How To Think Correctly

[SOCRATES]

With the amount of posting you do on trade2win, where do you find the time to trade SOCS

When the market is going sideways or when there are no opportunities for whatever reason or, when I have finished for the day then I am free to do with my time as I please.

 

[Charlton]

A valuable learning process

You all talk of trading as it is something mystical, that takes years and years of live trading in order to become successful.

I don't think there is anything mystical about it, but I would say that, like any skill, it takes time to master it and to reach greater heights.

Just because it takes some people years and years to learn , does in no way imply that it will take another person the same length of time.

Absolutely - like any skill, some have more natural talent or aptitude than others

In fact, I will take it one step further, and say that someone who has no trading experience whatsoever, has a far better chance of making consistent returns, if they are willing to commit to what must be done from the outset, not what they want to do, or think they want to do, based on the opinions of others.

Correct again - if the right mindset is there at the outset then someone who is a novice might well perform better than someone who has been performing the activity for some time without much success. Some as I said earlier seem to have a natural talent, which includes the right frame of mind. This does not preclude others from attaining it through hard work and experience, but for some it comes easier than for others.

The first step is realising the fact that one must start to think differently than the majority.

There are proven techniques available that will allow this to happen, and by adopting these techniques, one will then be able to learn How To Think Correctly.

Very important.

Now a lot of anger seems to be generated on this thread and others when the topics of how one develops as a trader comes up. I think this might arise because:

(a) some participants don't need to go through some of these processes of self-awareness, because they are naturally suited to the process of trading, thus they do not understand why others have to, for example, read and follow Trading in the Zone

(b) some participants may need to go through this process but are not yet aware of it and become annoyed because of reasons of denial

(c) some participants happen to have struck on a mechanical based strategy, which for the time-being is successful

No matter what I or anybody else says on this site, the proof of the pudding is in the eating. Is the success of your strategy including money management, risk management and any work you may or may not need to do on self-awareness verified in monetary terms ? I am, of course, assuming your goal is to make money. If it results in consistent returns of the magnitude you expect and, if those expectations are valid for you, then it is a successful strategy of which you should be proud and which will be personally fulfilling. If on the other hand you fail to meet your own expectations or your expectations are not valid, then it needs work if you wish to continue as a trader.

It doesn't realy matter what the strategy is - MA, fib, SAR, astrology, as long as they work for you. This is the mechanical level and there is plenty of information available about how to work these strategies at a purely mechanical level.

The "secret" is to find a strategy that you are comfortable with. If trading were a sport, then you might not get along with football, but love tennis. Either may fulfill you and make you fit, but you need to find the one which works for you.

That's why we should be looking with an open mind at those pieces of information presented to us by other members and taking the parts we find useful and discarding those we do not. Whenever we absorb or discard such information we should know why we are doing so and how this contributes to improving our strategy. There is no need to get annoyed if someone holds a contrary view. That is their right. If we get annoyed we should be asking ourselves why ? How does this knowledge help us in our trading. This is the process of stepping ourside ourselves.

This site has been suffering a "brain-drain" for too long now and there is a review of how it may be improved. Thankfully we are starting to see new contributors such as CYOF and DamianOakley ,who are willing to put quite a bit of hard work into contributing in a positive way. In saying this I also acknowledge the contrbutions made by the "old-timers", and here I include both Socrates and DBPhoenix in their different ways.

We can learn something from all of them if we open ourselves to the process.

Charlton

 

[CYOF]

I don't think there is anything mystical about it, but I would say that, like any skill, it takes time to master it and to reach greater heights.
Absolutely - like any skill, some have more natural talent or aptitude than others
Correct again - if the right mindset is there at the outset then someone who is a novice might well perform better than someone who has been performing the activity for some time without much success. Some as I said earlier seem to have a natural talent, which includes the right frame of mind. This does not preclude others from attaining it through hard work and experience, but for some it comes easier than for others.
Very important.

Now a lot of anger seems to be generated on this thread and others when the topics of how one develops as a trader comes up. I think this might arise because:

(a) some participants don't need to go through some of these processes of self-awareness, because they are naturally suited to the process of trading, thus they do not understand why others have to, for example, read and follow Trading in the Zone

(b) some participants may need to go through this process but are not yet aware of it and become annoyed because of reasons of denial

(c) some participants happen to have struck on a mechanical based strategy, which for the time-being is successful

No matter what I or anybody else says on this site, the proof of the pudding is in the eating. Is the success of your strategy including money management, risk management and any work you may or may not need to do on self-awareness verified in monetary terms ? I am, of course, assuming your goal is to make money. If it results in consistent returns of the magnitude you expect and, if those expectations are valid for you, then it is a successful strategy of which you should be proud and which will be personally fulfilling. If on the other hand you fail to meet your own expectations or your expectations are not valid, then it needs work if you wish to continue as a trader.

It doesn't realy matter what the strategy is - MA, fib, SAR, astrology, as long as they work for you. This is the mechanical level and there is plenty of information available about how to work these strategies at a purely mechanical level.

The "secret" is to find a strategy that you are comfortable with. If trading were a sport, then you might not get along with football, but love tennis. Either may fulfill you and make you fit, but you need to find the one which works for you.

That's why we should be looking with an open mind at those pieces of information presented to us by other members and taking the parts we find useful and discarding those we do not. Whenever we absorb or discard such information we should know why we are doing so and how this contributes to improving our strategy. There is no need to get annoyed if someone holds a contrary view. That is their right. If we get annoyed we should be asking ourselves why ? How does this knowledge help us in our trading. This is the process of stepping ourside ourselves.

This site has been suffering a "brain-drain" for too long now and there is a review of how it may be improved. Thankfully we are starting to see new contributors such as CYOF and DamianOakley ,who are willing to put quite a bit of hard work into contributing in a positive way. In saying this I also acknowledge the contrbutions made by the "old-timers", and here I include both Socrates and DBPhoenix in their different ways.

We can learn something from all of them if we open ourselves to the process.

Charlton

Very well put Charlton - and not just because you mentioned me, I am gone well past the stage of caring what people think of me - but because everything you said is FACTUAL.

One should ask themselves - what do I really want to do, and what must I then do make this happen - to make something happen with my trading.

ASK>ASK> ASK> ASK>ASK>ASK>ASK>ASK< ASK> ASK> ASK>ASK>ASK>ASK>ASK>ASK

Now, you might not always hear what you want to hear, but that is what learning is all about.

I am sick and tired of people who will not ASK a question.

It reminds me of my daughter in college - I keep telling her to ask the lecturer what it is she does not understand - she just can't get it into her head that is what college is all about - ASKING questions so that you can learn.

It is a pity that some professors are stupid though, as when someone does eventually ask, the idiots stamp their foot, as much to say why are you asking me such a stupid question.

It would do everyone who teaches a great justice to read:

Of The Education of Children - see my previous quotes.

As I keep saying, History keeps repeating itself over and over.

Stop looking and ASK - remember the purpose of the Socratic dialogue:

Self improvement of the teacher and the student.

You all don't think I am doing this just for ye, do ye :cheesy:

 

[firewalker99]

...

...
2. As someone who has done econometrics and written a paper on it I do know something about forecasting and correllation coefficients and the 95% distribution curve. I certainly wouldn't claim to be an expert but been there done it.
3. I do have some experience of trading shares warrants and spread betting.
4. And I have a thirst for knowledge, enthusiasm to learn and the strength of character.

In all these you put down all my dear professors, teachers, colleagues and friends and articles in books and journals - in making some bold assumption that they are of no use. That is funny.

How stupid have I been listening to them when I should have been listening to you and chump?

Atilla, a late reply, but seems like this thread was quite busy today!
Your reaction reminds me of myself some time ago. Actually I have a degree in economics next to computer science. But I can tell you I won't help you out here, not in the markets. In fact, forget all you know and what you've been taught. Yes statistics might come in handy when you're analyzing your testing our your results, but I wouldn't bother trying to forecast what the market is doing to do.

Rather than that, I would suggest you focus on how to take advantage of whatever it is the market is doing now, instead of thinking of what the market is going to do or might do. In my experience trying to forecast can blur your vision. You are no longer focusing on what is happening, but you are focusing on the elements that are confirming your hypothesis and ignoring the obvious facts to the contrary. As chump correctly points out, anticipation is a different thing.

About number 4, I think these are excellent personality traits and I'm sure they'll come in handy. But as opposed to learning which theory is right and which is wrong, you might want to change the classic view taught throughout one's academic career. In the markets there are no certainties.

Last but not least, I'm sure you're aware that many professors and teachers often spread the efficient market hypothesis and many more books and journals talk about "how to make money on Wall Street". But in fact they do nothing more than propagate their views to an uncritical public, that likes nothing more than eating of these "stories". Slowly but fortunately, people are coming aware of the elements that causes people (and markets) sometimes to behave irrational. If you are interested in studying the psychological causes underneath these patterns of thinking and decision making you should go to the library and pick up a book on behavioural economics. It will teach you much more than your classic education has.

Or... you could try and listen to dbphoenix and chump.

 

[Silvertip]

Due to the fragmented nature of reality we experience at the human level of existence, it is inevitable that we will, at least initially, interpret external forms and the choice words of these forms as something other than ourselves until such time we transcend beyond mundane ignorance, which is ultimately our birth right, and it is this birth right that leads us to alternating viewpoints. Truly accurate thought is to embrace that which you are not, in an attempt to retrace the path to your original state. Whether this has any influence upon how successful a trader you can be is open to subjective discussion, and something that is in fact one of the very principles that influences the reasoning for our appearance in the here and now, within the parameters that define the form that we manifest, subjectivity. Some excellent contributions on this thread, its been a very interesting read.

 

[firewalker99]

You all talk of trading as it is something mystical, that takes years and years of live trading in order to become successful.

I say bulls**t.

I have mentioned what trading is really all about in my previous post, containing some simple steps that will allow one stay in the game long enough to understand what speculation really means.

Just because it takes some people years and years to learn , does in no way imply that it will take another person the same length of time.

In fact, I will take it one step further, and say that someone who has no trading experience whatsoever, has a far better chance of making consistent returns, if they are willing to commit to what must be done from the outset, not what they want to do, or think they want to do, based on the opinions of others.

The first step is realising the fact that one must start to think differently than the majority.

There are proven techniques available that will allow this to happen, and by adopting these techniques, one will then be able to learn How To Think Correctly.

It may take years for some, or months for others. And most will never succeed yes.
But if trading is really as simple as you're stating it CYOF why aren't you making more headway?

Just from an outsider's perspective to this thread, I can't really relate how all these definitions from the dictionary -no offense- would help me become a better trader or help me think correctly? If anything, people should be posting examples of logical fallacies to give examples of (in)correct thinking.

 

[firewalker99]

Absolutely - like any skill, some have more natural talent or aptitude than others.

Although I'm usually agreeing with you Charlton, I have to say this is a common misconception. I'll refrain to going in on the subject here, but if you're interested upon reading on "the talent myth" as I like to call it, have a look in the thread http://www.trade2win.com/boards/showthread.php?t=21843, post #175. Obviously some could have developed more aptitude than others, but that has nothing to do with so called "natural" talent.

Correct again - if the right mindset is there at the outset then someone who is a novice might well perform better than someone who has been performing the activity for some time without much success. Some as I said earlier seem to have a natural talent, which includes the right frame of mind. This does not preclude others from attaining it through hard work and experience, but for some it comes easier than for others.

The right frame of mind is not something you're born with. I agree it does come easier for some than for others, but the main reason for this is that they are shown are taught the right way from the start. Instead of having to wander around in the big dark woods without knowing which intersection leads us out of the forest. One thing I must admit, a novice might well do much better than someone who's been performing the same activity without success as he has a much more unbiased vision as he won't know what he will be looking for but be able to perceive what is, exactly as it is.

For the record: the last part of your post is excellent.

 

[SOCRATES]

Although I'm usually agreeing with you Charlton, I have to say this is a common misconception. I'll refrain to going in on the subject here, but if you're interested upon reading on "the talent myth" as I like to call it, have a look in the thread http://www.trade2win.com/boards/showthread.php?t=21843. Obviously some could have developed more aptitude than others, but that has nothing to do with so called "natural" talent.


The right frame of mind is not something you're born with. I agree it does come easier for some than for others, but the main reason for this is that they are shown are taught the right way from the start. Instead of having to wander around in the big dark woods without knowing which intersection leads us out of the forest. One thing I must admit, a novice might well do much better than someone who's been performing the same activity without success as he has a much more unbiased vision as he won't know what he will be looking for but be able to perceive what is, exactly as it is.

For the record: the last part of your post is excellent.

Yes it is, otherwise everyone would be the same... ....God Forbid....

 

[temptrader]

I am only interested in the handful of individuals who are at a level of proficiency far above these nuisances, who do not need to ask silly questions, who are not digging for information, who are not brain picking, who do not need to do any of that because they are above all of it.

At the mechanincal level there is this endless seething quest going on......

Above it there is calm.

At the mechanical level there is an instictive drive to share, to disseminate, to discuss, to dig, to argue, to enquire, to try to find out X Y or Z........

Above it there is no need for this as everything has been found.

At the mechanical level there is this collective drive in favour of sharing.....all sorts of arguments are presented in its favour....

At the mechanical level there is requirement for proofs, argument, rudeness, aggression, envy and all sorts of negative sentiments......

Above it there is cooperation, agreement , conscensus, and all below is viewed in quiet contemplation and with wry amusement.

Above it there is no sharing, only an informal mutual amiration society exists, without any pressures whatsoever, because there is no need.

These are different worlds, you see. It does not mean that because everyone is not priviledged to inhabit them and experience them, that they do not exist.

I am not interested in the former, I am interested only in the latter, and that is why my reply to your question is negative.

I really don't like you Socrates, but what you are talking about is also found amongst the top mathematicians (apart from certain priority disputes of course). And no, very few get to make it, because it's based on talent. Those that do make it have every right to be there. Those that don't just talk as if they can make it, and make lovely excuses like Firewalker99 about how anyone can do it with obvious work and passion etc. . . didn't you have a conversation once with Skimbleshanks about how some of the losing 95% think they are on the way to being part of the 5% :cheesy:

 

[Charlton]

Although I'm usually agreeing with you Charlton, I have to say this is a common misconception. I'll refrain to going in on the subject here, but if you're interested upon reading on "the talent myth" as I like to call it, have a look in the thread http://www.trade2win.com/boards/showthread.php?t=21843, post #175. Obviously some could have developed more aptitude than others, but that has nothing to do with so called "natural" talent.


The right frame of mind is not something you're born with. I agree it does come easier for some than for others, but the main reason for this is that they are shown are taught the right way from the start. Instead of having to wander around in the big dark woods without knowing which intersection leads us out of the forest. One thing I must admit, a novice might well do much better than someone who's been performing the same activity without success as he has a much more unbiased vision as he won't know what he will be looking for but be able to perceive what is, exactly as it is.

For the record: the last part of your post is excellent.

Firewalker

As the link is about 20 pages long I don't have time to do it justice now, but hope to return to it.

In a way I not really too concerned about whether these skills, appitudes or whatever are inherited or can be taught, although I realise why this might be perceived as an issue by some, because of the obvious implications.

I certainly agree with you that good training and, IMHO that includes self-training, is vital whether or not one believes in natural or developed talent.

Perhaps this is something we can explore in more depth after Christmas.

Charlton

 

[SOCRATES]

I really don't like you Socrates, but what you are talking about is also found amongst the top mathematicians (apart from certain priority disputes of course). And no, very few get to make it, because it's based on talent. Those that do make it have every right to be there. Those that don't just talk as if they can make it, and make lovely excuses like Firewalker99 about how anyone can do it with obvious work and passion etc. . . didn't you have a conversation once with Skimbleshanks about how some of the losing 95% think they are on the way to being part of the 5% :cheesy:

You say you don't like me....and again like a lot of posts on this website...that is totally irrational...:cheesy: ...because your only contact with me is via what you read that I ( restrict myself to) :cheesy: ...write and that is all....and irrationality and trading do not go well....is why I am telling you.

Actually Skim and I had a chat last night....we were on that very topic briefly...but it seems as if the odds are narrowing even further...to judge by the quality of content on this site of late....:cheesy:

 

[firewalker99]

Yes it is, otherwise everyone would be the same... ....God Forbid....

A) I am certain many will believe that they are [born with] the right mindset and that it has to be that way, otherwise their ego might suffer if they thought that others might achieve the same just by training and working towards that goal. Their "uniqueness" in itself would be damaged, as would their self-esteem.

B) In fact, we are more the same (at birth) than you would think, but that's a whole different topic.

C) Furthermore, our brain is more "moldable" than most can imagine. As research shows, you can shape your brain to almost anything you wish. No, intelligence is not a gift. No, being able to calculate 5 number multiplications is a uniquely talent.

D) Most important your deductive reasoning seems to be flawed, because A:"the right mindset is not something you're born" by no means leads to B "everyone must be the same".

 

[SOCRATES]

A) I am certain many will believe that they are [born with] the right mindset and that it has to be that way, otherwise their ego might suffer if they thought that others might achieve the same just by training and working towards that goal. Their "uniqueness" in itself would be damaged, as would their self-esteem.

B) In fact, we are more the same (at birth) than you would think, but that's a whole different topic.

C) Furthermore, our brain is more "moldable" than most can imagine. As research shows, you can shape your brain to almost anything you wish. No, intelligence is not a gift. No, being able to calculate 5 number multiplications is a uniquely talent.

D) Most important your deductive reasoning seems to be flawed, because A:"the right mindset is not something you're born" by no means leads to B "everyone must be the same".

But Firewalker, all of this is OBVIOUS....as Pod G says...."IT IS SCREAMING AT YOU !"....
now I do not understand why some can clock something at a glance....like a rat up a drainpie....that fast....whereas the others make a big labour out of it....and resort to all sorts of pointless laborious experiments....and need to rely on things that do not work and persist and persist....it is horrible...awful. There is a handful of us really morbidly fascinated with all this and what could possibly be the underlying reasons...we are yet to discover....and hopefully this thread can throw some light on this riddle that has puzzled us for ages....

 

[firewalker99]

I really don't like you Socrates, but what you are talking about is also found amongst the top mathematicians (apart from certain priority disputes of course). And no, very few get to make it, because it's based on talent. Those that do make it have every right to be there. Those that don't just talk as if they can make it, and make lovely excuses like Firewalker99 about how anyone can do it with obvious work and passion etc. . . didn't you have a conversation once with Skimbleshanks about how some of the losing 95% think they are on the way to being part of the 5% :cheesy:

I don't know Skimbleshanks all that well so I cannot judge that person. On the other hand I have read many of your posts and by that alone I can only conclude that you seem to be making the same mistakes most people make: reacting emotionally to a perfectly sane logical argument. Which obviously causes one to make mistakes in their reasoning. I don't know how many times I have to repeat this, but if you think that the few that make it, are born for it and have the talent, then that's fine by me. Call yourself lucky if you have that talent! It doesn't matter to me. I don't need to make excuses. And I certainly have better things to do than spend my time talking about what other people think they think they know.... I rather discuss a concept or an idea. But then again, isn't that the difference between a discussion and plain gossip?

 

[temptrader]

You say you don't like me....and again like a lot of posts on this website...that is totally irrational... ...because your only contact with me is via what you read that I ( restrict myself to) ...write and that is all....and irrationality and trading do not go well....is why I am telling you.

Actually Skim and I had a chat last night....we were on that very topic briefly...but it seems as if the odds are narrowing even further...to judge by the quality of content on this site of late....

you obviously didn't read between the lines. I was referring to your blunt statement of things, Schopahauer (if I've spelt his name correctly, excuse me I never did philosophy) had a few things to say on these issues

 

[SOCRATES]

I don't know Skimbleshanks all that well so I cannot judge that person. On the other hand I have read many of your posts and by that alone I can only conclude that you seem to be making the same mistakes most people make: reacting emotionally to a perfectly sane logical argument. Which obviously causes one to make mistakes in their reasoning. I don't know how many times I have to repeat this, but if you think that the few that make it, are born for it and have the talent, then that's fine by me. Call yourself lucky if you have that talent! It doesn't matter to me. I don't need to make excuses. And I certainly have better things to do than spend my time talking about what other people think they think they know.... I rather discuss a concept or an idea. But then again, isn't that the difference between a discussion and plain gossip?

Skimbleshanks is really really bright. She only needs to have a complex concept explained once and she grabs it and uses it. No messing. What is more she has total recall. An outstanding visual mathematician too....no longer posts...is "out of circulation" , prudent lady..will not share either so don't bother to PM her.

 

[darkwanderer]

Skimbleshanks is really really bright. She only needs to have a complex concept explained once and she grabs it and uses it. No messing. What is more she has total recall. An outstanding visual mathematician too....no longer posts...is "out of circulation" , prudent lady..will not share either so don't bother to PM her.

What happened to, Chartman? His charting and commentry on the Dow looked extremely helpful to beginners, unlike this thread.

 

[temptrader]

Skimbleshanks is really really bright. She only needs to have a complex concept explained once and she grabs it and uses it. No messing. What is more she has total recall. An outstanding visual mathematician too....no longer posts...is "out of circulation" , prudent lady..will not share either so don't bother to PM her.

I wouldn't dare try to PM her, had 2 replies from her ages ago, she gave me all I really wanted to know.

On the other hand I have read many of your posts and by that alone I can only conclude that you seem to be making the same mistakes most people make: reacting emotionally to a perfectly sane logical argument

reacting emotionally? don't think so, just like Socrates, you failed to read between the lines. If you are so sure of yourself, then why don't you try to be as great as a Newton, or an Einstein or a Planck, . . . and if you do this I will do the following:

1) I will sing your praises, and so will the rest of the human race

2) your name will be remembered for as long as the human race exists . . .

3) when you die certain men might not even shed a tear, to quote the doctor who attended to Ramanujan as he died: "his death was too deep for tears"

This is my last post, I'm off to get my professorship . . .

 

[SOCRATES]

I wouldn't dare try to PM her, had 2 replies from her ages ago, she gave me all I really wanted to know.



reacting emotionally? don't think so, just like Socrates, you failed to read between the lines. If you are so sure of yourself, then why don't you try to be as great as a Newton, or an Einstein or a Planck, . . . and if you do this I will do the following:

1) I will sing your praises, and so will the rest of the human race

2) your name will be remembered for as long as the human race exists . . .

3) when you die certain men might not even shed a tear, to quote the doctor who attended to Ramanujan as he died: "his death was too deep for tears"

This is my last post, I'm off to get my professorship . . .

Yes, Good Luck.

 

[barjon]

I am extremely sorry to all those members who have reported posts today without any action being taken. I was out and about I'm afraid and no-one else was around. Anyway I have done a mass cull which includes all the reported posts and those posts which responded to them and which do not make sense with them (the deleted posts) absent.

good trading

jon

ps: ....and now i've done some housekeeping and removed offensive posts (and the responses) all the way back to where i asked that the custard pie throwing should stop.