I think I may still not be coming accross completly, and I need to be careful lest someone think that I am being supersticious or something along those lines.
When you learn any endeavor, the first thing we do is we learn the rules. Like in Chess, you learn that you can't castle through check, or that bishops move diagonally on their own colors. All of this can be taught to a computer with little effort.
Then as we progress, we learn technique. How to make with K + Q. How to convert a pawn majority into a win, etc. All of this can be taught to a computer with little effort.
Then we learn stratgies and patterns. For example, there are patterns of tactics in attacking a castled king. These sorts of strategies, while more complicated than the previous patterns are more complicated are still within the domain of computer understanding. Note that I am not suggesting that you sit down in front of a Grandmaster and without knowing a thing about Chess that you feel your way and orginize your game accordingly. You need all the technique that you fed your left hemisphere. But there comes a point in every game where you can no longer fall back on technique and rely purely on "rules."
Once the game reaches this stage, the outstanding players play at a level where while they may be trying to reduce the game to a technically won position, the compications are so vast that it is their feel for similar positions that guides them in searchinng for candidate moves in their analysis.
What does this have to do with trading? What I am trying to point out is that a trader needs to acquire all the basic techniques of trading that are known. For example, it is technique that IRs affects different sectors in differernt ways. You acquire this technique through standard left brain techniques like linear regression to find betas, etc.
But once you are trading in the middle of a day, while that technical expertise that you have acquired guidess the trades you make, it is ultimately feel for the discretionary trader that guides a trade within a particular instrument on way or the other. The reason for this is that there are fanstastic number of casual elements that affect the movement of an instrument. That is what I mean by dimensionality - for example, C is affected by the spread of the 2 and 10 year notes. But is also affected by a host of other things, all of which the market can choose to look at the glass half full or half empty, on any given day.
The real artistry comes in deciding what to focus on, when the "feel" is not right, perhaps because something else, like say a big buyer has just come into C options demaing calls. This is a new dimension that may not have been present for the last week, and C is now entangled with a hedge fund. Your right brain will pick this up immediately, but the rest of you may be confused for a bit.
This is a reeeeeally small encapsulation of what I mean. I have no idea if it makes sense to anybody yet, but it is as certain to me as the sun rises in the east and sets in the west.
nitro
When you learn any endeavor, the first thing we do is we learn the rules. Like in Chess, you learn that you can't castle through check, or that bishops move diagonally on their own colors. All of this can be taught to a computer with little effort.
Then as we progress, we learn technique. How to make with K + Q. How to convert a pawn majority into a win, etc. All of this can be taught to a computer with little effort.
Then we learn stratgies and patterns. For example, there are patterns of tactics in attacking a castled king. These sorts of strategies, while more complicated than the previous patterns are more complicated are still within the domain of computer understanding. Note that I am not suggesting that you sit down in front of a Grandmaster and without knowing a thing about Chess that you feel your way and orginize your game accordingly. You need all the technique that you fed your left hemisphere. But there comes a point in every game where you can no longer fall back on technique and rely purely on "rules."
Once the game reaches this stage, the outstanding players play at a level where while they may be trying to reduce the game to a technically won position, the compications are so vast that it is their feel for similar positions that guides them in searchinng for candidate moves in their analysis.
What does this have to do with trading? What I am trying to point out is that a trader needs to acquire all the basic techniques of trading that are known. For example, it is technique that IRs affects different sectors in differernt ways. You acquire this technique through standard left brain techniques like linear regression to find betas, etc.
But once you are trading in the middle of a day, while that technical expertise that you have acquired guidess the trades you make, it is ultimately feel for the discretionary trader that guides a trade within a particular instrument on way or the other. The reason for this is that there are fanstastic number of casual elements that affect the movement of an instrument. That is what I mean by dimensionality - for example, C is affected by the spread of the 2 and 10 year notes. But is also affected by a host of other things, all of which the market can choose to look at the glass half full or half empty, on any given day.
The real artistry comes in deciding what to focus on, when the "feel" is not right, perhaps because something else, like say a big buyer has just come into C options demaing calls. This is a new dimension that may not have been present for the last week, and C is now entangled with a hedge fund. Your right brain will pick this up immediately, but the rest of you may be confused for a bit.
This is a reeeeeally small encapsulation of what I mean. I have no idea if it makes sense to anybody yet, but it is as certain to me as the sun rises in the east and sets in the west.
nitro
Quote from illiquid:
Just in response to this as a response to what I posted, I came to this conversation late and may have misinterpreted or assumed something that was not there; apologies if I confused the issue somewhat (I think I got nitro's and thunder's views reversed).
Your last post comes across pretty clearly, especially from your angle of what ET or individual traders are limited to; sometimes, "feel" is all we really have to work with, or at least is what finally gets us to pull the trigger, given that our access as individuals to information is less than ideal to say the least. We cannot play the same game on the same level as the street, but the tape that "doesn't feel right" due to the trader or institution quietly trying to unload/ build a large position against the grain of the current move can sometimes be our only tradable "echo" of the actual supply/demand impetus.
