Michelle B submits:
As my posts show, I am a died-in-the-wool discretionary trader. I would not trade if I could not do it in a discretionary manner. Guided by chart patterns made by volume and price, I have noted in my years of trading that traders have different visual abilities. Frustration at times have surfaced when I have tried to hand over my hard-earned visual wisdom to another trader. I use little technical indicators and am not encouraged to change from that stance. I can eye trendlines without drawing them---sometimes I cheat and pop a clear plastic ruler on my screen to confirm what I am seeing.
Research in neuroscience has deepened our understanding how visual perception works. "When a kitten sees only horizontal lines for the first few months of its life, for example, it loses the ability to see vertical lines. These and other experiments suggest that the interconnections between neurons aren't fixed at birth, but evolve depending on visual experience." I vividly remember many years ago first seeing the squiggles which Gary B. Smith aka The Chartman would draw on his annotated charts when he was a RealMoney contributor. At first, I would chunk his carefully crafted work and see just a mishmash of meaningless lines and words. My eyes learned how to make sense of those annotations through time by constant watching of streaming charts and poring over countless annotated charts.
Being a visual artist in addition to a trader---I have a background in plastic arts and oils/watercolors---I have often wondered if my artistic abilities were connected to my visual strengths as a trader. A study shows that artists do indeed see differently from non-artists. Artists shift their gaze all over the visual field while non-artists chiefly focus on main features. In many cultures, it is considered rude, inattentive, or even suspect to shift our gaze away from the eyes of the person to whom we are speaking. Small scale shifting of our eyes, however, is excellent for comprehending charts. In other words: shifty-eyed lawyer, not good; shifty-eyed trader, very good.
I consider the appreciation and understanding of chart patterns to have significant artistic connotations. The artist, Devorah Sperber, focuses on shaking us up regarding what we see and think we are seeing: "... Sperber successfully disrupts and then refocuses our perception of familiar images; forcing us to reconsider how we interpret visual information and how we look at art."
In lieu of this research, I think it is important for beginning traders to realize that they need to learn to see chart patterns, and how fast that learning will take will depend on their mix of innate abilities and experience which they bring to the trading table. Also, a recognition of their visual perception weaknesses and strengths should shape in part what trading style they use.
Nice note. I enjoy reading your posts.
As I began learning to trade, I got the impression that discretionary traders are losers. All I heard from were talking about automated systems.
Like you, I don't think I would be trading if I could only plug some software in and wait.
Although I'm no artist, and have trouble looking others in they eye, I still can hear what the chart is saying. Even with a fair amount of accuracy. When my accuracy is off, money management and psycology rules kick in.
Keep up the great writing!
Michelle, how long have you been trading? Do you trade full time?
FT
John Jones, I am very pleased that you enjoy reading my posts! Feedback is important for blog writers--we aim to please.
FT, I have been trading about 10 years, 7 of them full time. Perhaps you would like to read my stocktickr interview: http://blog.stocktickr.com/2006/10/30/interview-with-michelle-b/
hey michelle- i too have the artistic side and cant trade w/out visuals- charts. had funny arguments w/non chartist and eventually they come around to all there dissin of chartist is silly, as all their 'price patterns' are charts and vice versa, as well as the fundy's who use repetitive patterns when looking at their metrics. keep up the good posts.
me, very good point regarding the fundies using repetitive patterns with their metrics also---just a different kind of pattern. However, both technical and fundamental pattern reading share the purpose of identifying supply/demand and tipping that scale to the trader's advantage.
Each trader needs to find the best approach for themselves, and there are as many approaches as there are traders. However, chart readers seem more accommodative with users of fundamentals than the other way around.
Well, I have no artistic talent whatsoever... :((
I am more of the cartesian engineer type. Maybe this is why I stare at charts so much. I will not give up on discretionary trading just yet.
Hopefully there is a niche somewhere in the discretionary realm for my brain type...
I too enjoy reading your insightful posts.
Michelle,
Also a big fan of your blogging. I would love to see some of your art work. Do you have any of it online? I'm big into art as well, although I've pretty much given up canvas for digital media. I do miss it though.
Joey
Nice post Michelle. Patterns really are everywhere. Another angle to approach the price action is by perceiving it as a musical work. I can't do this, and I'm creative but not artistic, so what I like to do is come up with various fundamental hypothesis and test them in the market. The market in fascinating in that it has something for all personalities ... or should I say that every personality has something for the market?
Also, your comment that "chart readers seem more accommodative with users of fundamentals than the other way around" is so very true. It may be related to the fact that most fundamental analysts are schooled in economics, which teaches that the market is at least 'weak form efficient', which is another way of saying all the information from past price action is already in the price, so technical analysis is redundant. Of course, this doesn't match up with the fact that in the real world, nearly all traders consult the charts in one form or another.
Sylvain, as Caravaggio pointed out in his above comment that harnessing creativity---and all humans possess this, artistic ability being just one expresssion of it---is what is important in identifying patterns. Focus on your creativity without being bothered that you are not 'artistic'.
And I am very pleased that you appreciate my posts!
Joey, I am very glad that you like my writing. Oddly, I have never thought of displaying my artwork on the Net!!! But now since you have planted the seed of possibility in that regard, it may happen, and I will be sure to inform you if it does. Briefly, I love color and rounded forms, and veer to realism in my style. Is any of your artwork accessible though the net?
Perhaps your missing the canvas will build up someday, and you will just go back to it.
Caravaggio, thanks for your insightful comment.
Michelle,
I have a few things out there. Some of the stuff found on the link are generic photographs, although I try and focus on a creative or artistic approach. Some of the earlier stuff is more expressive and I took liberties with the digital medium.
http://machine-malfunction.deviantart.com/gallery/
Joey
Joey, Thanks for the link to Deviant Art. I did not know about it. Did not want to join so I will comment about your art here. I liked the touched up photos very much---my favorite is Fall of the Seraphim. Use of yellow, red, and black along with the sense of desperate, flailing motion as showed by the striated texture was very effective.
Thanks for the comments Michelle. It doesn't surprise me that Fall of the Seraphim is your favorite. It is the only one where the photographs are secondary. It is actually digitally painted with photos only used as textures. It was a personal piece for me, paralleling the angels fall with someone who was once held in high regards falling from grace. Thanks again for taking the time to visit and comment. Hope to see your work sometime.
Joey