Quote from Banjo:
Cheese, Gnome has it wired here, what you're suggesting is the equivelant of remaining in your chair instead of asking the pretty girl to dance, no chance of rejection. Artfull players know when to lean, fully extend their risk parameters, and when to pull in their claws. You're into a slide rule mentality that will grind out limited wins as well as limited losses. I'm not saying it's wrong, just that it's a plateau along the road.The next step encounters emotional barriers. No matter where one is on the road the next step always requires an expansion of perception that can place one in the position of self doubt, a degree of fear. If one creates a system thats working and then stops working one moves on and creates the next system, the next proper perception of the market. The belief in ones ability to properly percieve, create and choose the time to apply the acummulated knowledge, of the mkt and self, is landing on the unsinkable lily pad. Believing in that feeling of knowing this is the moment to get up off the chair and ask that georgous thing to dance is the Holy Grail. If you get there you may see you had it all along, it was the gift of fear from those around you that kept you seated.
I agree 100%.
I have read all the posts in this thread, and although the "emotions" that people experience are somewhat alien to me, I fully understand that someone call feel that way.
Here is a little background on me that taught me alot about how I work, and if it can be generalized, how the brain works.
I grew up learning to play chess. I also grew up listening to classical music. I used to go to a chess club where lots of really sharp older people would go (I was all of 15 years old.) We used to play lots of music while we played speed chess, mostly classical, but every once in a while, people would put jazz on and I did not like it.
My mind very early on was shaped by having total information, and the only limitation to doing better was to search deeper into a chess position. I remember how I was in those days. All things were black and white.
A chance event happened. Someone came in to the club that had moved from the east coast. It was a chess club, but we liked playing all kinds of games. This man brought a game called bridge and taught it to many. I was very hesitant at first, and considered it an inferior game because it was a card game and therefore it must be luck. I don't remember why I decided to learn to play bridge, but I did.
Now here is the point of this story, and perhaps as it relates to this thread. I learned to pay bridge, and the way that I started thinking, the way you had to think about the game, completely threw my chess off. I would start to look at chess positions as some sort of probabilistic thing, and I also started to look at my opponent for clues. That was not the way I played chess, but it is the way you play bridge!
What is more, I started to like jazz. My mind went back and forth between confusion and stability as my brain reorganized itself to be able to handle a game with "complete" information, and one where making "mistakes" is part of the game.
I learned that there are two types of mistakes that are made, the kind where you do the right thing based on a knowledge of probability, but turns out wrong, and doing the wrong thing and turning out right or wrong. In chess, there is only one kind of mistake.
But here is the most important lesson I learned from Bridge. Even at the lowest level of the game, being able to simply do the mathematically correct thing will not get you anywhere. What I learned was that the single most important part of success is to put enourmous pressure on the opponents to do the wrong thing (which in Bridge means taking the information content away from them so that they have to guess - the weaker the player the worse he guesses,) while taking a very middle of the road and measured approach when the opponents applied the squeeze on us.
In this microcosm that is a game, one also learns alot about the the human element. I realized that I was playing against people that were smart, but simply did not have that ingridient, I do not know even to this day what it is, to think correctly about incomplete information. It was always one thing or another, either logic, or confidence, or "feel", or technique, or any one of a number of countless things that are required to succeed at the game. These people reach a plateau they can never overcome.
I am not sure why I felt I needed to respond in this manner to this post, I only know that in all that morrass that is how my life shaped, shapes the way I trade everyday, and how I look for new ways to trade.
To answer the original question, I think that many people read books like the "Market Wizards" and see many different approaches that work and therefore believe that trading is mostly psychological. To me, this point of view is like the people that want to continue using the Bible to deal with modern day moral issues. Some things stay the same and "old advice" works, but not all things do, and books are static things.
IMO, Psychology is where people that either do not have the right mental make up to trade in the first place, or desperately cannot find a repeatable edge, or both, look for answers.
Every generation will have it's market "wizards," and the one's that continue to do well are constantly noticing the changes in structure of information forming by the actors that play the market everyday.
The market is the ultimate super attractive giddy woman - she wants your full attention, wants 100% full control of the situation always, will leave you for someone else in an instant, and unless you can keep up, you are history.
nitro
... I need to get a life... ... ...