How Experts Make Decisions Under Uncertainty2

How Experts Make Decisions Under Uncertainty2 - How Experts...

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How Experts Make Decisions Under Uncertainty – Part II Brett N. Steenbarger, Ph.D. www.brettsteenbarger.com In Part One of this two part series, I pointed out research that suggests that the subconscious processing of athletic performers displays a Bayesian quality, weighting recent events against past ones to respond to shifting patterns of circumstances. When a market shifts volatility, for example, the expert trader must integrate the new data with his or her large database of experience to anticipate the next tick or the next directional move. How much weight to give the new experience, and how much to alter that weighting with each fresh experience, is the task of the Bayesian. It appears that the subconscious mind is capable of performing sophisticated integrations of new and old data to anticipate future events. This allows for peak performance under fast, stressful conditions that do not permit conscious, explicit processing, such as those faced by fighter pilots, professional boxers, and scalpers. Can this subconscious basis for expertise be cultivated? In an earlier article drawn from the training of elite Army Rangers, I looked at one possible model for facilitating superior performance. Perhaps we can also learn from the training of elite athletes and develop models for improving the performance of traders. Research in Sports Psychology What do we know about the psychological factors that contribute to success among athletes? A comprehensive research review reveals several important ingredients of superior performance: Goal-Setting – Over 500 studies find that setting goals facilitates performance across a variety of short-term tasks and long-term objectives. Goals that are highly specific, achievable but challenging, and
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This note was uploaded on 08/11/2009 for the course FINANCE Fixed Inco taught by Professor Proflim during the Three '09 term at University of Adelaide.

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How Experts Make Decisions Under Uncertainty2 - How Experts...

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