Rat Brain vs Human Brain To Solve Rigged Puzzles

newtrader101

Well-Known Member
#1
Found this interesting:
....
TRADING IS SIMPLE
Look, for example, at this elegant little experiment. A rat was put in a T-shaped maze with a few morsels of food placed on either the far right or left side of the enclosure. The placement of the food is randomly determined, but the dice is rigged: over the long run, the food was placed on the left side sixty per cent of the time. How did the rat respond? It quickly realized that the left side was more rewarding. As a result, it always went to the left, which resulted in a sixty percent success rate. The rat didn't strive for perfection. It didn't search for a Unified Theory of the T-shaped maze, or try to decipher the disorder. Instead, it accepted the inherent uncertainty of the reward and learned to settle for the best possible alternative.

The experiment was then repeated with Yale undergraduates. Unlike the rat, their swollen brains stubbornly searched for the elusive pattern that determined the placement of the reward. They made predictions and then tried to learn from their prediction errors. The problem was that there was nothing to predict: the randomness was real. Because the students refused to settle for a 60 percent success rate, they ended up with a 52 percent success rate. Although most of the students were convinced they were making progress towards identifying the underlying algorithm, they were actually being outsmarted by a rat."


https://www.elitetrader.com/et/threads/trading-is-simple-therumpledone.233879/
 
Last edited:

NJ78

Well-Known Member
#2
Found this interesting tidbit
....
TRADING IS SIMPLE
Look, for example, at this elegant little experiment. A rat was put in a T-shaped maze with a few morsels of food placed on either the far right or left side of the enclosure. The placement of the food is randomly determined, but the dice is rigged: over the long run, the food was placed on the left side sixty per cent of the time. How did the rat respond? It quickly realized that the left side was more rewarding. As a result, it always went to the left, which resulted in a sixty percent success rate. The rat didn't strive for perfection. It didn't search for a Unified Theory of the T-shaped maze, or try to decipher the disorder. Instead, it accepted the inherent uncertainty of the reward and learned to settle for the best possible alternative.

The experiment was then repeated with Yale undergraduates. Unlike the rat, their swollen brains stubbornly searched for the elusive pattern that determined the placement of the reward. They made predictions and then tried to learn from their prediction errors. The problem was that there was nothing to predict: the randomness was real. Because the students refused to settle for a 60 percent success rate, they ended up with a 52 percent success rate. Although most of the students were convinced they were making progress towards identifying the underlying algorithm, they were actually being outsmarted by a rat."


https://www.elitetrader.com/et/threads/trading-is-simple-therumpledone.233879/
I remember this study very clearly. Overthinking does humans in. Animals are driven by survival instinct. They go for what works rather than trying to prove a point.

By the way, I used to follow the works of that trader as well (The Rumpled One). I recollect one of his threads from like 10 years ago titled "All you need to trade is a horizontal line". It's something I've been trying to do lately.

1. Look left
2. All you need to trade is a horizontal line
 

Attachments

#3
It seems to me you are making it sounds very simple on many many ways here no matter how do you put that. Forex gaming is not that simple so expect to pay something like that over time so do not need for some major explanations anyway.
 

Similar threads

Broker Special Offers

Zerodha – Open Paperless Account

Open online account with Zerodha. Free delivery trading and Max Rs 20 for Intraday, F&O, Currency and Commodity Trading. Intraday High leverage with MIS, CO and BO.

Name:Phone:
Email:City:
State:
Are you a day trader?