Dispassionate
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What's the evolutionary advantage of becoming risk-hungry when in difficult circumstances?
Risk-hungry/risk-averseness
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TheBramble
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None whatsover to those who are "risk-hungry [and] in difficult circumstances", but a real genetic boost to those who will pick up their last few pennies.
It's precisely the mindset which takes traders out of the game.
If anyone is in difficult circumstances - they shouldn't be trading.
Even if you're not in dire straits, but taking a hammering, you should be 'going to the mattresses' and becoming even more risk-averse, not risk-hungry.
The time to be a pig and go for greedy is when you're in a winning position and ALL the signs are with you. Green lights all the way. Even that's still no guarantee of walking off with the pot, but that's the ONLY time you should ever be thinking about increasing your risk.
It's precisely the mindset which takes traders out of the game.
If anyone is in difficult circumstances - they shouldn't be trading.
Even if you're not in dire straits, but taking a hammering, you should be 'going to the mattresses' and becoming even more risk-averse, not risk-hungry.
The time to be a pig and go for greedy is when you're in a winning position and ALL the signs are with you. Green lights all the way. Even that's still no guarantee of walking off with the pot, but that's the ONLY time you should ever be thinking about increasing your risk.
strewthmate
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Hi
Human beens are predisposed to hate losing way more than they love winning - Its one of the strongest survival instincts in a dangerous world.. The evolutionary advantage you're referring to is a by product of parts of our brains that haven't really evolved much since we were living in caves.
Imagine back then when we didn't have all the security & comforts we have today - every day you literally had to survive. The loss of that antelope you were chasing that got away can literally impact your survival. The closer you get to the survival boundary, the more chances you will take to secure vital resources. In that envionment risking more is evolutionary advantage because you had no other options and if you didnt risk, you'd probably expire. The more you risk, the more you increase the chance of you living another day.
Back in today's world those exact same brain regions are still operating - we've the same brains as we had 20,000 years ago. So that loss you're sitting on in that Apple trade is hitting exactly the same buttons. Your brain is thinking "I'm losing a resource, quick do something, risk more to get it back, or you'll perish", so you risk more, maybe chase the loss. But really you won't perish (depending on your wife's support for this trading thing!) and risking more will probably wipe you out eventually.
Human beens are predisposed to hate losing way more than they love winning - Its one of the strongest survival instincts in a dangerous world.. The evolutionary advantage you're referring to is a by product of parts of our brains that haven't really evolved much since we were living in caves.
Imagine back then when we didn't have all the security & comforts we have today - every day you literally had to survive. The loss of that antelope you were chasing that got away can literally impact your survival. The closer you get to the survival boundary, the more chances you will take to secure vital resources. In that envionment risking more is evolutionary advantage because you had no other options and if you didnt risk, you'd probably expire. The more you risk, the more you increase the chance of you living another day.
Back in today's world those exact same brain regions are still operating - we've the same brains as we had 20,000 years ago. So that loss you're sitting on in that Apple trade is hitting exactly the same buttons. Your brain is thinking "I'm losing a resource, quick do something, risk more to get it back, or you'll perish", so you risk more, maybe chase the loss. But really you won't perish (depending on your wife's support for this trading thing!) and risking more will probably wipe you out eventually.
TheBramble
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Absolutely right Tuffty. I was being a little narrow in my view thinking Dispassionate was talking only about trading.Tuffty said:
And thinking about it, perhaps the basic reflex - even in a trading situation - for some people may evoke the same response to 'potential death' (death of what I wonder?) in going for an all-or-nothing strategy.
Interesting.
edit: strewthmate - your post goes some way to addressing the point I make here. I Should have read all the posts in the thread before responding...!
Last edited:
efficiency
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Groupies ought to be able to spell the names of their idols...........CHUMP.
Risk aversion. All humans are risk adverse to varying degrees. Hence the herd mentality. The problem is, rewards in life go to the risk takers. You cannot expect to engage in riskLESS transactions.
SMALL losses are the hallmark of a professional. Losses reveal what has to be changed. Repeated losses reflect denial, the wrong form of consistency, and a host of other.......eh........issues.. Traders handle the holes they've dug. Moneymakers avoid most of the holes. They don't tie up capital on sub-optimal trades. Over-trade often enough, and ultimately it ends up with the moneymakers.
Risk aversion. All humans are risk adverse to varying degrees. Hence the herd mentality. The problem is, rewards in life go to the risk takers. You cannot expect to engage in riskLESS transactions.
SMALL losses are the hallmark of a professional. Losses reveal what has to be changed. Repeated losses reflect denial, the wrong form of consistency, and a host of other.......eh........issues.. Traders handle the holes they've dug. Moneymakers avoid most of the holes. They don't tie up capital on sub-optimal trades. Over-trade often enough, and ultimately it ends up with the moneymakers.
