fruit, you can pick off several points just during this time. However, it's an irony that it's called amateur hour, since this is where anybody but the pros seriously get their boxxers pulled over their head. At least in the futures
Post-Morning & News time: From 10:07 I go into 1-min charts primary, as well as 3-min secondary, targeting larger moves (2-4 points) All the way till 12:00.
Lunchtime: Pretty much at 12:00, I'll go into scalping mode again, targeting between 1-7 Ticks on a trade. Anything but scalping seems insane during lunchtime, unless there's a defined trend, or a good retracement on a larger timeframe, in which case I might of course enter. But scalping is just too swell during this time. Very competitive, too. It's actually harder than am hour, but you can lose less, so it balances.
At 2:15-2:45, depending on the day, I will look at the bigger picture again, that is 1&3&5 min charts, even 10&15 (rather than just 144T, 15S or 1min). Interesting reversal time, there are some nice moves to be caught. Most days, entering on the retests, you can make 2-3 points here, till about 3:00.
3:00 - Closing hour. Pretty much my favourite (after opening hour). Most people seem to fear this time. It's actually abound of opportunities. Just don't try to fade the trend here. Closing hour gives me plenty of opportunities to dissect silly brokers throwing their end-of day orders into the market. Another great thing and really my favourite, is the close rallye, generally from between 3:25-3:45 and ending at around 4:03. I tend to want to close out by the bell, that is 3:59:30. The great thing about the close move is that it tends to have smaller retracements, thus your chances of staying in the trade are larger (generally, in the close trade, I'll target 3-8 pts on the ES) But although the target is quite swell, as a stop you often get away with as little as 6-8T, so I like this in terms of R:R.
So yeha, that's one way of dealing with it better. Set different timeframe regimes for different market periods.
All the Best,
~Scientist
About 50 pages ago, I wanted to reply but kinda forgot.
I don't think setting different timeframe regimes for different market period is the answer for me. It's the rigidity I don't like.
Using the driving metaphor: You can't drive and talk at the same time if you're a beginner. As a discretionary trader, you have to add to your arsenal of attention points, the mode the market is in. It takes a fine sense!
This is where improving is all about imo. Go from one plateau to another. first learn to accelerate and brake, than steer simultaneously. add paying attention to the mirrors, etc.
Q
I call the pasive relationship the "cognitive function" and the active relationship the "participating function", and the interaction between the two functions I call "reflexivity".
Reflexivity is, in effect, a two-way feedback mechanism in which reality helps shape the participants' thinking in which thinking and reality may come to approach each other but can never become identical.
Knowledge implies a correspondence between statements and facts, thoughts and reality, which is not possible in this situation.
The key element is the lack of correspondence, the inherent divergence, between the participants' views and the actual state of affairs.
It is this divergence, which I have called the "participant's bias", which provides the clue to understanding the course of events.
That, in very general terms, is the gist of my theory of reflexivity.
--- The Theory of Reflexivity (by George Soros)
UQ
I call the pasive relationship the "cognitive function" and the active relationship the "participating function", and the interaction between the two functions I call "reflexivity".
Reflexivity is, in effect, a two-way feedback mechanism in which reality helps shape the participants' thinking in which thinking and reality may come to approach each other but can never become identical.
Knowledge implies a correspondence between statements and facts, thoughts and reality, which is not possible in this situation.
The key element is the lack of correspondence, the inherent divergence, between the participants' views and the actual state of affairs.
It is this divergence, which I have called the "participant's bias", which provides the clue to understanding the course of events.
That, in very general terms, is the gist of my theory of reflexivity.
--- The Theory of Reflexivity (by George Soros)
UQ
Fantastic post OddTraderQuote from OddTrader:Q
I call the pasive relationship the "cognitive function" and the active relationship the "participating function", and the interaction between the two functions I call "reflexivity".
Reflexivity is, in effect, a two-way feedback mechanism in which reality helps shape the participants' thinking in which thinking and reality may come to approach each other but can never become identical.
Knowledge implies a correspondence between statements and facts, thoughts and reality, which is not possible in this situation.
The key element is the lack of correspondence, the inherent divergence, between the participants' views and the actual state of affairs.
It is this divergence, which I have called the "participant's bias", which provides the clue to understanding the course of events.
That, in very general terms, is the gist of my theory of reflexivity.
--- The Theory of Reflexivity (by George Soros)
UQ
The Reflexivity Theory is one of the potentially most valuable to understand for a trader.
I believe that without constant review of his own level of reflexivity a trader cannot become fully accomplished, that is reach a state of maximum objectivity as opposed to a state of subjectivity, encouraged by the ego that constantly tempts to blind the mind that has willed for objective self-evaluation, with a sense of lack of objectivity or flattering surrealism.
So, to sum this up, while in most professions there is a certain large level of tolerance between perception and reality (i.e. in most professions un-initiated people just believe you no matter what you crap about), whereas in the profession of trading this tolerance does not exist. There is no way you can "bullshit" the market. The market doesn't listen, and doesn't care. You cannot lie. If you don't know, you die.
This is one of the most major reasons why so many people fail at this profession. Reflexivity Divergence kills so many people in the game of finance - Simply because reality can hurt so much, it is easy for your mind to attempt diverting opinion from fact and the harsh reality.
In business, this can indeed be found very often, too. How often have you seen somebody cling on who is obviously hopeless in the course of his business although even you as an outsider can see it's all over? It is this survival instinct - that ego being so strong that it overpowers all reason, until the id wakes up after a few nights in cold rain, with a bottle of Lambrusco in his hand and an old issue of IBD for shelter.
I have found that, today, reading psychology books is one of the best ways of self-examination and improvement of performance as a trader. If you have a look at Friedrich Nietzsche, his theories of the ego and the id, as well as the birth of superhuman and death of god, you realize the depth to which the theory of reflexivity can apply to the irony that is human mind.
It is this irony that makes so many still look for the perfect or better trading system, although most of what they have to really approach is their own mind. Remember: It's the mind that sets the limits - not economy, not ET, not some guy, not the sky.
At which point we would be back to the reason for this whole thread : Mental Ceilings and Self-Fulfilling Prophecies.
Never forget it. Reconsider opinion. There's so much sole opinion on this thread. Opinion is ego. It's all in your mind.
Best Compliments,
~The Scientist
That's absolutely right. I never suggested that, either. It's you "with the market", rather than "against the market". However, I want to ride the flow of the market and then take in advance the positions of other traders by predicting their stops via stop-paths. This is an approach far superior to edge trading. I want have stops where the edge traders are getting into the market. I'm not against the market at all here. I'm in fact "serving" the market....
It's not just about improving your technique. It's particularly about improving your mind, your attitude. Only this will bring permanent change. "Technique" will only last so long as the market does what you think it will. But thinking right is in your mind more than in your indicators or anything.
An inaccurate observation that makes all edge traders profit-"scratchers". It's the other way around:
The market does not continually change. It either continues or it changes!
That's a funny theory. So after trading for... Umm... 5 years, you never improve? OK. Well. And what worked great for one year, totally sucks the next? How can you claim that? Also for scalping? Position trading? What kind of trading do you do? Some sort of set-up trading? Please enlighten me.
It is not really linear at all! Much rather in plateaux, as defined by risk management. "Linear" improvement can only occur if you have a standardized approach, such as setup, crossover etc trading. Any kind of edge stuff.
I appreciate your encouragements, my dear brother Alfonso. I definitely attempt to live by those ideas, it's often harder than anything else, but the power of modelling as you can achieve through NLP, for example, can give the term "self-fulfilling prophecy" a very valid meaning indeed. I am going to start a comprehensive NLP Practitioner Course with INLPTA in Sep... See how much it can bring. It's all in your mind
Best Compliments,
~The Scientist
yeaa na warries moit...Quote from OddTrader:Thanks Scientist.
Soros' Reflexivity example is really excellent...
Life in Australia can be quite crazy sometimes, even in the "finer" places. Today, I worked in my Jewellery Design business to see how things are (hadn't been there for weeks now), and some of the people that walk in there all day just make you go woopee. This can really make you think about "Reflexivity". As in: Are these people crazy or is it just me?
Anybody say ET is crazy - LOL! The world "out there" is pretty crazy, too.
So I asked my dad what's the juicy news lately. Well, as it turned out the local "Queen of Mordor" (Evil & Rich) went broke and sold her gallery. Amazing.
The worst local maniac bought it. Even more amazing.
Then a harmless local hermit called Rinzo (a friend of ours, too) got his licence suspended for drink driving. Rinzo pledged for mercy "I have no home, I live in my car. It's all I've got. Please don't take my licence!" But he was unheard.
Next night, he went to our local police station, set all the cars and then the building on fire (covered the cars with leaves and then poured petrol over them), just to have the cops run out and take him custody. Parts of the Police Station were saved by the local Volunteer Fire Brigade, arriving a little bit too late.
He pleaded "not guilty" with persistence. "I had no choice", so Rinzo. We always thought Rinzo was a great, wise, normal and settled sort of guy. Well I suspect now he won't have to worry about shelter for a while.
Pretty scary considering I'm living in a "small country town". Things just happen all the time here...
Moral of the (true) story: I think the answer to this thread's flaming-war is that Natalie really has literally poured petrol all over the issue of "standard" trading performance and mental ceilings. Now we have a lot of ET's running around with lit matches... What would you expect?
Compliments,
~The Scientist
Magna
Administrator
From the Associated Press:
Shaun Micheel didn't set too high of a goal for himself in the PGA Championship.... The 34-year-old player who hadn't done much to distinguish himself in eight seasons on the PGA Tour became the latest first-time winner of a major championship on Sunday.
"I showed up here on Tuesday to play a practice round and saw how difficult this course was and I was just trying to make the cut. I know that sounds pretty simple, but really, that was my main goal, and I probably would have been happy with that."
"I was trying to win the B.C. Open a year ago this time," said Micheel, who won $1.08 million with his first win in his 164th tour start. "A month or two ago, I was trying to keep my card."
LOL. A mental ceiling? "Just trying to make the cut...."
Shaun Micheel didn't set too high of a goal for himself in the PGA Championship.... The 34-year-old player who hadn't done much to distinguish himself in eight seasons on the PGA Tour became the latest first-time winner of a major championship on Sunday.
"I showed up here on Tuesday to play a practice round and saw how difficult this course was and I was just trying to make the cut. I know that sounds pretty simple, but really, that was my main goal, and I probably would have been happy with that."
"I was trying to win the B.C. Open a year ago this time," said Micheel, who won $1.08 million with his first win in his 164th tour start. "A month or two ago, I was trying to keep my card."
LOL. A mental ceiling? "Just trying to make the cut...."