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The Rhythm Of Living

InvestorEducation / Trader Psychology Oct 14, 2009 - 03:00 PM GMT

By: Charles_Maley

InvestorEducation

Action and reaction, ebb and flow, trial and error, change- this is the rhythm of living. Out of our over-confidence, fear; out of our fear, clearer vision, and fresh hope. And out of hope, progress - BRUCE BARTON (AMERICAN CONGRESSMAN 1886-1967)


If we want to become better traders, we need to rely more on ourselves, and less on the conventional wisdom offered by the industry experts. We have to build our own personal approaches. This process requires us to “try different things” for solutions to our problems. Personally, I have discovered many useful and profitable strategies by just testing different concepts and intuitions. I have also discovered a few useful strategies by accident. In other words, while testing one strategy, I discovered an even more significant strategy. This is fairly common.

Dr. John Harvey Kellogg and his brother Will were searching for strict wholesome foods to feed ill patients, when Will accidentally left some boiled wheat sitting out. When it went stale, they hoped to roll it into long sheets as to not waste it, but it broke down into flakes. So they toasted the flakes, added some sugar and it turned out to be a big hit with the patients.  Kellogg’s corn flakes were discovered.

The microwave oven was also accidentally discovered by Percy LeBaron Spencer of the Raytheon Company. He noticed that radar waves had melted a candy bar in his pocket. Further experiments showed that microwave heating could raise the internal temperature of many foods far more rapidly than a conventional oven. Now, what would breakfast be like without cornflakes or a microwave?

The list goes on. Hypertension drugs led to Viagra and angiogenesis drugs led to the treatment of macular degeneration. Even Potato chips, penicillin and vulcanized rubber were discovered by accident.  In fact, a fair amount of what we claim was developed from research, was really accidental. Mostly it’s the result of undirected trial and error, packaged as controlled research. So, we should be out there every day exploring and testing our observations and intuitions, and trying to find application in our trading.

Author Nassim Taleb wrote, “America's primary export, it appears, is trial-and-error, and the innovative knowledge attained in such a way. Trial-and-error has error in it; and most top-down traditional rational and academic environments do not like the fallibility of "error" and the embarrassment of not quite knowing where they're going. The U.S. fosters entrepreneurs and creators, not exam-takers, bureaucrats or, worse, deluded economists. So the perceived weakness of the American pupil in conventional studies is where his or her very strength may lie. The American system of trial and error produces doers: Black Swan-hunting, dream-chasing entrepreneurs, with a tolerance for a certain class of risk-taking and for making plenty of small errors on the road to success or knowledge.”

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Charles Maley
www.viewpointsofacommoditytrader.com
Charles has been in the financial arena since 1980. Charles is a Partner of Angus Jackson Partners, Inc. where he is currently building a track record trading the concepts that has taken thirty years to learn. He uses multiple trading systems to trade over 65 markets with multiple risk management strategies. More importantly he manages the programs in the “Real World”, adjusting for the surprises of inevitable change and random events. Charles keeps a Blog on the concepts, observations, and intuitions that can help all traders become better traders.


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