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Pavlov’s dog and Mechanical Trading Systems
By Singapore Man of Leisure  •  September 9, 2011
I remember in the 80s there is a HK comedy spoof of the 50s Black Rose (黑玫瑰) heroine genre movies... In the 80s comedy, a grown up Feng Bo Bo plays the role of a modern martial arts exponent  (I think she suffers from amnesia or delusion) who have a senior (师姐) who is even more skilled in martial arts than her. Their teacher gave Feng Bo Bo a bell to "control" this senior. Whenever the bell is rung, this senior must do a martial arts display or warm-up routine. It cracks me up! Can anyone remember this comedy? Anyway, just thought the bell will come in handy to make fun of somebody in my ending... OK, back to posting! Pavlov's dog shows us how reflex conditioning can affect our behaviours (OK, OK. On the dog, not us! So sensitive!)  Mechanical Trading Systems aim to take the human emotions out of our buy and sell decisions. We follow the pre-determined buy and sell rules to a tee. No ifs or buts. A true Mechanical Trading System means you have to turn left as suggested by the "GPS" - even if there is no left turn on the road! I got this inspiration from CW8888's GPS Navigator. If you "argue" with your Mechanical Trading System, you are a Discretionary Trader (or very confused like the Feng Bo Bo character above. LOL!) There are no shades of grey here. It's either, or. The roller-coaster events of these few weeks are very interesting. DOW goes up 500 points one day, next day down 500 points. Mechanical traders out there. What did you do? Did you follow your Mechanical Trading Systems? Or are you now in hospital with whiplash injury? Hey! Switching off your system is a "discretionary" decision! Cannot cheat! Me? I am like the Tao I-Ching. I am more a Discretionary Trader with a dot of Mechanical Trading (I use automatic stop loss). What? I say just now it's either, or? No shades of grey? Yahor... Hey! It's my post and I can make up the rules as I go along. Lao kui (漏气) also must put on a straight face! To me, following rules without question all the time is like listening to the bell and react. I would like to think I am "smarter" than Pavlov's dog. No food ring the bell I salivate for what!? Show me the money than I salivate!  Now to my qian bei (前辈) friend Coconut. Ring-a-ling-de-ling! Ring-a-ling-de-ling! Don't hit the face! I need it for tan chiah (探吃) one! P.S. Young readers out there, cannot be disrespectful to seniors! Coconut and I are different. I got one screw loose in my head. I not sure Coconut got any screws in the first place... LOL! Ling, ling, ling! Ice-cream! Eh? I infected too... (Eggs on my face) Singapore Man of Leisure (welcome to my blog; just google it!) This post was written by a guest contributor. Please see their details in the post above. If you'd like to guest post for TheFinance.sg, feel free to contact me for details about how YOU can share your tips and knowledge with our community.
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By Singapore Man of Leisure
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