Must read article in SciAm answers a question often asked on ET: Born or Made?

Quote from Dogballoon:

Eh, the "lizard brain" idea is nothing new. I first read it in a Carl Sagan book when I was 13. The amygdala is the emotional fight-or-flight center of the brain that reacts to stress. That and the surrounding tissue is an evolutionary structure that the neocortex is built around. When people react to stressful situations without proper training, blood going to the neocortex is short cut and routed there. Adrenaline surges, digestion shuts down, and you prepare to act on a moment's notice. Markets are always made up of people untrained in undercutting their fight-or-flight response, so they are prone to boom and bust cycles when extraordinary events disturb the psychological equilibrium of market participants.

I probably summed up those books entirely, right there.

Notice how the second book has "taming" in the title. All it takes is training to stop that, just like a marine or a pro golfer. All of that is secondary to the cognitive skills described in this article, which are different kind of <i>thinking</i> when problem solving.
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Well, that is part of what Terry was saying. But you are only addressing the flight or fight response. Clearly not every trade a trader makes it based on a fight or flight response. Hell, many guys make trades out of complete boredom, the very opposite of fight or flight.

Yes, I think you can tame your chemical reactions in your brain to not have typical pavlovian responses to situations. My point was simply that it's all relative and some guys are better at it then others like anything else. Any human being can improve on their weaknesses to make them better at something. For example, I can continue to practice my golf swing and get better at putting under pressure, but does that mean I will ever be as good as Tiger Woods?

You see while you are getting better at calming your so-called "lizard brain", as Terry put it, whose is to say I'm not doing that as well? Or the marketplace as a whole. In fact, we can watch this sociological process happen right before our eyes.

Case in point the middle east. Usually any news out of the middle east would cause traders to panic and get bearish. However, as a group, we have learn to become immune to such news now and we no longer see such actions as being necessarily bearish. Hence, we all improved upon our emotional responses to an external event but how can you say you improved on it greater then myself.

Look, trading is all relative. You can continue to improve yourself and say you are getting closer and closer to where you want to be as a trader, but what about your competition. What are they doing? Are they getting better, faster, more capitalized?

This falls back onto the basic tenets of Game Theory. Where we continue to make choices based on previous actions and our opponents previous actions but what is our opponent doing? The same thing!!!!!! Hence the "prisoners dilemma".

If you put 10 guys in a room with a million dollars to be had through trading and let them all trade till it's all in the hands of one guy. At some point, it does not matter how much self improvement you make. In fact, all traders could theoretically make improvements to themselves, but does this really matter. In the end, one guy ends up with all the money. As traders, we don't get paid for making self improvements. We get paid for transferring money from other traders to ourselves. So therefore in this equation, we cannot ignore what progress the other trader is making.
 
Quote from Maverick74:

Well, that is part of what Terry was saying. But you are only addressing the flight or fight response. clearly not every trade a trader makes it based on a fight or flight response. Hell, many guys make trades out of complete boredom, the very opposite of fight or flight.

Yes, I think you can tame your chemical reactions in your brain to not have typical pavlovian responses to situations. My point was simply that it's all relative and some guys are better at it then others like anything else. Any human being can improve on their weaknesses to make them better at something. For example, I can continue to practice my golf swing and get better at putting under pressure, but does that mean I will ever be as good as Tiger Woods?

You see while you are getting better at calming your so-called "lizard brain", as Terry put it, whose is to say I'm not doing that as well? Or the marketplace as a whole. In fact, we can watch this sociological process happen right before our eyes.

Case in point the middle east. Usually any news out of the middle east would cause traders to panic and get bearish. However, as a group, we have learn to become immune to such news now and we no longer see such actions as being necessarily bearish. Hence, we all improved upon our emotional responses to an external event but how can you say you improved on it greater then myself.

Look, trading is all relative. You can continue to improve yourself and say you are getting closer and closer to where you want to be as a trader, but what about your competition. What are they doing? Are they getting better, faster, more capitalized?

This falls back onto the basic tenets of Game Theory. Where we continue to make choices based on previous actions and out opponents previous actions but what is our opponent doing? The same thing!!!!!! Hence the "prisoners dilemma".

If you put 10 guys in a room with a million dollars to be had through trading and let them all trade till it's all in the hands of one guy. At some point, it does not matter how much self improvement you make. In fact, all traders could theoretically make improvements to themselves, but does this really matter. In the end, one guy ends up with all the money. As traders, we don't get paid for making self improvements. We get paid for transferring money from other traders to ourselves. So therefore in this equation, we cannot ignore what progress the other trader is making.
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That's a great response. An appropriate reply would require that I kick my hangover first. :D I'll get back later.
 
Quote from nitro:

http://www.sciam.com/article.cfm?chanID=sa006&colID=1&articleID=00010347-101C-14C1-8F9E83414B7F4945

"EFFORTFUL STUDY is the key to achieving success in chess, classical music, soccer and many other fields. New research has indicated that motivation is a more important factor than innate ability."....

Imo the most important part of article is that you need to give yourself 10 years of EFFORTFUL STUDY to truly master anything.

nitro
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I am skeptical about the 10 year period. It is the opinion of a single individual. To quote from the article:

Simon coined a psychological law of his own, the 10-year rule, which states that it takes approximately a decade of heavy labor to master any field.
 
"That is what it boils down to. Can you perform under pressure? No amount of work will give you that. Very few people have that skill, very few. Hence the failure rate in trading."


I don't believe you can make a connection between the failure rate in trading and perfoming under pressure. That is too simplistic a statement in my opinion. There are so many other variables involved.
You can eliminate pressure in trading by creating a set of rules and rigidly sticking to those rules thereby trading with a carefree state of mind.
 
That which has not materialized has not been fully desired.

Born or made? What about desire? How much does that count toward success? I envy people that are so focused on their goals that their minds block out anything else.
 
I think I remember reading on ET that riskarb's dad was a trader and perhaps he picked up a trick or two from his father. I understand that riskarbs brother is also a big time trader as well (please correct me if I'm wrong on either of these assertions).
The moneymakers with young children here (nitro, kiwitrader, riskarb etc) - would you teach your children everything you know about technical analysis, trading and psychology etc. when the kids are young, wait till they grow up a bit or wait for it to come from them (if it ever does so). Or, would you do the opposite and tell you child to stay away from trading and if they took it up regardless, that you would not tell them anything or be very vague? Just curious because from reading all of these articles it would seem that teaching kids in some sort of "home school" settup at the age of 4 or 5 is the way to go (ala Polgar, Williams, Woods etc.).

PS: I used to teach english to 4 year olds in Korea and I have been amazed at some of the sentences that one kid in particular could put together.
 
Quote from NZDSPeCIALISt:

...nitro,... - would you teach your children everything you know about technical analysis, trading and psychology etc. when the kids are young, wait till they grow up a bit or wait for it to come from them (if it ever does so). Or, would you do the opposite and tell you child to stay away from trading and if they took it up regardless, that you would not tell them anything or be very vague? Just curious because from reading all of these articles it would seem that teaching kids in some sort of "home school" settup at the age of 4 or 5 is the way to go (ala Polgar, Williams, Woods etc.).

PS: I used to teach english to 4 year olds in Korea and I have been amazed at some of the sentences that one kid in particular could put together.
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Kids have a natural curiosity with what their parents do. At the school where my daughter goes, they even take that one step further and invite the kids parents to come in and talk about what they do. One guy is a neuro-surgeon. He brought a spongy brain key chain and gave one to each kid. He was a big hit :D

If my daughter showed interest in trading, I would show her trades that I made that went well and badly, how I handled them, etc.

I don't really care what she does, as long as there is no place she would rather be when she gets up in the morning.

nitro
 
Several participants here describe their trading routines and several have huge numbers of posts.

These profiles can be related to the "outside" content that is being brought into the "discussion" portion of the thread.

Daily trading is not a very difficult thing and it doesn't require much brain power either.

All the topics that keep the attention of the posters seem to lead from the initial post of Nitro and his strange orientation to trading.

Trading is like being a carpenter or a plumber ,mostly. It comes down to doing it correctly and following the blue prints for new stuff and fixing only what is wrong when making repairs.

The blue prints come from the markets. What is busted and needs repair comes from the trader.

As witnessed by most postings of people, they can't read blueprints nor can they fix what needs repairing.

there is no such thing as stress in the world of carpentry, plumbing or trading effectively or efficiently.

You simply use the best tools made and effectively and efficiently get the job done.

the emotional feeling associated with this is like riding a bike down a path that you have biked about a 1000 times rain or shine cold or hot.

Get with the program.
 
"The Quest for Genius"

Very interesging segment comming this weekend on CNN. Should be interesting...Here is a link that gives the time and discuss a bit of what is to come:

http://www.chessbase.com/newsdetail.asp?newsid=3361

"...Quest interviews chess player Garry Kasparov, Dr. James Watson of DNA fame, Kim Peek (AKA the Rain Man), and Tony Buzan, the "mind-mapping" expert...."

nitro
 
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