Reacting To Market Moves, Part 2 by Melvin E. Dickover
What approach can lead to success in technical trading, in spite of all the cognitive biases we can have that were discussed in part 1 of this two-part article? Here in this second part, we try to answer that question by comparing what humans do in the market versus what the character Spock from “Star Trek” might do.
As a trader, you are competing with other human traders and with automated trading algorithms that are “Spock-like,” developed to be the emotionless, ideal trader. Thus, it is important to compare what you do to ideal technical trading.
WHAT WOULD MR. SPOCK DO?
I am going to describe an ideal technical analysis as Spock might do it, in order to provide a yardstick to compare behaviors against and to clarify what really needs to be done if you are to be the casino and not the gambler...