USD/JPY Discussion

I only short

That makes you a RED RAT!

"Look, for example, at this elegant little experiment. A rat was put in a T-shaped maze with a few morsels of food placed on either the far right or left side of the enclosure. The placement of the food is randomly determined, but the dice is rigged: over the long run, the food was placed on the left side sixty per cent of the time. How did the rat respond? It quickly realized that the left side was more rewarding. As a result, it always went to the left, which resulted in a sixty percent success rate. The rat didn't strive for perfection. It didn't search for a Unified Theory of the T-shaped maze, or try to decipher the disorder. Instead, it accepted the inherent uncertainty of the reward and learned to settle for the best possible alternative.

The experiment was then repeated with Yale undergraduates. Unlike the rat, their swollen brains stubbornly searched for the elusive pattern that determined the placement of the reward. They made predictions and then tried to learn from their prediction errors. The problem was that there was nothing to predict: the randomness was real. Because the students refused to settle for a 60 percent success rate, they ended up with a 52 percent success rate. Although most of the students were convinced they were making progress towards identifying the underlying algorithm, they were actually being outsmarted by a rat."

P64 HOW WE DECIDE (italics added)

This narrative illustrates a fascinating contrast between simple, adaptive behavior and complex, over-analytical behavior in the face of randomness.

Here's how we can interpret the outcomes:

Rat's Strategy:

1. Adaptation to Probability: The rat quickly adapted to the probabilistic nature of the maze, recognizing that the left side offered food more often. By consistently choosing the left side, the rat achieved a success rate that matched the probability distribution of the food placement (60%).
2. Acceptance of Uncertainty: The rat did not attempt to understand or predict the randomness; it simply settled for the best available outcome given the information it had. This approach is an example of satisficing, where an entity chooses an option that meets an acceptable threshold rather than seeking an optimal or perfect solution.

Yale Undergraduates' Strategy:

1. Overthinking: The students, equipped with higher cognitive functions, tried to find patterns where none existed. Their analytical approach led them to hypothesize and test various theories about the placement of the food, which was actually determined by a fixed, albeit skewed, randomness.
2. Lower Success Rate: Their refusal to accept that the task was inherently unpredictable resulted in a lower success rate (52%) compared to the rat. This illustrates how sometimes; complex analysis can lead to worse outcomes when dealing with true randomness or when an optimal strategy doesn't exist beyond basic probabilistic choices.

Lessons from the Story:

1. Simplicity vs. Complexity in Problem Solving: Sometimes, simpler strategies that acknowledge and work with inherent uncertainties can outperform more complex, analytical approaches that try to eliminate or predict uncertainty.
2. The Value of Satisficing: In situations where complete predictability or optimality is unattainable, satisficing can be a more effective strategy. This concept, introduced by Herbert Simon, suggests that in complex real-world scenarios, finding a 'good enough' solution might be more practical than seeking the best one.
3. Cognitive Bias: The undergraduates' behavior exemplifies cognitive biases like the illusion of control or patternicity, where humans see patterns in random data, leading to incorrect assumptions and strategies.

This tale humorously critiques the human tendency to overcomplicate solutions, particularly in academia or when dealing with inherently stochastic systems. It serves as a reminder that sometimes, the simplest approach, like that of the rat, can be the most effective in environments characterized by randomness or where perfect information is not available.

Thanks so much Sir.

Today, I only short because for 2 days closed below 15790. I guessed stupidly could down from 15790 to 15530 today or tomorrow.

...T-shaped... RAT ZONE.
Thanks so much Sir.

Sir TooSlow.
You have guided me a lot. Over the past 3 years, I have only studied forex and taken care of and made friends with 2 cats. Learning forex is my passion.
Thanks so much

i too shall join u in ur Rat race

Here's what ChatGPT had to say:

This excerpt highlights an interesting cognitive phenomenon: the difference in decision-making strategies between rats and humans when faced with randomness and uncertainty. Here's an evaluation and interpretation of the outcomes:
The Rat's Behavior:

1. Strategy: The rat used a simple heuristic: it consistently chose the left side after recognizing that it offered food more often (60% of the time).
2. Outcome: This strategy yielded a 60% success rate, the best possible given the rigged randomness of the experiment.
3. Interpretation: The rat's "success" comes from its acceptance of uncertainty and reliance on straightforward behavior. By not overthinking, it maximized rewards efficiently.

The Students' Behavior:

1. Strategy: The students attempted to find a hidden pattern or algorithm to predict the food placement, despite the randomness of the setup.
2. Outcome: Their attempts to optimize led to a lower success rate (52%) than the rat's.
3. Interpretation: The students' cognitive bias toward pattern recognition and overanalysis worked against them. Their refusal to accept the inherent randomness caused them to perform worse, even though they had the cognitive capacity to understand the setup.

Key Takeaways:

1. Cognitive Overload vs. Simplicity:
   1. The rat's simpler decision-making process allowed it to adapt to the situation effectively.
   2. The students, equipped with more complex reasoning abilities, overanalyzed and failed to adapt optimally.

2. The Downside of Seeking Patterns:
   1. Humans are predisposed to look for patterns and causation, even in truly random systems. This tendency can lead to suboptimal decisions when patterns don't exist.

3. Accepting Uncertainty:
   1. Success in uncertain environments sometimes requires accepting randomness and focusing on strategies that maximize outcomes rather than striving for perfection.

Broader Implications:
This experiment suggests that simplicity and acceptance of uncertainty can sometimes outperform overthinking and excessive analysis. It’s a reminder to balance our cognitive abilities with the realities of a situation, especially when randomness or uncertainty is involved.

short 157.66, 20 lots

tell us about your tp and sl Mr gold

Hello ThaoAnh,
I am sorry for asking but could you explain your chart to me?
I am a new learner to Forex and am used to seeing just the red and green candles, what is your chart telling me?

Thanks and much appreciated

I'm trying to understand and set up the RAT zone using MA(price high,Low) mtf with pips trigger line.
Since yesterday I have been thinking about Rat zone. I remember seeing it somewhere.
Sir TooSlow. You is Master.Horton !

It was GROK actually, ha ha, did you really un-ignore me just to post that?