Trading requires a different thought process. Logical
thinking process will not work well in solving trading related problems. A
logical process requires a well defined existing knowledge base to build on. As
far as trading is concerned most of the time this knowledge base is vague, irrational
and ill defined.
Scientific methods also will not work well. Scientific methods
of problem solving start with defining all the parameters of the problem in order
to define the solution. This is simply not possible as there are too many
variables
Trading requires a creative thinking process. We need to
create new knowledge base and approach the problem differently than we have
done before. This requires understanding the context, generating new insights and
rationally analyzing the various options.
We need a solution based or solution focused thought
process. Solution is really the starting point. Problem solving starts with a solution
and then moves back to define enough of the parameters to optimize the path to
the goal. In other words it starts with the goal or what is meant to be
achieved instead of starting with a certain problem and trying to solve it.
You may call this a kind of reverse engineering. Decide upon
the kind of move you want to capture and study those moves. You will be able to
define enough variables that triggered those moves. Think rationally and apply
a “Common Sense” filter on those and focus only on those which are really relevant.
Awesome post!!!
ReplyDeleteThis is actually the case. Trading is so much different from the normal logical thinking process, that we have been trained all our life and most difficult part of trading is unlearning. Still struggling with it :)
good one ST. thanks for this write up and it is true.
ReplyDeleteregards
VK
@ Anurag
ReplyDelete@ VK
Thanks
ST