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Control our Emotions! Print
Written by Site admin   

 

Time for a breather
 

JUST before the hovering finger clicks the mouse to trade, there is one thing that online investors of the future might want to check: their “Rationalizer”. The device, a prototype of which was unveiled this week, is an emotion-sensing system designed to help investors keep a cool head when buying and selling.

emobowl

The idea was dreamed up by Philips, an electronics group based in the Netherlands, and the Dialogues Incubator, an initiative sponsored by ABN AMRO, a Dutch bank with intimate experience of rash decision-makers. Philips has been exploring emotion-sensing systems for a number of years, in part to see how electronic devices might help people cope with stress.

ABN’s interest stemmed from research showing that day-traders who exhibit more intense emotional reactions to monetary gain or loss also have significantly worse trading results.

The Rationalizer, which is still under development, consists of a bracelet that measures something called a galvanic skin response. This is a change in the electrical resistance of the skin which can be caused by various stimuli, like anger or elation. It cannot determine if the emotional arousal is negative or positive, only that it is happening.

The bracelet transmits its measurements to the “EmoBowl”, a saucer-like object which displays a moving light pattern to illustrate the user’s mood. If the person becomes emotionally aroused, the light pattern becomes more intense and turns from a soft yellow to orange. By the time it reaches a deep red, the makers reckon, it might be wise for an online trader to take a break and cool down. If only it had been available to deal with those crazed bank traders back in 2006-7 but I guess if it had, they'd have just switched them off!

 

From the blog

Trading False Breaks

Non Farm Payroll, NFP days, are well known for surprises and violent whipsaws.

False break outs are either the bain of the Forex traders life or one of the best trading opportunities available. I go with the latter view, I'm seldom comfortable with breakouts as there is a very high probability of false breaks so I like to be on the look out for failing breakouts as the probability of a move against the previous trend is higher.

Trader Vic, Victor Sperendeo, detailed the 2B false break in his 1991 book 'Trader Vic, Methods of a Wall Street Master' Take a look at the picture below.

This is how to trade them, see the chart and desciption below....

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