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Old 01-11-2010, 06:59 AM   #49

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Re: Self-discipline = Key for Daytrading

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"Look, for example, at this elegant little experiment. A rat was put in a T-shaped maze with a few morsels of food placed on either the far right or left side of the enclosure. The placement of the food is randomly determined, but the dice is rigged: over the long run, the food was placed on the left side sixty per cent of the time. How did the rat respond? It quickly realized that the left side was more rewarding. As a result, it always went to the left, which resulted in a sixty percent success rate. The rat didn't strive for perfection. It didn't search for a Unified Theory of the T-shaped maze, or try to decipher the disorder. Instead, it accepted the inherent uncertainty of the reward and learned to settle for the best possible alternative.

The experiment was then repeated with Yale undergraduates. Unlike the rat, their swollen brains stubbornly searched for the elusive pattern that determined the placement of the reward. They made predictions and then tried to learn from their prediction errors. The problem was that there was nothing to predict: the randomness was real. Because the students refused to settle for a 60 percent success rate, they ended up with a 52 percent success rate. Although most of the students were convinced they were making progress towards identifying the underlying algorithm, they were actually being outsmarted by a rat."

P64 HOW WE DECIDE
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Old 01-11-2010, 09:18 AM   #50

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Re: Self-discipline = Key for Daytrading

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Originally Posted by TheRumpledOne »
<-------------------------------------------------------------------->
"Look, for example, at this elegant little experiment. A rat was put in a T-shaped maze with a few morsels of food placed on either the far right or left side of the enclosure. The placement of the food is randomly determined, but the dice is rigged: over the long run, the food was placed on the left side sixty per cent of the time. How did the rat respond? It quickly realized that the left side was more rewarding. As a result, it always went to the left, which resulted in a sixty percent success rate. The rat didn't strive for perfection. It didn't search for a Unified Theory of the T-shaped maze, or try to decipher the disorder. Instead, it accepted the inherent uncertainty of the reward and learned to settle for the best possible alternative.

The experiment was then repeated with Yale undergraduates. Unlike the rat, their swollen brains stubbornly searched for the elusive pattern that determined the placement of the reward. They made predictions and then tried to learn from their prediction errors. The problem was that there was nothing to predict: the randomness was real. Because the students refused to settle for a 60 percent success rate, they ended up with a 52 percent success rate. Although most of the students were convinced they were making progress towards identifying the underlying algorithm, they were actually being outsmarted by a rat."

P64 HOW WE DECIDE
The experiment probably never happened, but if it did it was incredibly flawed. Rats in a cage are in survival mode. Yale undergrads are not so its not a good comparison. Try the experiment in a real world situation. Substitute morsels of food with the need for energy, and sustitute the t-shaped maze with a maze that has 12 arms instead (OPEC?). Rats would probably die off but the few that would survive would probably enslave themselves to the closest source of energy. On the other hand, Yale undergrads would gain control of the source of energy to remove any possibility of having the energy be randomly distributed to them and prevent the enslavement of future generations of yale graduates. Thier only true obstacle would be a partisan congress of non-Yale undergrads who think like rats.
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Old 01-12-2010, 05:05 AM   #51

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Re: Self-discipline = Key for Daytrading

Hi MM - you should be happy, given the way you follow your plan (congratulations and well done) you are the rat and hence are smarter than a group of Yale students.
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Old 01-12-2010, 07:10 AM   #52

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Re: Self-discipline = Key for Daytrading

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Hi MM - you should be happy, given the way you follow your plan (congratulations and well done) you are the rat and hence are smarter than a group of Yale students.
Make that 2 mistakes since October. I jinxed myself.
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Old 01-12-2010, 09:17 AM   #53

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Re: Self-discipline = Key for Daytrading

Hi, MightyMouse: Or perhaps Yale undergrads could develop another energy source.
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