Article Your Brain Wasn’t Built to Handle Reality

T2W Bot

Staff member
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Republicans — to be precise, 74 percent, according to a CBS News poll — think it’s very or somewhat likely Donald Trump’s offices were wiretapped, even though the White House has offered no evidence to back up the president’s claim that his predecessor ordered the monitoring.
I just love data points like this. They say so much about humans as a species — how we process information, our inability to look dispassionately at a situation, the ever-present cognitive errors, even the challenges of reaching a simple, rational conclusion based on evidence.
There are lessons here for investors who want to better understand how their own minds operate, and how they can manage their own behavior. Each of these bullet points applies equally to the survey respondents cited above and to almost all investors:
No. 1: We seek information to reinforce our beliefs. As investors, we suffer from the endowment effect: We place a higher value on holdings we already own. Hey, if we bought it, then...
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foroom lluzers

Veteren member
3,611 135
The Article is informing where traders can mess up with information processing ,traders must trade by processing information. Unfortunately, humans are not very effective information processors. We have a lot of influences that enter into information processing related to trading decisions.Traders who sit infront of screens are more at risk to misprocessing information.

Traders trade their beliefs ,cognitive biases and related distortions ,emotions ,stress responses (rective patterns ,freezing on trigger ,mistakes etc),subjective anylysis ,personality( Perfectionism ,Worry ,Overconfidence,
Negative Thinking.Self-blame etc),state of mind ,current body condition (tired ,fatigue,sleepless) and other influences .The trading phsychology is a complex subject ,the author has given a summary.

It is worth reading this article and applying it to a trading method.The above makes the human brain a poor judge of risk ,the brain is often not in reality with risk and trading is a risky business.The evidence of the truth in this article is ,there are over 3,000 free systems on the internet , more than 95% fail at trading because of the above phsychological handicap of the human mind.

Go back to the article , reread it many times , then compare it with real trading situations ,apply it to traders processiong information in extremely fast moving markets .
 
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sigmund1

Active member
156 19
we have no idea how stupid we are

“We're blind to our blindness...We have very little idea of how little we know...We're not designed to know how little we know.”...

Daniel Kahneman... Nobel Prize Winner and author...The Intelligent Investor.
 
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foroom lluzers

Veteren member
3,611 135
This is a great article for traders , there are studies to confirm the validity of the orignal article.

UCLA neurophysicists have found that space-mapping neurons in the brain react differently to virtual reality than they do to real-world environments. Their findings could be significant for people who use virtual reality for gaming, military, commercial, scientific or other purposes.

“The pattern of activity in a brain region involved in spatial learning in the virtual world is completely different than when it processes activity in the real world,” “The neural pattern in virtual reality is substantially different from the activity pattern in the real world. We need to fully understand how virtual reality affects the brain.”

To read whole article search on google for "Brain’s reaction new research by UCLA neuroscientists"
 

foroom lluzers

Veteren member
3,611 135
Just search on google with the following words "blind spot in the eye emotions cognitive biases hippocampus shutdown " .

https://www.google.co.uk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=blind+spot+in+the+eye+emotions+cognitive+biases+hippocampus+shutdown

Screen watching traders often trade their cognitive biases , put on trades based on their biases , instead of following their systems.

This adds to a negative edge for scalpers ,days traders and short tem traders.They find it difficult to
process day trading information.The swing traders can avoid this negative edge

https://www.google.co.uk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=success+rate+of+day+traders

Search on google for" success rate of day traders".
 

piphoe

Legendary member
10,038 194
"Daytrading", "Swingtrading" "Scalping" these are all arbitrary terms with arbitrary timeframes. Means NOTHING and only common denominator is "trading" with time.

One other thing larger timeframe bigger loss when you wrong.
 

itspossible

Senior member
2,778 557
"Daytrading", "Swingtrading" "Scalping" these are all arbitrary terms with arbitrary timeframes. Means NOTHING and only common denominator is "trading" with time.

One other thing larger timeframe bigger loss when you wrong.
 

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