should most analysis be discarded as it is "too much information"
- Thread starter sosueme
- Start date
Yes, this is another "lesson" that was taught to me by my employer a few year back. During my second interview, I was told frankly a good percentage of traders never make it past the 2 year. The reason being that they cannot find a way to deal with the basic personality issues that prevent them from being profitable.
Although it may not make sense (that is I expect it not to make sense to the majority) one reason for failure is the human tendency to "regret" the loss of opportunity. Apparently in the majority of folks, this regret is stronger than our fear of failure and colours the way we look at trade opportunities. Specifically if one has a losing trade and sees the market move away from them, apparently it is difficult for them to resist the urge to "revenge trade". Instead of simply standing aside and analyzing what they did wrong, they may enter a series of additional losing positions, ending in what we would characterize as a "blowout".
The main message was that learning to do this work requires a change of attitude, towards the market, towards oneself. Part of the interview process in my office at least, puts the interviewee in the position of feeling as though they have "blown it"....and will not get the job. What they do then is to watch carefully how the candidate processes this information and what they "do with it"...The winners (those that get a call back) seem to be able to take a step back and look squarely at what they did wrong, with a minimum of emotional baggage. Successful candidates are those who apologize and suggest that they could do better given a second chance, and THAT willingness to adapt is what separates them from the rest of the crowd.
Hope this helps.
Although it may not make sense (that is I expect it not to make sense to the majority) one reason for failure is the human tendency to "regret" the loss of opportunity. Apparently in the majority of folks, this regret is stronger than our fear of failure and colours the way we look at trade opportunities. Specifically if one has a losing trade and sees the market move away from them, apparently it is difficult for them to resist the urge to "revenge trade". Instead of simply standing aside and analyzing what they did wrong, they may enter a series of additional losing positions, ending in what we would characterize as a "blowout".
The main message was that learning to do this work requires a change of attitude, towards the market, towards oneself. Part of the interview process in my office at least, puts the interviewee in the position of feeling as though they have "blown it"....and will not get the job. What they do then is to watch carefully how the candidate processes this information and what they "do with it"...The winners (those that get a call back) seem to be able to take a step back and look squarely at what they did wrong, with a minimum of emotional baggage. Successful candidates are those who apologize and suggest that they could do better given a second chance, and THAT willingness to adapt is what separates them from the rest of the crowd.
Hope this helps.
Now you are really on a roll and getting to the heart of the matter.
However people will still cling to their dogmatic and overly analytical ways because the pain of looking into themselves is too great to bear.
These are the very same people with whom we share our day to day lives.
sosueme
Here's another pretty chart. Of course it's cherry picked bottom... what else could it be.
Anyway, trading is simple. Buy at one price and sell at another or v.v. and keep as much distance as possible between the two.
Now what's hard about that?
Oh I forgot it was dog and got it mixed up with the hog that I was quoting. Sorry Hog.
How did you get this post through? Are you still having problems? If you had a previous alias, I think they prevent it. If first time, I think you should have received an email to verify yourself.
Good thread.
I'll add a few things. Cherry picking is a major issue with money management because you're trying to take a non-biased probability (like flippin' coins) and "optimizing" or "curve-fitting" your trade management rules intentionally... (as Trader Zones has mentioned....)
But if you know the market conditions in which you are "cherry picking" you can control/reduce the risks of running a "curve-fitted" set of rules because markets are not "a coin toss". As long as you have a clear-cut understanding and knowledge about what you are dealing with there are ways to manage them.
A lot of people recommends newbies to pick a few markets and get competent with the specific tendency of the particular product you're trying to "master". You takes these tendencies and identify differences between by comparing them with other markets, this leads to a better understanding of how to trade more markets. Of course, you take the cumulative knowledge and test them out to see if there are any significances with relative to a "normal" condition.
Another example would be... let's say that for a particular market... The S/R holds strong when the relative volume of day is lower than the previous day. I can run a test for both setup conditions with/without the selection bias and come up with a risk management scheme for utilizing the study. (I've over-simplified the example... I know... but hopefully you get the point...)
Anyways... drilling down into a cherry-picked "dataset" or any kind of "conditions" is always a good thing. It's one of the reasons I believe that all trading system, models and even styles/methods are a curve-fit of the market to an extent. Of course, risk management skill is only part of the whole, of what is required to survive as a trader...
Good luck trading... all...
I'll add a few things. Cherry picking is a major issue with money management because you're trying to take a non-biased probability (like flippin' coins) and "optimizing" or "curve-fitting" your trade management rules intentionally... (as Trader Zones has mentioned....)
But if you know the market conditions in which you are "cherry picking" you can control/reduce the risks of running a "curve-fitted" set of rules because markets are not "a coin toss". As long as you have a clear-cut understanding and knowledge about what you are dealing with there are ways to manage them.
A lot of people recommends newbies to pick a few markets and get competent with the specific tendency of the particular product you're trying to "master". You takes these tendencies and identify differences between by comparing them with other markets, this leads to a better understanding of how to trade more markets. Of course, you take the cumulative knowledge and test them out to see if there are any significances with relative to a "normal" condition.
Another example would be... let's say that for a particular market... The S/R holds strong when the relative volume of day is lower than the previous day. I can run a test for both setup conditions with/without the selection bias and come up with a risk management scheme for utilizing the study. (I've over-simplified the example... I know... but hopefully you get the point...)
Anyways... drilling down into a cherry-picked "dataset" or any kind of "conditions" is always a good thing. It's one of the reasons I believe that all trading system, models and even styles/methods are a curve-fit of the market to an extent. Of course, risk management skill is only part of the whole, of what is required to survive as a trader...
Good luck trading... all...