A series of trends in a chart shape -- often regular polygons -- emphasizes some over others, in order to create rays relevant later in price action. Ellipses are especially clear about this, showing a series of ever-increasingly important trends.
This finding led me to read the chart much more clearly, if still at a halting and slow speed for my brain to get used to ; )
So, I must exercise my brain each trading session to reliably discern which trends to project rays from, as well as innovate basic screens such as polygons to surround and highlight them.
What I've come up with recently is this:
.....
(fan / trend centerlines,ls2/slant,select(the above description)) - lp3 - combo
The push toward creativity producing the correct-enough chart
means that I have to add interpretive filters, subtract interruptive distractions, and monitor common errors
when I trade.
The last, I make an attempt below:
(NOTE I understand there are more-recent developments in the science of behavioral finance, ones that carefully describe various brain parts to make their point. I still don't trust their overview of the field, though, for the same reason.)
cognitive errors, from investopedia here--
anchoring:
"Successful investors don't just base their decisions on one or two benchmarks, they evaluate each company from a variety of perspectives in order to derive the truest picture of the investment landscape."
mental accounting ("the tendency for people to separate their money into separate accounts based on a variety of subjective criteria, like the source of the money and intent for each account"):
"money is fungible; regardless of its origins or intended use, all money is the same."
confirmation bias ("first impression can be hard to shake because people also tend to selectively filter and pay more attention to information that supports their opinions, while ignoring or rationalizing the rest. This type of selective thinking"):
Signal strength plays into here. "Confirmation bias represents a tendency for us to focus on information that confirms some pre-existing thought. Part of the problem with confirmation bias is that being aware of it isn't good enough to prevent you from doing it. One solution to overcoming this bias would be finding someone to act as a "dissenting voice of reason". That way you'll be confronted with a contrary viewpoint to examine."
hindsight bias(" a person believes (after the fact) that the onset of some past event was predictable and completely obvious, whereas in fact, the event could not have been reasonably predicted"):
incorrect oversimplifications.... signs of the ...bubble... had been obvious ....is a cause for ...overconfidence....unfounded belief that they possess superior stock-picking abilities."
gambler's fallacy ("an individual erroneously believes that the onset of a certain random event is less likely to happen following an event or a series of events. This line of thinking is incorrect because past events do not change the probability that certain events will occur in the future."):
Given the same individuals trade over and over again on each others' responses, for trading in the same direction when entering or exiting a trade and so producing a direction to trade into when the market later responds to said trades, the conjunctive chart areas doing this decide, between multiple time frames, very much from its division of history the likelihood of events. Tapping into this, however, is at best an extreme challenge.
The articles say this -- "in the case of independent events, the odds of any specific outcome happening on the next chance remains the same regardless of what preceded it."
herd behavior, or any simplistic group-based view("the tendency for individuals to mimic the actions (rational or irrational) of a larger group. Individually, however, most people would not necessarily make the same choice.
The first is the social pressure of conformity. You probably know from experience that this can be a powerful force. This is because most people are very sociable and have a natural desire to be accepted by a group, rather than be branded as an outcast. Therefore, following the group is an ideal way of becoming a member.
The second reason is the common rationale that it's unlikely that such a large group could be wrong. After all, even if you are convinced that a particular idea or course or action is irrational or incorrect, you might still follow the herd, believing they know something that you don't. This is especially prevalent in situations in which an individual has very little experience."):
"an investor is generally better off steering clear of the herd. Just because everyone is jumping on a certain investment "bandwagon" doesn't necessarily mean the strategy is correct. Therefore, the soundest advice is to always do your homework before following any trend.
Just remember that particular investments favored by the herd can easily become overvalued because the investment's high values are usually based on optimism and not on the underlying fundamentals."
overconfidence ("Confidence implies realistically trusting in one's abilities, while overconfidence usually implies an overly optimistic assessment of one's knowledge or control over a situation."):
also -- "overconfident investors generally conduct more trades than their less-confident counterparts.
Odean found that overconfident investors/traders tend to believe they are better than others at choosing the best stocks and best times to enter/exit a position. Unfortunately, Odean also found that traders that conducted the most trades tended, on average, to receive significantly lower yields than the market....
The best fund managers know that each investment day presents a new set of challenges and that investment techniques constantly need refining. Just about every overconfident investor is only a trade away from a very humbling wake-up call."
Overreaction,Availability Bias:
"retain a sense of perspective. While it's easy to get caught up in the latest news, short-term approaches don't usually yield the best investment results. If you do a thorough job of researching your investments, you'll better understand the true significance of recent news and will be able to act accordingly. Remember to focus on the long-term picture."
prospect theory("people value gains and losses differently, and, as such, will base decisions on perceived gains rather than perceived losses. Thus, if a person were given two equal choices, one expressed in terms of possible gains and the other in possible losses, people would choose the former - even when they achieve the same economic end result.
According to prospect theory, losses have more emotional impact than an equivalent amount of gains."):
"minimize the disposition effect by using a concept called hedonic framing to change your mental approach.
For example, in situations where you have a choice of thinking of something as one large gain or as a number of smaller gains (such as finding $100 versus finding a $50 bill from two places), thinking of the latter can maximize the amount of positive utility.
For situations where you have a choice of thinking of something as one large loss or as a number of smaller losses (losing $100 versus losing $50 twice), framing the situation as one large loss would create less negative utility because the marginal difference between the amount of pain from combining the losses would be less than the total amount of pain from many smaller losses. "
The article's summary --
"The concept of anchoring draws upon the tendency for us to attach or "anchor" our thoughts around a reference point despite the fact that it may not have any logical relevance to the decision at hand.
Mental accounting refers to the tendency for people to divide their money into separate accounts based on criteria like the source and intent for the money. Furthermore, the importance of the funds in each account also varies depending upon the money's source and intent.
Seeing is not necessarily believing as we also have confirmation and hindsight biases. Confirmation bias refers to how people tend to be more attentive towards new information that confirms their own preconceived options about a subject. The hindsight bias represents how people believe that after the fact, the occurrence of an event was completely obvious.
The gambler's fallacy refers to an incorrect interpretation of statistics where someone believes that the occurrence of a random independent event would somehow cause another random independent event less likely to happen.
Herd behavior represents the preference for individuals to mimic the behaviors or actions of a larger sized group.
Overconfidence represents the tendency for an investor to overestimate his or her ability in performing some action/task.
Overreaction occurs when one reacts to a piece of news in a way that is greater than actual impact of the news.
Prospect theory refers to an idea created by Drs. Kahneman and Tversky that essentially determined that people do not encode equal levels of joy and pain to the same effect. The average individuals tend to be more loss sensitive (in the sense that a he/she will feel more pain in receiving a loss compared to the amount of joy felt from receiving an equal amount of gain)."
-- my take on the above:
r.l. addresses overreaction, matching the pattern of news from its most-common and initial-premise news and fundamentals.
overconfidence, I still struggle with, often in a contrary way by margin-calling (in simulator) and then maybe rewriting my plan with the ensuing brain spike.
herd behavior is often the counter-balance to overconfidence.
gambler's fallacy -- I also seem to switch between the overconfidence / herd behavior attitude and the "best fund managers' " attitude, taking on the chart as a constant challenge; now, though, I understand a constructive, limited-means is all that one needs to interpret the chart correctly, however subtle the micro-trend projecting the correct ray and dramatic the multiple time frame's size is to most-easily figure its existence.
hindsight -- Good for rewriting a t.a. method. Push the learning to before the trade, and you got it.
confirmation -- Locking in on one line or another is still common for me, and adaptability and willingness to drop or reinterpret the rank of a line still too rare an occurrence. I think I lock in on one line because there's some point of reason I want to use in or derive from it, which is beneficial to a better method and poor toward better trading.
mental accounting -- not sure why this exists here, since I only trade all of money each trade.
anchoring -- see confirmation.
-- a summary of my take:
mental accounting, I'll look for.
charting is mostly found items in forex when doing price/time without news/fundamentals or sessions or volume or multiple symbols or, often, multiple time frames. I'm okay with the last one, nay, any of them, it's just that one is tough enough. I believe that mental accounting for differences and hindsight/confirmation bias for the highlights are why I choose this.
herd behavior / overconfidence / prospect theory each overweight one's decision to force a lead into a final answer and to leverage a lead into an improved method.
-- again:
Y under-borrowing/over-hoarding/sensitivity-avoidance for confidence
X differentiating the same or same-ing the different object(s) for group
equals a losing exchange
again:
testing a chart reason for how effective current thinking ability is --
X group diff action same results, same action diff results
Y confidence under-borrowing / overhaording / sensitivity - avoidance
XY exchange losing
-- okay, that's usable. Tack on the typify angle selection list, and I'm done for this round.
No, off-chart study is good too. How about, scenario+ with some gut version mid-action/objects.
typical shapes to begin angle selection --
(fan / trend centerlines,ls2/slant,select(the above description)) - lp3 - combo
testing a chart reason for how effective current thinking ability is --
X group diff action same results, same action diff results
Y confidence under-borrowing / overhaording / sensitivity - avoidance
XY exchange losing
off-chart study --
scenario+ with some gut version mid-action/objects.
another p1:
typical shapes to begin angle selection --
(fan / trend centerlines,ls2/slant,select(the above description)) - lp3 - combo
testing a chart reason for how effective current thinking ability is --
X group diff action same results, same action diff results
Y confidence under-borrowing / overhaording / sensitivity - avoidance
XY exchange losing
stimulus-response training --
scenario+ with some gut version mid-action/objects.
scenario+
two parallel lines -- addict
one line w/dots -- encounter
cycle -- level
line crossed -- exchange
dot with parallel curves from it -- immersion
some gut-version --- displace-draw, copy - entire-body / gut, project - talk / emote
-------------
http://www.forexfactory.com/showthre...44#post6136244
"Can't say I'm a huge fan of broke rs who are regulated by CySEC in Cyprus.
I don't have any direct experience with Exness myself, so I'm not putting them down, but in general I stick to IIROC, FSA, Swiss, or ASIC regulated shops."
This finding led me to read the chart much more clearly, if still at a halting and slow speed for my brain to get used to ; )
So, I must exercise my brain each trading session to reliably discern which trends to project rays from, as well as innovate basic screens such as polygons to surround and highlight them.
What I've come up with recently is this:
.....
(fan / trend centerlines,ls2/slant,select(the above description)) - lp3 - combo
The push toward creativity producing the correct-enough chart
means that I have to add interpretive filters, subtract interruptive distractions, and monitor common errors
when I trade.
The last, I make an attempt below:
(NOTE I understand there are more-recent developments in the science of behavioral finance, ones that carefully describe various brain parts to make their point. I still don't trust their overview of the field, though, for the same reason.)
cognitive errors, from investopedia here--
anchoring:
"Successful investors don't just base their decisions on one or two benchmarks, they evaluate each company from a variety of perspectives in order to derive the truest picture of the investment landscape."
mental accounting ("the tendency for people to separate their money into separate accounts based on a variety of subjective criteria, like the source of the money and intent for each account"):
"money is fungible; regardless of its origins or intended use, all money is the same."
confirmation bias ("first impression can be hard to shake because people also tend to selectively filter and pay more attention to information that supports their opinions, while ignoring or rationalizing the rest. This type of selective thinking"):
Signal strength plays into here. "Confirmation bias represents a tendency for us to focus on information that confirms some pre-existing thought. Part of the problem with confirmation bias is that being aware of it isn't good enough to prevent you from doing it. One solution to overcoming this bias would be finding someone to act as a "dissenting voice of reason". That way you'll be confronted with a contrary viewpoint to examine."
hindsight bias(" a person believes (after the fact) that the onset of some past event was predictable and completely obvious, whereas in fact, the event could not have been reasonably predicted"):
incorrect oversimplifications.... signs of the ...bubble... had been obvious ....is a cause for ...overconfidence....unfounded belief that they possess superior stock-picking abilities."
gambler's fallacy ("an individual erroneously believes that the onset of a certain random event is less likely to happen following an event or a series of events. This line of thinking is incorrect because past events do not change the probability that certain events will occur in the future."):
Given the same individuals trade over and over again on each others' responses, for trading in the same direction when entering or exiting a trade and so producing a direction to trade into when the market later responds to said trades, the conjunctive chart areas doing this decide, between multiple time frames, very much from its division of history the likelihood of events. Tapping into this, however, is at best an extreme challenge.
The articles say this -- "in the case of independent events, the odds of any specific outcome happening on the next chance remains the same regardless of what preceded it."
herd behavior, or any simplistic group-based view("the tendency for individuals to mimic the actions (rational or irrational) of a larger group. Individually, however, most people would not necessarily make the same choice.
The first is the social pressure of conformity. You probably know from experience that this can be a powerful force. This is because most people are very sociable and have a natural desire to be accepted by a group, rather than be branded as an outcast. Therefore, following the group is an ideal way of becoming a member.
The second reason is the common rationale that it's unlikely that such a large group could be wrong. After all, even if you are convinced that a particular idea or course or action is irrational or incorrect, you might still follow the herd, believing they know something that you don't. This is especially prevalent in situations in which an individual has very little experience."):
"an investor is generally better off steering clear of the herd. Just because everyone is jumping on a certain investment "bandwagon" doesn't necessarily mean the strategy is correct. Therefore, the soundest advice is to always do your homework before following any trend.
Just remember that particular investments favored by the herd can easily become overvalued because the investment's high values are usually based on optimism and not on the underlying fundamentals."
overconfidence ("Confidence implies realistically trusting in one's abilities, while overconfidence usually implies an overly optimistic assessment of one's knowledge or control over a situation."):
also -- "overconfident investors generally conduct more trades than their less-confident counterparts.
Odean found that overconfident investors/traders tend to believe they are better than others at choosing the best stocks and best times to enter/exit a position. Unfortunately, Odean also found that traders that conducted the most trades tended, on average, to receive significantly lower yields than the market....
The best fund managers know that each investment day presents a new set of challenges and that investment techniques constantly need refining. Just about every overconfident investor is only a trade away from a very humbling wake-up call."
Overreaction,Availability Bias:
"retain a sense of perspective. While it's easy to get caught up in the latest news, short-term approaches don't usually yield the best investment results. If you do a thorough job of researching your investments, you'll better understand the true significance of recent news and will be able to act accordingly. Remember to focus on the long-term picture."
prospect theory("people value gains and losses differently, and, as such, will base decisions on perceived gains rather than perceived losses. Thus, if a person were given two equal choices, one expressed in terms of possible gains and the other in possible losses, people would choose the former - even when they achieve the same economic end result.
According to prospect theory, losses have more emotional impact than an equivalent amount of gains."):
"minimize the disposition effect by using a concept called hedonic framing to change your mental approach.
For example, in situations where you have a choice of thinking of something as one large gain or as a number of smaller gains (such as finding $100 versus finding a $50 bill from two places), thinking of the latter can maximize the amount of positive utility.
For situations where you have a choice of thinking of something as one large loss or as a number of smaller losses (losing $100 versus losing $50 twice), framing the situation as one large loss would create less negative utility because the marginal difference between the amount of pain from combining the losses would be less than the total amount of pain from many smaller losses. "
The article's summary --
"The concept of anchoring draws upon the tendency for us to attach or "anchor" our thoughts around a reference point despite the fact that it may not have any logical relevance to the decision at hand.
Mental accounting refers to the tendency for people to divide their money into separate accounts based on criteria like the source and intent for the money. Furthermore, the importance of the funds in each account also varies depending upon the money's source and intent.
Seeing is not necessarily believing as we also have confirmation and hindsight biases. Confirmation bias refers to how people tend to be more attentive towards new information that confirms their own preconceived options about a subject. The hindsight bias represents how people believe that after the fact, the occurrence of an event was completely obvious.
The gambler's fallacy refers to an incorrect interpretation of statistics where someone believes that the occurrence of a random independent event would somehow cause another random independent event less likely to happen.
Herd behavior represents the preference for individuals to mimic the behaviors or actions of a larger sized group.
Overconfidence represents the tendency for an investor to overestimate his or her ability in performing some action/task.
Overreaction occurs when one reacts to a piece of news in a way that is greater than actual impact of the news.
Prospect theory refers to an idea created by Drs. Kahneman and Tversky that essentially determined that people do not encode equal levels of joy and pain to the same effect. The average individuals tend to be more loss sensitive (in the sense that a he/she will feel more pain in receiving a loss compared to the amount of joy felt from receiving an equal amount of gain)."
-- my take on the above:
r.l. addresses overreaction, matching the pattern of news from its most-common and initial-premise news and fundamentals.
overconfidence, I still struggle with, often in a contrary way by margin-calling (in simulator) and then maybe rewriting my plan with the ensuing brain spike.
herd behavior is often the counter-balance to overconfidence.
gambler's fallacy -- I also seem to switch between the overconfidence / herd behavior attitude and the "best fund managers' " attitude, taking on the chart as a constant challenge; now, though, I understand a constructive, limited-means is all that one needs to interpret the chart correctly, however subtle the micro-trend projecting the correct ray and dramatic the multiple time frame's size is to most-easily figure its existence.
hindsight -- Good for rewriting a t.a. method. Push the learning to before the trade, and you got it.
confirmation -- Locking in on one line or another is still common for me, and adaptability and willingness to drop or reinterpret the rank of a line still too rare an occurrence. I think I lock in on one line because there's some point of reason I want to use in or derive from it, which is beneficial to a better method and poor toward better trading.
mental accounting -- not sure why this exists here, since I only trade all of money each trade.
anchoring -- see confirmation.
-- a summary of my take:
mental accounting, I'll look for.
charting is mostly found items in forex when doing price/time without news/fundamentals or sessions or volume or multiple symbols or, often, multiple time frames. I'm okay with the last one, nay, any of them, it's just that one is tough enough. I believe that mental accounting for differences and hindsight/confirmation bias for the highlights are why I choose this.
herd behavior / overconfidence / prospect theory each overweight one's decision to force a lead into a final answer and to leverage a lead into an improved method.
-- again:
Y under-borrowing/over-hoarding/sensitivity-avoidance for confidence
X differentiating the same or same-ing the different object(s) for group
equals a losing exchange
again:
testing a chart reason for how effective current thinking ability is --
X group diff action same results, same action diff results
Y confidence under-borrowing / overhaording / sensitivity - avoidance
XY exchange losing
-- okay, that's usable. Tack on the typify angle selection list, and I'm done for this round.
No, off-chart study is good too. How about, scenario+ with some gut version mid-action/objects.
typical shapes to begin angle selection --
(fan / trend centerlines,ls2/slant,select(the above description)) - lp3 - combo
testing a chart reason for how effective current thinking ability is --
X group diff action same results, same action diff results
Y confidence under-borrowing / overhaording / sensitivity - avoidance
XY exchange losing
off-chart study --
scenario+ with some gut version mid-action/objects.
another p1:
typical shapes to begin angle selection --
(fan / trend centerlines,ls2/slant,select(the above description)) - lp3 - combo
testing a chart reason for how effective current thinking ability is --
X group diff action same results, same action diff results
Y confidence under-borrowing / overhaording / sensitivity - avoidance
XY exchange losing
stimulus-response training --
scenario+ with some gut version mid-action/objects.
scenario+
two parallel lines -- addict
one line w/dots -- encounter
cycle -- level
line crossed -- exchange
dot with parallel curves from it -- immersion
some gut-version --- displace-draw, copy - entire-body / gut, project - talk / emote
-------------
http://www.forexfactory.com/showthre...44#post6136244
"Can't say I'm a huge fan of broke rs who are regulated by CySEC in Cyprus.
I don't have any direct experience with Exness myself, so I'm not putting them down, but in general I stick to IIROC, FSA, Swiss, or ASIC regulated shops."
rofit|---||stop(post-)|
