Trading with Memory!

Traders are humans.

And all humans have three kinds of memory.

1) sensory memory

2) working memory

3) reference memory

Much of what we see or hear in the market is crap.

Our sensory memory rightly discards much of it hence saving our decision system from overheating or overloading.

Only whatever is noteworthy is passed on by the sensory memory to the working memory "for a closer look".

This includes things which can be potentially threatening or rewarding!

If your working memory "is not impressed" with this shortlisted information, it is dropped.

Otherwise, it is double-checked with the reference memory.

So,what is the use of this all theory?

Simple.

First, Keep your sensory memory free from all clutter.

Don't overload it with a flood of irrelevant market news being pumped by the business channels etc.

Otherwise there is every chance that this highly sensitive and important memory will malfunction.

Important information will either be missed or crap will be passed on to the inner echelons.

Als, too much of hyperactive information flood can create illusion for this sensory barrier resulting in over-reaction or under-reaction.

Second, Keep your Reference memory well stacked with rich knowledge and experience.

This will help it give the right decision and consultation whenever the working memory throws any qualified question!

And in between these two memories (sensory and reference memories) lies the thankless job of the working memory which has to segregate diamonds out of the shortlisted piece of glasses!

Keep it fresh and sincere!

Moral of the story :

Trading is fun but not funny!