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Trading Psychology, Primal urges & embedded mentality in price action
mrbear
post Posted: Jul 1 2018, 02:43 PM
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In Reply To: triage's post @ Jul 1 2018, 08:19 AM

Hi triage,any fool wins with hindsight,only the ones who post before the event and regularly win are worth any salt.

How much tax you have to pay at the end of each year dictates how well you do graduated.gif ,cheers mrbear





Said 'Thanks' for this post: triage  
 
joules mm1
post Posted: Jul 1 2018, 12:23 PM
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In Reply To: triage's post @ Jul 1 2018, 08:19 AM

in the immortal words of one futures trader "mate, ya just doin it wrong, nothing to do with confidence!"
suggested reading from Nick Radge might help www.thechartist.com.au
think less on the ultimate 'investment' and think more on application, process, technique
competence is itself a hindsight conclusion after the input of application. process and technique
so if those are lacking you appear to lack competence but really you lack the right plan
competence is not a reflection of self it is a reflection of knowledge extent and the practise of that knowledge
all traders take losses the only question is how well you manage risk
if you were to break down the parts that frame competence you'll find the same steps are required to form the idea of having

competence....



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. . . . . . . . everything has an art.....in the instance of the auction process, the only thing, needed to be listened to; price

Said 'Thanks' for this post: triage  
 
triage
post Posted: Jul 1 2018, 08:19 AM
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I often find reading hotcopper threads quite deflating: so much absolute knowledge, such unbridled confidence, so many investors who manage to jump from stock to stock to stock with perfect timing who in hindsight claim perfect foresight. Even though I know there is a selection bias and a massive bullshit bias to all those who, like Mr Trump, must get sick of winning all the time I come away being less confident of my own attempts at managing my investment assets. sadsmiley02.gif sadsmiley02.gif

In fact one of the few things that gives me any confidence is that my lack of confidence suggests I am not deluding myself.

As David Dunning of the Dunning Kruger Effect theory says:

What’s curious is that, in many cases, incompetence does not leave people disoriented, perplexed, or cautious. Instead, the incompetent are often blessed with an inappropriate confidence, buoyed by something that feels to them like knowledge.

https://kottke.org/18/06/the-dunning-kruger...onfident-idiots


So for fleeting moments I take comfort that I am not blind to my investing incompetence like some of the hc fools ... only to come back to the brick-wall realisation that simply knowing I am incompetent does not alter the fact that I am most of the time quite incompetent. Ah well, maybe I'll strike it lucky instead. Anyway, all the best to the ss community in the forthcoming financial year. wink.gif




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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

Said 'Thanks' for this post: henrietta  tombeet  
 
triage
post Posted: Aug 26 2012, 09:58 AM
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Some observations about markets and trading psychology from George Soros.

He has copped heaps of ridicule from the likes of The Economist magazine for his reflexivity ideas but whilst the theory may not be robust enough to stand up to academic scrutiny it is good enough to see him through what has been a very long and successful career as an investor ...

...(though of course it could all be a total crock and he has just been one of the lucky ones [even his son admits that in a crunch Soros tends to rely on whether his chronic back pain is worse or better rather than on all his highferlutin theories]).

I particularly like this snippet:

QUOTE
Financial markets constantly anticipate events, both on the positive and on the negative side, which fail to materialise exactly because they have been anticipated.


To me it gives an explanation of why the eurozone keeps managing to do just enough to step around a series of critical junctures that so many pundits were predicting as being the unavoidable last straw eg Spain defaulting when the long term bond rate broke through the 7% barrier. In the end it may well be something entirely unexpected or dismissed as unimportant that could trigger the onset of the final stage of crisis there (?) precisely because it was not anticipated by the markets and authorities (??).

http://ivanhoff.com/2012/08/23/a-look-at-9...m-george-soros/



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

Said 'Thanks' for this post: arty  
 
jwlkr
post Posted: Apr 4 2011, 11:42 PM
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Some more personal observations...

The context fallacy -

In Jan 2010, ASX:ELD shares increased by a factor of 10. Early last month, CSR shares went from 1.74ish to 3.23ish. Has anyone else ever confused consolidation with actual gains?

Just before a company goes into compulsory liquidation, it will tend to hit rock bottom before making a false resurgence. Don't buy into the resurgence. FEA, WFL, BrisConnect.

Unprecedented higher highs is also a difficult time. Greed may be good for some but it makes me high, unreasonable and stupider than usual. In time, I am slowly becoming familiar with the notion of studying the contracts and agreements in place which underline those rises. If it is speculation of the possible, I bail. If it is expectation of the probable, I usually sell half. The 80:20 rule comes in handy. The drawdown also depends on the availability of alternative investment opportunities. These days, I tend to have a preemptive shortlist of potential alternatives on hand just in case I need to lower my exposure in a particular stock.

CAPM and portfolio theory rules the day. Capital management and asset allocation > TA, charting, stock selection. Mind you, I'm not bashing TA. I have great respect for some of the affluent posters - arty, mistagear, EB, hungry, danville and rosella the div trader. I'm just a lousy punter. Can't pick a winner even if it's staring straight at me down an alley. Strategic diversification allows me to have cake and eat some of it too.

Final thought:
I have learnt to never stray too far from the asx200. This means less than 20% is in the 200-400 range. There should be compelling reason to invest in a penny dreadful. That said, ISF went up 188% today. I made my annual salary in a single day. That said, the risk borne probably wasn't worth it. In hindsight, I broke some fundamental rules to make the punt. It definitely won't happen in future; luck and recklessness is a toxic combination. Have preset rules - customised to suit your personal style - and stick with them.

I'm posting these thoughts more for my own benefit than others as it clears my head helps me put things in perspective.

Safe trading all. Priority #1 is to stay in the game.


Said 'Thanks' for this post: Varmi  seeker4it  
 
wolverine
post Posted: Apr 1 2011, 08:59 PM
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In Reply To: mrbear's post @ Apr 1 2011, 08:46 PM

Talent

laugh.gif laugh.gif



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TOO MANY CHIEFS

NOT ENOUGH INDIANS
 


mrbear
post Posted: Apr 1 2011, 08:46 PM
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In Reply To: wolverine's post @ Apr 1 2011, 07:18 PM

Do you hold the silver light screen or the ky duty wolver,cheers mrbear laugh.gif wink.gif

 
mpl
post Posted: Apr 1 2011, 07:21 PM
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In Reply To: wolverine's post @ Apr 1 2011, 07:18 PM

LOL biggrin.gif graduated.gif blink.gif .

Good one Wolvie



 
wolverine
post Posted: Apr 1 2011, 07:18 PM
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In Reply To: mrbear's post @ Apr 1 2011, 09:26 AM

I trade/invest as it takes my mind off the mundane life at work, day in day out, always the same, always stressed and under pressure to perform.

I am sick of working in the adult film industry.



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TOO MANY CHIEFS

NOT ENOUGH INDIANS
 
nebo
post Posted: Apr 1 2011, 06:14 PM
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In Reply To: mrbear's post @ Apr 1 2011, 09:26 AM

i trade to fulfill my urge to "do something".
Especially now I have sold the bricks and mortar business.
My father was a gambler and deep down i believe i probably am.
But i trade no more than 10% of my holdings.
That is my business brain, which wont allow me to trade away to nothing as he did. hehe
I have always kept my winnings as a share pile rather than cash which i would have traded away.
Not much of a plan, but is my personal observation and why i dont day trade but still watch the market.
So i trade shares i like that give me income (mostly).
And scalp any extras along the way while hopefully not degrading the pile too much.
We all have different demons and trading satisfies different things in all of us.
Happy Trading to all wink.gif
Nebo

 
 


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