Simple secret to trading success | stockbee


Simple secret to trading success

Procedural memory is memory about how to perform procedures.

We have as an adult thousands of procedural memory. We perform these processes without thinking.

Driving a car is about procedural memory. We drive effortlessly without thinking. We are not even conscious of the process unless something happens.

Shaving, brushing your teeth, washing dishes, cooking, and many other things are stored in brain as procedural memory where we can do them without thinking.

The day you realize trading success is about developing procedural memory specific to a setup or style of trading , you will be on path to success. You will do things that will enhance procedural memory.

A good swing trader is driven by procedural memory. He looks at above stock and instantly procedural memory kicks in. It helps him instantly decide whether this is good setup or not, where to enter, where to put stop,  where to exit and so on.

This is why when you read about a setup in a book, it does no mean you will be able to trade it immediately. Because most trading books do not provide you procedural template.

If you read a book Trade Like Market wizard you will intellectually learn about setups used by market wizard but it does not develop procedural memory. To develop procedural memory you need to do same process as the market wizard does.

Same way knowing that the 96 million man uses Episodic Pivots as a setup is just one part of the equation but developing same process as he does is the key. Unless you develop similar procedural memory you will not find same stocks. He looked at this stock and bought it as EP, because he has developed procedural memory to find such stocks. He has well defined process he follows day in and day out. If you do same thing , you will find same thing.

There is no pill for developing procedural memory. Only significant effort can develop it b doing same process again and again.

Trading success is about developing expertise on a setup. When you try and develop expertise on a setup you train your procedural memory.

Procedural memories are implicit memories. They allow us to lower cognitive load. They are learned intuitions. It is stored in memory as one schema.

A process containing say 32 steps is not stored in memory as 32 discrete step but as one sequence of step. When performing that task the brain efficiently recalls all those steps simultaneously so you can do the task effortlessly.

A Episodic Pivots method once you develop procedural memory for will be stored in your brain as one sequence of events. It gets triggered once you see a EP candidate. same thing applies to any breakout or pullback setups.

Once you develop procedural memory it helps free up the brain to do other things. That is why once you develop procedural memory on setup you find trading becomes easy.

Developing procedural memory frees  the brain by reducing cognitive load. We know which stock to select, where to enter , where to exit, how much to risk. Beyond that it is adaptive so if we see change in market condition we slightly change our process instinctively.

Successful traders develop thousands of procedural memories about thousands of decisions or processes involved in trading. They make our life easy as a trader. If you watch a novice trader he or she spends so much time on things which trained trader does effortlessly and without much thinking.

When we are new to trading , we do not have many procedural memories. But as we develop as trader we quickly start building procedural memories about trading tasks.

You see the above stock in your anticipation scans what happens.. Few months ago if you were new to it, you did not have procedural memory for it, but through constant practice you see CHTR you know what to do. But now many members  have develop a procedural memory for it and it takes then 10 to 12 minutes or less to find good candidates. In the beginning they were consciously doing the process, now they don't need to do it as step by step sequence. As soon as they run the scan the entire set of memory of the process is triggered and you start looking for good setups.

Same thing happens to the Range Expansion setup once you start using it daily. You can be talking on phone or eating and you see good range expansion candidate shows up and you enter it while continuing to do your other things.

If you read about trading or buy trading manual you will not develop procedural memory. You develop trading related procedural memory by doing actual trading . If you do a process thousands of time you develop procedural memory.

How many hours and tries are required to learn to swim or perform dance or gymnastic. It is same for trading.

If your setup is fast setup requiring fast entry and exit like say day trade , then procedural memory is even more important. You have to perform the task at speed without thinking too much.

New traders spend too little time developing procedural memory. Before they can develop procedural memory they switch to new ideas and setup. One day they ride bike for few hours struggle, next day do few hours of swimming and give up because water enters nose and ear, next day they try something new. In the process they do not have procedural memory for setup.

In order to develop procedural memory at first you need t have a process template and then after repeating the process template hundreds of time it become automatic. While doing that you develop your own process and might develop process different from the template I provide.

You will see hundreds of examples of that on this site. Members have taken setups like EP or STIB or Momentum Burst or Anticipation and develop their own process flows or modified them to develop new methods.

For discretionary trading it is all about procedural memory development on a specific setup. For mechanical traders machine does that job.

If your efforts at training procedural memory to trade a setup or style are successful then you will become efficient in trading that style.

Once you learn a setup it become relatively easy to develop procedural memory on related style or setup.

If you want to make money trading focus on developing procedural memories and developing process loops. 

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