How smart is too smart?

rffrydr · Posted: Thu Dec 06, 2007 1:15 am Post subject: How smart is too smart?

The prejudice of intelligence:

http://www.nytimes.com/2007/11/24/business/24shortcuts.html?em&ex=1197090000&en=b6268c50b1ca0853&ei=5087%0A
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nodoodahs · Moderator Joined: 06 May 2005 Posts: 1865 Location: TX

Google "outcome bias."

Statistical analysis can tell us where mounting numbers of bad results are from a plan that wasn't as good as we thought it was, but one outcome in a series, if done as a part of a plan, is just a data point. One outcome with a bad/good result is good or bad defined only according to execution of a plan ... a statitistically significant number of outcomes with a central tendency towards "bad results" is another matter.

The tao of imperfection, or of making decisions with imperfect knowledge ...
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rffrydr · Posted: Thu Dec 06, 2007 11:11 am Post subject:

Think of it like a Shroedinger (sp?) Wave Equation...or the duality of light. Cool

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texfly101 · Senior Poster Joined: 22 Oct 2007 Posts: 116

Good article and very relevant to me currently. Right now, I'm struggling with a trade that resulted in less than optimum profits. I go back and forth between whether I have learned to not do that again since I could term it a mistake or if I was just being disciplined and the result was what was supposed to happen by being disciplined and holding to my strategy. So I guess its contextual in nature rather than being absolute. Not easy for someone who is classically trained as an engineer to get the "right" answer. Having to hold the trade in two opposed viewpoints really shows to me the psychological nature of trading. Since I have the experience in my trading memory, it will be interesting to see if I let it influence future trades. Can I end up being "Too Smart" and not engaging in a similiar trade because I view it as mistake or do I do it again because I view it as not a mistake and actually a success because its evidence of discipline in trading? Maybe the "Too Smart" is by prejudicing the trade with a good/bad judgment. Hmmmm, again, thanks for the article, its making me think and realize why I am conflicted about the trade and maybe will help me to let it go and just accept it as it was.
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