I\u2019ve read an enormous number of books, attended lectures and read some academic papers. You can shortcut most of this into a simple concept.<\/p>\n
Your brain has two modes of operation.\u00a0 One is instinctual, the other more logical and computational. \u00a0The first reacts quickly to situations and sometimes gets it wrong, but generally gets it right. It\u2019s a payoff between speed and roughly correct decisions. You act subconsciously but quickly.<\/p>\n
The other is slow but accurate. Here you need to really engage your brain and work something out so you distract yourself from things at hand and fully engage thinking mode.<\/p>\n
I\u2019ve come up with an experiment where I can actively invoke both these functions in people to demonstrate both modes of operation. How to do this came to me when I was sat in a mountain lake of all places. But the process I came up with, can switch people backward and forwards between these two modes with ease to prove they exist and how they work.<\/p>\n
Confusion occurs where these two mindsets interact with each other and try and outdo each other. You learn that both are necessary as humans navigate an\u00a0ever changing world as without these two competing systems you couldn\u2019t live day to day. Making simple decisions or learning new skills would become impossible without both systems in their respective modes. All the time you are switching between modes, especially when trading.<\/p>\n
Why I\u2019m interested<\/strong><\/p>\n I originally thought I was leaving the corporate world to go into financial markets. To become a full-time trader \/ investor. I got side-tracked and ended up on sports markets, easily the best decision I ever made! But the interesting thing from this was that I was hopeless at trading short term. I was a total idiot, it was embarrassing. I was jumping in and out of positions and racking up loss after loss and I couldn\u2019t figure out why.<\/p>\n Wind forward a few years and I have this phrase that the market \u2018sings to me\u2019. I can read the market really well and it\u2019s easy for me to figure out if I\u2019m hearing a lot of noise or a beautiful song. I can often tell what lyrics are up next.<\/p>\n It was difficult to explain, but with practice, you obviously get better. You also learn that your trained subconscious mind is working it out in advance for you. Read this fascinating Gladwell piece: –<\/p>\n \u201cWhat the Iowa scientists found is that gamblers started generating stress responses to red decks by the tenth card, forty<\/em> cards before they were able to say that they had a hunch about what was wrong with those two decks.\u201d<\/p>\n https:\/\/gladwell.com\/blink\/the-second-mind\/<\/a><\/p>\n Solving problems<\/strong><\/p>\n I\u2019ve basically learned to make the \u2018right\u2019 instinctual decisions. But this was actually a learned task You can learn to do it too, but it took some time and a framework for me to learn how.<\/p>\n I started where I suggest everybody does. I broke down the problems within the market by gathering data and knowledge and drilled down into more detail. I came up with ways to describe it, what created the perfect trade and why. For a market taking place tomorrow, I can tell you now what to look for and when and why that will happen and what will cause it. I\u2019ve created the toolkit for solving that problem. I\u2019ve also used that toolkit to automate some activity. But despite that trading manually I can still beat automation, apart from where speed is of the essence. It seems the ability of the brain to quickly react to changing circumstances is the reason.<\/p>\n You would think solving that problem would be enough. But you learn quickly that you can give people a very clearly defined plan but they can\u2019t execute it. Trading is counterintuitive by nature and therefore executing a trade successfully needs a different mindset from that which people are generally used to in their day to day life.<\/p>\n Sports players often react\u00a0way inside the generally accepted reaction times given by medical science. They have abilities to react to a situation without \u2018thinking\u2019 about it. It’s the same with any skill, the more you do purposeful practice the more instinctive it becomes: –<\/p>\n
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