Analysis paralysis

[Scanjet]

I'm intrigued by the thought. I've conjured up the image of some members running half a dozen systems at the same time on their demo accounts. 2 say buy cable, 2 say sell cable, 3 say sell the beast, 1 says buy the beast, 4 say sell the loonie........
The result being the unhappy owner sits there paralysed by analysis. Am I correct? Meanwhile. the real trading opportunities pass them by........

 

[0007]

I'm intrigued by the thought. I've conjured up the image of some members running half a dozen systems at the same time on their demo accounts. 2 say buy cable, 2 say sell cable, 3 say sell the beast, 1 says buy the beast, 4 say sell the loonie........
The result being the unhappy owner sits there paralysed by analysis. Am I correct? Meanwhile. the real trading opportunities pass them by........

Only works if you've got at least a dozen screens.

 

[trendie]

I'm intrigued by the thought. I've conjured up the image of some members running half a dozen systems at the same time on their demo accounts. 2 say buy cable, 2 say sell cable, 3 say sell the beast, 1 says buy the beast, 4 say sell the loonie........
The result being the unhappy owner sits there paralysed by analysis. Am I correct? Meanwhile. the real trading opportunities pass them by........

Yep, correcter than a correct thing from the planet correct.

I think the use of multiple systems comes from a fear of missing a big move, or lack of belief and commitment to a particular system. (emotional hedging)
In a word, attempting to find certainty. (holy grail)
Ironically, you end up introducing greater uncertainty.

Best option, stick to one rule-set, and if you fear missing out, apply one rule-set to a bigger range of markets, rather than multiple rule-sets to a small range of markets.

There is a peculiar sense of loss if the day progresses and you havent taken a trade, and you start finding reasons to trade.
Multiple systems give you the illusion of choice/opportunity, ie, they give you something to do, rather than giving you the right thing to do.

have a good, long, bank holiday weekend.

 

[Scanjet]

Hey, there are some sensible traders on here after all. I was getting worried...

 

[Scanjet]

Oh well.....

GBPJPY is known as the beast.

 

[stevespray]

.......But statistically;

Say you have 3 systems which you have proven to work over an extended period of time. You are faced with two choices;

1) Pick one system and trade it exclusively

or

2) Trade all 3 systems with smaller stakes knowing that from time to time one system will contradict the other but happy in the knowledge that the law of averages will make your equity growth curve much smoother than if just traded one system.

Views?

Steve.

 

[JTrader]

I only trade 1 approach. My dilemnas arise when i start comparing performance over different timeframes, and whether the different timeframes are telling me the same thing, at the same time, which can cause confusion.

For me, the way to solve this problem is to only look at and focus on one timeframe, and ignore the others timeframes.

There will be times when all the timeframes agree with my primary timeframe and the trade fails. Just like there'll be times when the other timeframes disagree with my primary timeframe and the trade succeeds. Therefore for me, such over analysis not only can cause confusion, ultimately it can often be of no benefit anyway.

 

[0007]

I'm intrigued by the thought. I've conjured up the image of some members running half a dozen systems at the same time on their demo accounts. 2 say buy cable, 2 say sell cable, 3 say sell the beast, 1 says buy the beast, 4 say sell the loonie........
The result being the unhappy owner sits there paralysed by analysis. Am I correct? Meanwhile. the real trading opportunities pass them by........

This is obviously the very antithesis of keeping it simple ! Over the years I have experimented with many indicators / systems / methodologies with varying degrees of success, but never all at the same time. The brain (or at least mine) just won't cope. Learning to trade is a skill that can be learnt (but possibly not excelled at) by anyone with a modicum of aptitude and will-power (forget the no-hopers). But like any complex skill you do have to take it by stages, and even when you think you do know what you're doing, [and i suppose that's when you are tempted to start trading multiple systems] I've always found it best to kep it as simple as poss and even then you get the odd personal Black Swan day!

To me, running many systems simultaneously in order to trade, smacks of desperation or a fundamentally wrong approach. Except of course, if your hobby is systems and you are a bit of a genius - but that rules me out at least!

Studies have shown that the brain does not cope well with information overload - especially in stress situations: and that's what trading can be. The reflex action is to dump most decision-making inputs and revert to ingrained habits / solutions /responses. That's why it's important to do the right thing always (eg honour your stops) and know one system really well that works for you. Isn't this the attraction of successful mechanical systems - they take out the human element? Presumably that's ok until the stupid computer (using the human-designed less-than-adequate algorithm or logic) fails to recognise the bleedin' obvious .....


I must say though, I still find the mental picture of a guy with dozens of screens monitoring loads of systems in real-time, very entertaining especially if "the boy done good".

All IMHO

 

[rols]

I only trade 1 approach. My dilemnas arise when i start comparing performance over different timeframes, and whether the different timeframes are telling me the same thing, at the same time, which can cause confusion.

For me, the way to solve this problem is to only look at and focus on one timeframe, and ignore the others timeframes.

There will be times when all the timeframes agree with my primary timeframe and the trade fails. Just like there'll be times when the other timeframes disagree with my primary timeframe and the trade succeeds. Therefore for me, such over analysis not only can cause confusion, ultimately it can often be of no benefit anyway.

You could not be more barking up the wrong tree

Taking account of what traders on higher TFs are doing is a vital part of trading IMO

All brilliantly covered in Jankovsky's book 'Trading Rules that Work'

BTW That new atavar is very distracting
Difficult to concentrate on the text and golden nuggets

 

[Crap Buddist]

I'm intrigued by the thought. I've conjured up the image of some members running half a dozen systems at the same time on their demo accounts. 2 say buy cable, 2 say sell cable, 3 say sell the beast, 1 says buy the beast, 4 say sell the loonie........
The result being the unhappy owner sits there paralysed by analysis. Am I correct? Meanwhile. the real trading opportunities pass them by........

Well i would of thought these types of traders have a greater love of money over a love of trading ,OR are still yet to see a choice, which is fair enough, but why would multi system traders bother about what signal says what or when, if there is no real caring to learn more detail ,for themselves?

If people care about or seem to question the mix of signals of the system , then maybe they really want to trade a method that attempts to "teach" them some sort of market internals or structure. So they can learn to trade with knowledge and perhaps get a greater trust,confidence and reward of doing business in the environment.

I'd say if someones very unhappy trading a blackbox mechanical system, what they really might need for themselves, is the desire to gain understanding through learning about the subject matter. Of course this often entails years of dedication? desire comittment a real passion sort of thing.... ?

just how I look at it, could someone care about trading and trading a black box system ? hmmm.... LOL err, yeah to a point I guess..... but i dunno, depends on what drives the individual forward I guess.......

 

[Scanjet]

I agree wholeheartedly with 0007 and Rols.
The majority of the available systems and commercially available EA's are, I suspect, merely interesting,if expensive, diversions. But then, the only difference between men and boys is the price of the toys..... If one gets satisfaction from playing with them then they are satisfying an inner need. EA's on demo accounts are fun, but would you really want to go on vacation and leave your expert trading your $100k account? I'd spend the whole time worrying if I still had a roof over my head. With 2 EA's trading my wad I'd probably become paranoid enough to qualify as a moderator on this board...

Rols comments on higher TF's are dead on from my perspective. If you're trading 5min you should be watching 15,60 and 240 mins. If you're trading 1hr then watch 4hr and daily...

And finally, if the money that was spent on EA's and systems was invested in Charting and Candlestick books I suspect many would find their bank growing, not shrinking. Support, resistance, trend lines and fib retracements together with an understanding of the better recognised Japanese candlesticks and you're 80% of the way there. Know which news announcements to incorporate into your plan and you can probably add another 10%. The rest will be luck.

 

[Scanjet]

As a postscript to the above I should add that money management is the most important consideration of all IMHO. Trade risk and overall risk are what needs to be managed and I don't think anybody should trade a live account until they know the meaning of this.

 

[Crap Buddist]

3 little words.... again

the unhappy owner

man , i keep seeing 3 words that get my snout in the sh1t of the matter...... ?

So to answer your question, one should seek to determine. What is making each individual (out of the hundreds of thousands of owners,as they are all individuals?) unhappy.

How would you know if the indivual is suited to trade black box systems or use an approach based on understanding of environment?

I don't see it as an elitist thing (well always fun to rip the p1ss now and then in a sporting way) but , I think a system trader will need certain training to cope with the sporadic & simply the fact that the trader is ignorant to the environment, hence its very likely and very normal for them to have to deal with "programming thmeselves/realising to condition to function in this way. Which is likely counter to their conditioned being.

Understanding each indivual is the most important thing or its up there, IF you are seeking to train / enlighten INDIVIDUALS to funtion in a manner which is or has been established as important to them and their direction.Otherwise it will likely be a waste of time, money and other resources. But hey how many of us see individuals these days?

hmmm I saw a snippet on the goggle the other day ,just out the corner of my bat sonars and it said " The crowd cannot make the correct choice between RIGHT OR WRONG"

Now that is weird and amazing,scary .... crowds cannot freely choose right or wrong actions... lol like why not ? its like some force has taken over the individuals mind ?

BUT that said. ALL LIQUIDITY IS GOOD!

So what is making each owner unhappy? We wont know until we ask each of them ? yes, makes sense.

 

[Scanjet]

The thing that is making the owner of multiple systems unhappy is confusion and uncertainty caused by multiple and often conflicting choices. Analysis paralysis set in and the owner wishes he didn't have all these choices to consider..... And whilst he's sitting there agonising over all this he suddenly notices that cable has had a nice gentle 120point decline and he wasn't on board......

 

[Crap Buddist]

The thing that is making the owner of multiple systems unhappy is confusion and uncertainty caused by multiple and often conflicting choices. Analysis paralysis set in and the owner wishes he didn't have all these choices to consider..... And whilst he's sitting there agonising over all this he suddenly notices that cable has had a nice gentle 120point decline and he wasn't on board......

Hello. This ties in with my view about needing to train system traders to function in this environment which will likely be sporadic random . Humans are generally not taught to interact and function logically with this scenario.

Most are hard wire from birth to react in certain ways, especially when confusing situations crop up. when we are faced with the unknown, fight or flight can whack in. Much like the crowd unable to choose the right thing to do ingrained instint in uncertain situations may well over ride the persons conscious actioning part of themselves.

hence I did that ,but I didnt know why i did it ? Like taking some trades and not other trades, moving stops when fearing, closing profits when fearing. For fearing I guess one could use Not Knowing instead, as when we dont know we can act without knowing why.

?? query all that lot, just some ideas.

 

[Scott47]

LIvermore only worked on price action as I see it, why confuse the issue...

 

[dcraig1]

LIvermore only worked on price action as I see it, why confuse the issue...

He ended up killing himself didn't he ?

 

[Scott47]

Yes that's true, but probably because he never stuck to his own rules.