I was referring specifically to seeing the big picture and noting the details when it comes to how ones intelligence is measured as per IQ tests.
Often those who see details will score well in one area and those who see big picture in another but generally both will not score exceptionally high. Those that can see both are the ones who score exceptionally well.
When it comes to leaders it is almost invariably the case that they are "big picture" thinkers. This is simply the nature of a leader. Generally, they have the vision and the will to step out from the crowd and attempt to make that vision a reality. Unfortunately they rarely have the attention to detail needed to know how to actually move the vision into reality. Hence the need for "details" people.
Neither type is inherently more intelligent to than the other when it comes to how we measure IQ. It all comes back to how one can utilise the entirety of their cognitive abilities.
Cheers,
PKFFW
BSD
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Indeed. Huge majority no doubt.
Who was it said that those who do not know what they want will end up where they didn't want to.
;-)
Who could argue with that.
Jaydee
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90% (probably more) do fail but I think the way you should look at this is how much of the 10% remainder were successful from the start? Probably about 0% - they all worked damned hard and never got put off from their earlier failures. The only reason the other 90% failed was because they gave up or blew their accounts through being idiotic.
"I have not failed - I just found 10,000 ways that wouldn't work" - Thomas Edison
new_trader
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"I have not failed - I just found 10,000 ways that wouldn't work" - Thomas Edison
Very positive, Tommy was.
He was referring to trading when he came up with that quote. It's a little known fact but he is one of the 90% that failed at trading. It was during one evening when he was back testing another moving average crossover system and because of the poor lighting he couldn't tell whether the 20MA was the orange or the red line. He decided to do something about it and the rest is history.
BSD
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Bladerunner
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Perhaps a bit of this mixed in for good measure would"nt help much
Cognitive Dissonance
Quote from “Basic Psychology”, Henry Gleitman, Norton 1983 “Cognitive Consistency”
... people try to make sense of the world they encounter. But how? In effect,they do this by looking for some consistency among their own experiences and memories, and turning to other people for comparison and confirmation. If all checks out, then all well and good. But what if there is some inconsistency? The Asch study (Solomon Asch, 1956) showed what happened when there is a serious inconsistency between one’s own experiences (and the beliefs based on them) and those reported by others. But suppose the inconsistency is among the person’s own experiences, beliefs or actions? Many social psychologists believe that this will trigger some general trend to restore cognitive consistency - to reinterpret the situation so as to minimize whatever inconsistency may be there. According to Leon Festinger, this is because any perceived inconsistency among various aspects of knowledge, feelings and behavior sets up an unpleasant internal state - cognitive dissonance - which people try to reduce whenever possible (Festinger, 1957).
Cognitive dissonance is not always reduced so easily. An example is provided by a study of a sect that was awaiting the end of the world. The founder of the sect announced that she had received a messsage from the “Guardians” of outer space. On a certain day, there would be an enormous flood. Only the true believers were to be saved and would be picked up at midnight of the appointed day in flying saucers. (Technology has advanced onsiderably since the days of Noah’s Ark.) On doomsday, the members of the sect huddled together, awaiting the predicted cataclysm. The arrival time of the flying saucers came and went; tension mounted as the hours went by. Finally, the leader of the sect received another message: To reward the faith of the faithful, the world was saved. Joy broke out and he believers became more faithful than ever. (Festinger, Riecken and chachter, 1956)
Given the failure of a clear-cut prophecy, one might have expected the very opposite. A disconfirmation of a predicted event should presumably lead one to abandon the beliefs that produced the prediction. But cognitive dissonance theory says otherwise. By abandoning the beliefs that there are Guardians, the person who had once held this belief would have to accept a painful dissonance between her present skepticism and her past beliefs and actions. Her prior faith would now appear extemely foolish. Some members of the sect had gone to such lengths as giving up their jobs or spending their savings; such acts would lose all meaning in retrospect without the belief in the Guardians. Under the new circumstances, the dissonance was intolerable. It was reduced by a belief in the new message which bolstered the original belief. Since other members of the sect stood fast long with them, their conviction was stengthened all the more. They could now think of themselves, not as fools, but as loyal, steadfast members of a courageous little band whose faith had saved the earth.
couple of links that may be of use to anyone in trouble ~
T2W Day Trading & Forex Community
T2W Day Trading & Forex Community
Andy
Found it one day following the BSD magical mystery tour bus, thanks markus
I think this goes a long way to explaining it, or at least explains why many what may appear to be reasonably good traders end up not really making it in the end.
The Axiom of the Small Edge:
A trader's long run edge is smaller than he thinks; it is much more akin to a card-counting blackjack player's edge of 1% due to variance, ever-changing cycles, and fear-induced losses.
The Postulate of Trading the Small Edge:
Given The Axiom of the Small Edge, what really matters in money management is that a trader always be prepared, always be able to hold a position with a positive edge that goes against him, and always be able to take the next trade:
Imagine
The worst trading day you've ever had. The seconds ticking by, the disaster scenarios playing vividly out.
Imagine
The blackjack player. His edge is 1% or 2 hands/100.
Imagine
The pressure.
Imagine
The public speaker. Stammering, nervous, unpracticed and unprepared.
Imagine
The blackjack player, the public speaker and the trader as one.
Imagine
Once per month being unprepared: 12 hands Once per quarter succumbing to the pressure: 4 hands Once per quarter not taking the next trade, not betting the correct size: 4 hands
Imagine
The blackjack player giving up 20 hands to the house:
His edge is now -18%
Imagine
The blackjack player and the trader as one.
"His edge is now -18%."
The Axiom of the Small Edge and The Postulate of Trading the Small Edge say that what really matters in money management is that a trader always be prepared, always be able to hold a position with a positive edge that goes against him, and always be able to take the next trade.
That kind of pressure adds up and results can go down the pan even more ~ Food for thought anyway pehaps
Andy
Cognitive Dissonance
Quote from “Basic Psychology”, Henry Gleitman, Norton 1983 “Cognitive Consistency”
... people try to make sense of the world they encounter. But how? In effect,they do this by looking for some consistency among their own experiences and memories, and turning to other people for comparison and confirmation. If all checks out, then all well and good. But what if there is some inconsistency? The Asch study (Solomon Asch, 1956) showed what happened when there is a serious inconsistency between one’s own experiences (and the beliefs based on them) and those reported by others. But suppose the inconsistency is among the person’s own experiences, beliefs or actions? Many social psychologists believe that this will trigger some general trend to restore cognitive consistency - to reinterpret the situation so as to minimize whatever inconsistency may be there. According to Leon Festinger, this is because any perceived inconsistency among various aspects of knowledge, feelings and behavior sets up an unpleasant internal state - cognitive dissonance - which people try to reduce whenever possible (Festinger, 1957).
Cognitive dissonance is not always reduced so easily. An example is provided by a study of a sect that was awaiting the end of the world. The founder of the sect announced that she had received a messsage from the “Guardians” of outer space. On a certain day, there would be an enormous flood. Only the true believers were to be saved and would be picked up at midnight of the appointed day in flying saucers. (Technology has advanced onsiderably since the days of Noah’s Ark.) On doomsday, the members of the sect huddled together, awaiting the predicted cataclysm. The arrival time of the flying saucers came and went; tension mounted as the hours went by. Finally, the leader of the sect received another message: To reward the faith of the faithful, the world was saved. Joy broke out and he believers became more faithful than ever. (Festinger, Riecken and chachter, 1956)
Given the failure of a clear-cut prophecy, one might have expected the very opposite. A disconfirmation of a predicted event should presumably lead one to abandon the beliefs that produced the prediction. But cognitive dissonance theory says otherwise. By abandoning the beliefs that there are Guardians, the person who had once held this belief would have to accept a painful dissonance between her present skepticism and her past beliefs and actions. Her prior faith would now appear extemely foolish. Some members of the sect had gone to such lengths as giving up their jobs or spending their savings; such acts would lose all meaning in retrospect without the belief in the Guardians. Under the new circumstances, the dissonance was intolerable. It was reduced by a belief in the new message which bolstered the original belief. Since other members of the sect stood fast long with them, their conviction was stengthened all the more. They could now think of themselves, not as fools, but as loyal, steadfast members of a courageous little band whose faith had saved the earth.
couple of links that may be of use to anyone in trouble ~
T2W Day Trading & Forex Community
T2W Day Trading & Forex Community
Andy
Last edited:
Lord Flasheart
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Great post Andy
tradespreads
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What happened to the remainder of this post/thread?
Lightning McQueen
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There has been a thread split, a post was made earlier in the thread, please follow the link in the post.
http://www.trade2win.com/boards/first-steps/37910-90-fail-13.html#post509820
When you consider the wealth that some have amassed through trading and investing, it stands to reason that most traders lose money. It takes a lot of people losing smaller amounts of money to create those fortunes.
I know the main reasons why traders lose money from experience. I've made every mistake in the book -- most of them in my first few years of trading.
I started trading stock options in the 1970s, a couple of years after the CBOE was approved to make a market in standardized equity options. I started with $300 (two Ashland Oil calls at 1 1/2 that doubled over the next few weeks). Over the next couple of years, I traded that up to just under $9,000.
After a couple of years, when I had traded up to about $6,000, I began to see stocks breaking out of long-term (several months or longer) bases with flat tops on high volume, and I began day-trading (long before I ever heard the term) options. My goal was $1,000 per trade, and the first two trades were successful. One was in Halliburton. I don't remember what the second was. The third was in Polaroid options. Just before the close, I had about $880 profit.
Back then, people didn't have computers. I was manually charting 100+ stocks on 11x17 K&E chart paper each night from the first edition of the morning newspaper, so I was buying the day after the breakout. The other stocks with similar breakouts had opened higher on the third day, so I decided to hold until the next morning's opening.
Overnight, the man who had developed the Polaroid SX-70, and who was then heading a team to develop a Polaroid video camera, suffered a stroke. PRD opened down more than 8 points and went south from there. By the time I got out, my $9000 was worth between $150 and $175.
Here are some of the more common mistakes:
1) Not doing the homework. Years later, I looked at a monthly chart of PRD. I saw that, while the stock had moved sideways for a year or so before I bought the breakout, it was in a multi-year downtrend that had taken the stock from something like $160 to about $80, en route to even lower lows.
2) Lack of money management. I had more winning trades than losing trades, and my gains were larger than my losses -- until PRD. I was putting all of my trading capital into each trade.
3) Not sticking to the plan, which at that point was to simply buy as on a confirmed breakout with heavy volume and get out by the close.
4) Being frozen by emotions. Losing objectivity when your money's on the line and selling when you should hold or holding when you should sell. This also involves not sticking to the plan (or not having one in the first place).
5) Expecting the market to conform to expectations. My goal for the trade was $1,000, and when the market didn't give it to me, I decided to wait for it.
Andrew Cardwell gave me another example last week. About three years ago, a golfing buddy of his, who owned 4,000 shares of Washington Mutual, asked him to look at the charts and give him his opinion. WaMu was about 78, and the friend's broker had told him it should reach 80 or 82. Andrew suggested that his friend dump it immediately. However, he decided to hold on for 80. He finally got out of the stock at 9.50.
6) Not adjusting to changing market conditions. Confusing a raging bull market with trading genius also comes under this category. Failing to sell near the top means giving back all those bull-market gains, usually faster than the gains were made. In other words, what works in one market environment usually doesn't work in another.
I can't tell you how many times I've seen a 2- to 5-day RSI divergence that would be very bullish in the early stages of a bull market. In a bear market, this is usually followed by a 1- to 2-day rally -- before the stock falls off the cliff again. In a bear market (whether recognized or confirmed at the time or not), an RSI bullish divergence usually means an opportunity to short the stock isn't far away. The same can be said of other buy signals and upside breakouts, which in bear markets (and in the topping stage of bull markets), usually prove to be false breakouts.
I know the main reasons why traders lose money from experience. I've made every mistake in the book -- most of them in my first few years of trading.
I started trading stock options in the 1970s, a couple of years after the CBOE was approved to make a market in standardized equity options. I started with $300 (two Ashland Oil calls at 1 1/2 that doubled over the next few weeks). Over the next couple of years, I traded that up to just under $9,000.
After a couple of years, when I had traded up to about $6,000, I began to see stocks breaking out of long-term (several months or longer) bases with flat tops on high volume, and I began day-trading (long before I ever heard the term) options. My goal was $1,000 per trade, and the first two trades were successful. One was in Halliburton. I don't remember what the second was. The third was in Polaroid options. Just before the close, I had about $880 profit.
Back then, people didn't have computers. I was manually charting 100+ stocks on 11x17 K&E chart paper each night from the first edition of the morning newspaper, so I was buying the day after the breakout. The other stocks with similar breakouts had opened higher on the third day, so I decided to hold until the next morning's opening.
Overnight, the man who had developed the Polaroid SX-70, and who was then heading a team to develop a Polaroid video camera, suffered a stroke. PRD opened down more than 8 points and went south from there. By the time I got out, my $9000 was worth between $150 and $175.
Here are some of the more common mistakes:
1) Not doing the homework. Years later, I looked at a monthly chart of PRD. I saw that, while the stock had moved sideways for a year or so before I bought the breakout, it was in a multi-year downtrend that had taken the stock from something like $160 to about $80, en route to even lower lows.
2) Lack of money management. I had more winning trades than losing trades, and my gains were larger than my losses -- until PRD. I was putting all of my trading capital into each trade.
3) Not sticking to the plan, which at that point was to simply buy as on a confirmed breakout with heavy volume and get out by the close.
4) Being frozen by emotions. Losing objectivity when your money's on the line and selling when you should hold or holding when you should sell. This also involves not sticking to the plan (or not having one in the first place).
5) Expecting the market to conform to expectations. My goal for the trade was $1,000, and when the market didn't give it to me, I decided to wait for it.
Andrew Cardwell gave me another example last week. About three years ago, a golfing buddy of his, who owned 4,000 shares of Washington Mutual, asked him to look at the charts and give him his opinion. WaMu was about 78, and the friend's broker had told him it should reach 80 or 82. Andrew suggested that his friend dump it immediately. However, he decided to hold on for 80. He finally got out of the stock at 9.50.
6) Not adjusting to changing market conditions. Confusing a raging bull market with trading genius also comes under this category. Failing to sell near the top means giving back all those bull-market gains, usually faster than the gains were made. In other words, what works in one market environment usually doesn't work in another.
I can't tell you how many times I've seen a 2- to 5-day RSI divergence that would be very bullish in the early stages of a bull market. In a bear market, this is usually followed by a 1- to 2-day rally -- before the stock falls off the cliff again. In a bear market (whether recognized or confirmed at the time or not), an RSI bullish divergence usually means an opportunity to short the stock isn't far away. The same can be said of other buy signals and upside breakouts, which in bear markets (and in the topping stage of bull markets), usually prove to be false breakouts.
