Trading: Art or Science?

[Trembling Hand]

I'm saying, once your skill has reached its ceiling, it's better to focus on attitude.

LOL.

Go have a look at Ericsson work. Please!!

 

[Trembling Hand]

TREMBLING have you found Anders Ericsson helpful for your trading ?

Its stopped me from wasting time on psychology/attitude/positive thinking.

 

[motorway]

A positive attitude tends to come from being able to do things well and doing them well.

Same as Self Esteem (It is the fruit )

It is doing that is the secret key that unlocks the way to many things.

Making oneself available to feedback and being honest puts one on the growth spiral.

On trading... A Craft requires the development of JUDGEMENT ( A fruit of experience )



Motorway

 

[Gringotts Bank]

LOL.

Go have a look at Ericsson work. Please!!

Best I can find online at the moment is some Amazon reviews of his 'Road to Excellence' book.

Until I can get a proper look at that, perhaps you could help by summarizing how one could apply his theories to trading. That would be helpful to everyone, I'd think.

edit: found this http://www.psy.fsu.edu/faculty/ericsson/ericsson.exp.perf.html, but I'd still like to hear your particular way of applying it to trading.

 

[Trembling Hand]

Best I can find online at the moment is some Amazon reviews of his 'Road to Excellence' book.

Until I can get a proper look at that, perhaps you could help by summarizing how one could apply his theories to trading. That would be helpful to everyone, I'd think.

Already been done,

What Makes an Expert?

A research summary from K. Anders Ericsson, a leading researcher in the field, offers three surprising conclusions:

1) "Measures of general basic capacities do not predict success in a domain" - Experts cannot be distinguished by their superior intellects or other cognitive talents. This suggests that, while certain inborn traits and lack of capacities might prevent the development of trading expertise, the presence of particular native talents cannot ensure success.

2) "The superior performance of experts is often very domain specific and transfer outside their narrow area of expertise is surprisingly limited" - Being an expert in one domain does not predict expertise in others; a person can be a highly accomplished trader, but not expert in other areas. Moreover, a person can be an expert scalper or portfolio manager and yet fail at other forms of trading. This is the notion of "niche" that I describe in my book: the successful trader has found a particular sphere of success that expresses his or her skills and interests.

3) "Systematic differences between experts and less proficient individuals nearly always reflect attributes acquired by the experts during their lengthy training"- A saying among expertise researchers is that practice does not make perfect; perfect practice makes perfect. The expert is one who has undergone a structured, deliberate process of training that builds competencies, offers extensive feedback, and draws upon intensive effort over time to internalize knowledge and skills.

What does this mean for traders? Here are three conclusions of my own:

1) The majority of traders are looking for expertise in all the wrong places. They look for *the* right trading charts, indicators, setups, or systems. They are like beginning golfers who think they'll succeed if they only get the right set of clubs. Because they hope to get "the answer", they expect success in a year or two. The research is unequivocal: expertise develops over a period of many years. If those years are not structured properly, traders will repeat a single year's experience ten times; they won't acquire ten years of experience.

2) The vast majority of offerings in trader education are not structured for expertise development. Seminars, books, Web articles and blogs, weekend courses--all can be useful in imparting information. But expertise development is not simply about the accumulation of information; it is about skill development under realistic, challenging conditions. No doctor, athlete, or musician could acquire expertise by attending seminars or reading books alone. The same is true for traders.

3) The reason most traders fail is that they never enter a path of expertise development. It is rare to find training programs of any quality and substance at proprietary trading firms; one finds mentorship at investment banks and some hedge funds, but this is very hit or miss depending upon the commitment of the mentor and his/her skill in imparting skills and structuring a learning process. The independent trader has even fewer resources to generate and sustain an accelerated learning curve. There is much more to acquiring expertise than keeping a journal and trying to follow a simple plan.

 

[Joules MM1]

partial to this one

http://en.wikipedia.org/wiki/Dunning–Kruger_effect

Kruger and Dunning noted earlier studies suggesting that ignorance of standards of performance is behind a great deal of incompetence. This pattern was seen in studies of skills as diverse as......

...for a given skill, incompetent people will:
1 tend to overestimate their own level of skill;
2 fail to recognize genuine skill in others;
3 fail to recognize the extremity of their inadequacy;
4 recognize and acknowledge their own previous lack of skill, if they can be trained to substantially improve.

 

[5oclock]

TREMBLING, thanks for that great post, Anders will be worth a read judging from your experience.I see he has wrtten a number of books ,was any particular one a standout for you? By the way I hope you are fully recovered from the knife.

 

[Trembling Hand]

Anders will be worth a read judging from your experience.I see he has wrtten a number of books ,was any particular one a standout for you?

Its all very heavy stuff. I would actually say a better read would be to start with this,
http://www.amazon.com/Enhancing-Trader-Performance-Strategies-Psychology/dp/0470038667

Then see if Anders stuff is of interest.

By the way I hope you are fully recovered from the knife.

Think so but will find out how the ticker is on Saturday after my first race since the surgery. 5K time trial. :horse:

 

[Gringotts Bank]

Its all very heavy stuff. I would actually say a better read would be to start with this,
http://www.amazon.com/Enhancing-Trader-Performance-Strategies-Psychology/dp/0470038667

A quote from that book, which is about trading psychology, and written by a psychiatrist.

"You cannot have trading consistency if you do not have emotional consistency".

Why do you rubbish what I say and then re-package it?

 

[Trembling Hand]

A quote from that book, which is about trading psychology

"You cannot have trading consistency if you do not have emotional consistency".

Why do you rubbish what I say and then re-package it?

Because you are miss-quoting the whole book. have you read it? The book is based on skill development.

 

[skc]

A quote from that book, which is about trading psychology, and written by a psychiatrist.

"You cannot have trading consistency if you do not have emotional consistency".

Why do you rubbish what I say and then re-package it?

GB, remember what is necessary vs what is sufficient.

What you quoted said "You cannot have trading consistency if you do not have emotional consistency". It doesn't say that "With emotional consistency you can achieve trading consistency".

 

[Joules MM1]

Brett Steenbarger is a practising trader, too.....he's got a very strong plan ......i think he's currently training traders at Market Tells.....

for newcomers better to read his blog to begin before purchasing his books.....actually, with guidance, you could collate a serious part of your education from his site alone.....

http://traderfeed.blogspot.com.au/

 

[5oclock]

TREMBLING, have not read Brett Steenbarger "Enhancing Trader Performance"yet but have read many good posts on his TradeFeeder.Blogspot . Good luck on saturday.

 

[CanOz]

Brett Steenbarger is a practising trader, too.....he's got a very strong plan ......i think he's currently training traders at Market Tells.....

I think he's into SMB Capital as well, another Prop Firm.

CanOz

 

[Joules MM1]

...doesn't say that "With emotional consistency you can achieve trading consistency".

amen
+1

 

[Joules MM1]

amongst todays twitter fluff came this

The Kirk Report ‏ @TheKirkReport

$$ Trading is not difficult to learn if you have a good teacher and you are willing to put in the work (Dr. Keppler)

http://goo.gl/4gby5

It is important for every trader to understand that there really is no valid correlation between the cost of a trading education and the quality of the education that is received.....In selecting your educational program, focus on identifying the teacher. You must identify the actual person that will impart the knowledge to you.

 

[ceasar73]

Discretionary --- ART
Systems ---- SCIENCE.

Extreme positve results --- LUCK
Poor results ----- None of the above.

Extreme positve results --- LUCK....ha ha, so true.

 

[Garpal Gumnut]

I have read this book by Daniel Kahneman and it makes much sense.

As discussed in this thread, Art in trading may be intuitive or System 1 thinking, and Science may be System 2 or conscious slower thinking.

Daniel has previously written on heuristics and behavioural psychology, with a now deceased colleague Tversky.

Buy this book, it is a good read.

http://www.businessweek.com/magazin...ast-and-slow-by-daniel-kahneman-10272011.html

gg

 

[Timmy]

I have read this book by Daniel Kahneman and it makes much sense.

...
Buy this book, it is a good read.

http://www.businessweek.com/magazin...ast-and-slow-by-daniel-kahneman-10272011.html

gg

Agree GG - highly recommended

 

[Gringotts Bank]

Agree GG - highly recommended

+1. A good accompaniment to Gladwell's 'Blink'.