The Way to Trade. John Piper

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СКАЧАТЬ Bill Williams’ model, (which in many ways is a far more appealing concept – thus we may find ourselves believing it more because we believe what we want to believe) there is access to vast resource and we just have to use it by transcending our current state.

      The concept of the “triune” brain fits within Bill Williams’ model and subdivides, in the main, the core and the left hemisphere, although the third part of the triune brain, incorporates the right hemisphere as well. But the focus of Plummer’s writing is on the problems presented by the structure of our brains and not how these problems may be transcended.

      Personally I feel that the concept of the triune brain and its problems in trading are self evident. Those who have traded know these problems all too well. We do not need to discuss whether or not the concept is right, because we have been there.

      We could perhaps say that it is only a model and as such is merely a representation of the true reality. As such perhaps it is merely a useful lie – a concept which we can use but which is not the “truth.” Indeed, yes, but then so is everything, including the chair you are sitting on and the book you are holding in your hands. Everything within your mind is only a representation of the truth.

      Bill William’s three part brain is perhaps a little more complex, but there is plenty of evidence for its existence and its usefulness. When we learn to ride a bicycle we go through the process of trying to ride it with the idiot left hemisphere and falling off. Eventually the core becomes trained and after that it is plain sailing. Actually I managed to fall off my bicycle the other day, but we will ignore that as a red herring. We have all experienced, I expect, driving up the motorway and being unable to remember the last few miles. This is because the core has been doing it all for us. Less common is the experience of the right hemisphere taking control.

      Bill Williams explains how we know which part is in control:

      One of the most interesting characteristics of your intrapersonal inhabitants (the three parts of the brain) is that you can always tell in an instant which one is in command. The way the world looks to you at this moment will tell you exactly which one is in charge. If your life at this instant is a struggle, you are concerned about time and language, you dearly want to do the right thing, and/or you aren’t having fun, your left hemisphere is definitely in charge. If, on the other hand, life is a series of ups and downs, you feel good physically, and you are having a good time, you are operating from your core. If life is absolutely a bowl of cherries and everything in the world seems to be geared to giving you exactly what you want, you are in the right hemisphere.

      An illustration of how these three parts interact in the trading environment described in Trading Chaos is reproduced in Figure 3.2. If you trade with only the right hemisphere you will have bad management, so you will lose. If you trade with only the core you will be reckless, or with only the left hemisphere you will be scared. If you trade without the left hemisphere you don’t have the experience, without the core you don’t have confidence, and without the right hemisphere you don’t have intuition. It is when all three parts are working in harmony you get what Bill Williams calls “profitunity.”

      Fig 3.2 Bill Williams’ brain model

      Source: Williams, B (1995) Trading Chaos, © John Wiley & Sons, Inc.

      Trading Chaos

      The layout of Trading Chaos is designed to get you there. The book offers five stages, each including different goals, and different tools to help you attain those goals. The five stages are: novice, advanced beginner, competent, proficient and expert. The goals are respectively; to minimize losses, to make money consistently on a one-contract basis, to maximize your profits, to trade your own belief systems, and to trade your states of mind. Each stage offers better tools to achieve these objectives. In this context tools refers to analysis techniques plus your own inherent abilities.

      The book doesn’t tell you how to tap the vast potential of your neck-top computer but then this has been the goal of all mystics and spiritual gurus through the ages and is perhaps too much to expect. But if you want to see the Holy Grail, look in a mirror!

      I have written this chapter because I believe the more we understand about ourselves the easier it will be to find success in the markets. The chapter may seem incomplete but it will be many decades, or even centuries, before we, as human beings, have a full understanding of ourselves, if indeed we ever do. So do not expect precise answers; and they are probably not even desirable. What you need are subtle signposts to steer you in the right direction (possibly such signposts should be aimed at parts of the brain other than the left hemisphere), I hope this one helps.

      SUMMARY

       I discuss two models of the human brain.

       The triune brain (see Appendix 2) offers a guide to why we often make a mess of trading.

       The Bill Williams’ brain model offers a guide to how we might want our brains to function to optimize performance.

       The triune brain consists of three parts, the Emotional, the Instinctive and the Thoughtful. All three have a vital part to play in our lives but the first two can be very destructive when trading the markets.

       The Bill Williams’ model is more physically based, consisting, again, of three parts. In this case the left hemisphere, the right hemisphere and the core. The left hemisphere brings management and learning to the table, the core operational ability, and the right hemisphere, intuition, inspiration and imagination. When all three parts are working in harmony we have “Profitunity,” as Bill William puts it.

      Chapter 4: YOU – THE FIRST LEVEL OF THE PYRAMID AND WHY

       We lie loudest when we lie to ourselves.

      Eric Hoffer

      There are many fundamental misconceptions about markets and trading. I have a natural talent for analysis. I wish I had more of a natural talent for trading, but I do not. I have got where I have despite my abilities, not because of them. But my analysis has helped a lot, because I now understand markets and how to make money out of them. I now make consistent profits and as each year goes by those profits get bigger.

      This book is not verbose, it cuts to the essentials. I might summarize these essentials as follows:

      1 You may think that the market exists somewhere out there. Wrong. How you think of the market is unique and exists only in your head. To win you have to ensure that your version of the market is “useful” and then make use of it.

      2 You may think you see your version of the market clearly. Wrong. What you see is shrouded within an emotional whirlwind. The whirlwind may get a lot faster when you have a trading position in place.

      3 You may think that trading is an easy function involving buying low and selling high. Wrong. In fact trading is not difficult, although nor is it easy, but the emotional problems we bring with us to the market mean that few win.

      These three statements summarize what you are getting into. In normal walks of life these sort of things either do not happen or we СКАЧАТЬ