StockFetcher Forums · General Discussion · NEVER LOSE AGAIN!!<< 1 ... 66 67 68 69 70 ... 102 >>Post Follow-up
TheRumpledOne
6,358 posts
msg #78717
Ignore TheRumpledOne
modified
9/6/2009 9:06:51 AM

Choose Your Advice Carefully

Since your mind is your most valuable asset and your most valuable lever, you need to be careful what you put in it. Sometimes it is even more difficult to get rid of thoughts and ideas that are already in your mind than it is to learn something new - Pg 119 WHY WE WANT YOU TO BE RICH


F - Follow
O - One
C - Course
U - Until
S - Successful

- Pg 110 WHY WE WANT YOU TO BE RICH

If the rat is beating you, you are the reason why.

TheRumpledOne
6,358 posts
msg #78724
Ignore TheRumpledOne
9/6/2009 1:37:44 PM

Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)


You can not control the probabilities of wining or losing.


You can not control your average win size.


The only part of the equation that you can control is your average loss size.

TheRumpledOne
6,358 posts
msg #78851
Ignore TheRumpledOne
modified
9/9/2009 7:17:42 AM

THE ILLUSION OF CONTROL

"Individuals appear hard-wired to overattribute success to skill, and to underestimate the role of chance, when both are in fact present."

[Langer, E. J., The Illusion of Control, Journal of Personality and
Social Psychology 32 (2), 311-328 (1975)]

FINANCIAL MANAGEMENT


"After a full cycle of rise and fall after which stocks were valued just where they were at the start, all his clients lost money (Don Guyon, 1909).

Many academic works suggest that most managers underperform "buy-and-hold" strategy; persistence of winners is very rare, etc.

Most funds consistently fail to overperform random strategies (dart throwing)."


OVER-OPTIMIZATION

Rats beat humans in simple games

People makes STORIES!

"Normal people have an "interpreter" in their left brain that takes all the random, contradictory details of whatever they are doing or remembering at the moment, and smoothes everything in one coherent story. If there are details that do not fit, they are edited out or revised!"

(T. Grandin and C. Johnson, Animals in translation (Scribner,
New York, 2005)


http://www.er.ethz.ch/presentations/Illusion_of_control_Zurich_CCSS-conf19Aug08.pdf

..........................


The rat will beat you if you do not understand this.

TheRumpledOne
6,358 posts
msg #78888
Ignore TheRumpledOne
modified
9/9/2009 5:01:37 PM

How to Smell a Rat: The Five Signs of Financial Fraud (Fisher Investments Press) by Ken Fisher & Lara W. Hoffmans


Image and video hosting by TinyPic

TheRumpledOne
6,358 posts
msg #78978
Ignore TheRumpledOne
9/10/2009 6:52:46 PM

http://www.tradingmarkets.com/.site/forex/how_to/articles/The-4-staples-of-Interpreting-Price-Action-77799.cfm

TheRumpledOne
6,358 posts
msg #78979
Ignore TheRumpledOne
9/10/2009 6:55:33 PM

Learn, Unlearn, and Relearn By: Marcia Conner

The secret to learning new things is to be willing to unlearn--even if your behaviors previously brought success.

http://www.fastcompany.com/resources/learning/conner/022706.html

JCastellon
26 posts
msg #79106
Ignore JCastellon
9/12/2009 2:29:45 AM

what are some good BUYZONE stocks?

TheRumpledOne
6,358 posts
msg #79120
Ignore TheRumpledOne
9/12/2009 1:34:16 PM

http://www.fx360.com/commentary/brad/1920/trading-psychology-recency-bias.aspx

TheRumpledOne
6,358 posts
msg #79121
Ignore TheRumpledOne
9/12/2009 1:34:38 PM

what are some good BUYZONE stocks?

AAPL

RIMM



TheRumpledOne
6,358 posts
msg #79126
Ignore TheRumpledOne
modified
9/12/2009 4:44:35 PM

Rats beat Yalies: Doing better by getting less information?

Louis Menand's review of Philip Tetlock’s book “Expert Political Judgment" makes the point that in "more than a hundred studies that have pitted experts against statistical or actuarial formulas, ... the people either do no better than the formulas or do worse". Menand suggests that the experts' downfall "is exactly the trouble that all human beings have: we fall in love with our hunches, and we really, really hate to be wrong". Tetlock puts it like this (p. 40): "the refusal to accept the inevitability of error -- to acknowledge that some phenomena are irreducibly probabilistic -- can be harmful. Political observers ... look for patterns in random concatenations of events. They would do better by thinking less."

Tetlock suggests that humans perform worse in this experiment because we have a higher-order, more abstract intelligence than rats do: "Human performance suffers [relative to the rat] because we are, deep down, deterministic thinkers with an aversion to probabilistic strategies... We insist on looking for order in random sequences." Menand, on the other hand, thinks it's just vanity:

The students looked for patterns of left-right placement, and ended up scoring only fifty-two per cent, an F. The rat, having no reputation to begin with, was not embarrassed about being wrong two out of every five tries. But Yale students, who do have reputations, searched for a hidden order in the sequence. They couldn’t deal with forty-per-cent error, so they ended up with almost fifty-per-cent error.

But why does more information make for worse performance? We're used to seeing evolution develop optimal solutions to such basic problems as choosing where to look for food. So what's gone wrong here? If animals have accurate estimates of how much food is likely to be where -- however those estimates are learned -- then the rule of "[proportioning] their choices in accord with the relative expected rates" is the students' solution, not the rat's solution. The rule says to allocate your foraging time among the alternative locations in proportion to your estimate of the likely pay-off. That's what the students did. But the maximum-likelihood solution is to put all your chips on the option with the highest expected return -- what the rat did.

http://itre.cis.upenn.edu/~myl/languagelog/archives/002700.html

===================================================


The question is how many traders reading this are TOO STUBBORN to apply this new information? I would wager more traders will cling to their "squiggly lines" than admit the rat will beat them and trade like a rat.

StockFetcher Forums · General Discussion · NEVER LOSE AGAIN!!<< 1 ... 66 67 68 69 70 ... 102 >>Post Follow-up

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