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Hi:
Early course said most of trade by computer,and the programe dont have emothins.
So,why Why we need consider emotions (nervousness, disappointment) in a trade in PA at 08C->Slide 21 Disappointed?
Because they are useful: A dissapointment and confusion measurement is precisely one of the things that PA analysis will give you. A Succesful BO makes things clear and with a failed BO or any other TR PA you will be disappointed (because you expected a trend) and confused.
@ludopuig First of all ,thanks for you reply,but programe(I mean computer software) don't have emotion ,like dissapointment and confusion,just human being have.
SO IF Emotion does not affect the transaction of the program,why we(the course) trade analysis base on emotions ? This what I confused.
Thanks again.
Hi Peter,
Computers do not have emotions that effect them trading, ie placing trades. They will take their programmed high-probability setups whenever they appear, without hesitation, without worry! BUT, good computer programs (algos) will have human emotional responses programmed into them to take advantage of us real human traders and our psychological weaknesses.
Good unethical algos, working with other similarly programmed algos, can manipulate the market through rapid movements (spikes, stop runs, etc) expecting human traders (those without good emotional management) to take trades resulting in losses for the weak trader, but gains for the algos. For example, what traders are selling at the very bottom of a sell climax? Not the algos, but weak traders (retail and institutional) not wanting to miss out on the sell off.
So, to succeed at trading you must learn how emotions can cause the typical trading mistakes we make. This is what the course teaches, over and over in different places/ways. You must learn to manage your emotions as they cannot be stopped from interfering thanks to the inherited survival skills built into our brains and nervous system. If you do not manage your emotional reactions, your thinking brain will simply be hijacked by its older (limbic) parts and mess you up. You will effectively be in a trance and later, after damage done and you 'wake up', you may not know why you did such a stupid thing. We have all been there. ; )
@richardhkbtc-com Thank you for your patient explanation. I understand!
@richardhkbtc-com
"For example, what traders are buying at the very bottom of a sell climax? Not the algos, but weak traders (retail and institutional) not wanting to miss out on the sell off."
Not sure this makes sense. Can you explain this please? Thanks
"For example, what traders are buying at the very bottom of a sell climax? Not the algos, but weak traders (retail and institutional) not wanting to miss out on the sell off."
Not sure this makes sense. Can you explain this please? Thanks
Sorry for that typo! It sure does not make sense.
I should carefully check my message before posting! Have modified original as it should have said ...selling at the very bottom... as you likely appreciate. Does that make sense now? Hopefully does. 😉
