Device Protects Day Traders From Emotional Trading 260
Philips Electronics, a Netherlands-based company, has come up with a device designed to protect day traders from emotionally based trading decisions. The Rationalizer measures your galvanic skin response and lets you know when you are under stress. An online trader can then take a "time-out, wind down and re-consider their actions," according to the company. This may have come too late for us, but at least future generations won't have to live through the horror of angry day trading.
I've known a lot of day traders. . . (Score:5, Interesting)
. . . and trust me, giving them a device that will tell them when they are stressed is about as useful as taping a stethoscope to their chest so they can check whether their heart is beating.
Day traders are *always* stressed. Always.
reminds me of House (Score:2, Interesting)
My wife and I were watching an episode of House recently where a billionaire dumped his stock in his company because he thought the karma would save his kid's life. I don't think any device would make a man with that level of conviction change his mind, though I imagine it might help prevent the last-minute-auction syndrome you tend to see on Ebay where a bidder ups a bid past the Buy-it-now price of the same item from another seller. It's irrational, but it happens all the time.
-l
What if... (Score:3, Interesting)
I can just imagine if this is used for drivers. You get stressed by the heavy traffic, or the twit who blocks you when you try to merge, and the car suddenly pulls itself off the road and won't start again until you calm down.
Re:Is day trading a good thing? (Score:4, Interesting)
You can think of it as short term investing. Sure, an investor produces nothing and earns money seemingly from nothing, but you're ignoring the fact that he's supplying the investee with the ability to produce a product/start a business, etc.
Day trading's the same on a micro scale. Any consential transaction benefits all parties. So in the end it's positive.
Re:Is day trading a good thing? (Score:3, Interesting)
Professional traders (which i hope to be one day) are the lubrication of the gears of finance. They give companies the money to grow. The difference between traders and Joe Bob who bought a stock is financial education. If Joe knew what a pro knew, he'd do it too. Most people do not have the time or interest to seek a financial education. Which is terrible for them and the economy in general. ERISA and the baby boomers are going to fuck up the US economy in about 6 years or so*. i hope that won't happen, but there is a huge potential for disaster there.
It's like a wave powered generator. The waves are there and aren't going away. Traders siphon some of the energy that was swishing back and forth anyway. They just keep it, instead of losing it. Imagine a field of hovering platforms rising and falling above the water. An uneducated person would stay on it until they are sniffing saltwater. A pro would have sensed the downward trend and hopped off. Being smart enough to follow the rats off the sinking ship isn't evil or selfish or greedy, it's smart.
The company i'm trading doesn't care if i hold the stock for an hour or a year. The market doesn't either, really.
Day traders benefit the market as a whole by making the market exist and giving it life (movement). If a stock is (wrong)valued, the day traders smell the blood and start the correction.
i'll grant you that it's hard to see the benefit, but it's there.
Day traders are a tiny part of the whole trading ecosystem. They just happen to be the sharks, while most people are the tuna. In a very real way, my success depends on being smarter than the sucker i'm selling to or buying from. But that's true of all business! i'm smarter (at computers) than the users i support. They don't want to be computer smart, they want to be smart at something else. So they pay me to be smarter and do things they don't want (to learn how) to do. i don't want to go to chef school but i want to eat mushroom risotto. i give money to someone smarter than me to cook it for me. The chef isn't evil and i'm not a chump (just lazy). It's an exchange of want for have. i have money, he wants money. i want nummy risotto, he has cooking skill and morel mushrooms.
In stock trading, i HAVE a stock that's been going up. Joe heard from Jeff that $stock is going up. i forecast, based on the dojis, P/E ratios and the M for murder that this stock has run up against resistance and is about to go down. i WANT to cash out and take my girlfriend to Restaurant Nora for that risotto. Joe WANTS that stock and HAS cash. We both get what we want. The stock moves. Joe might get what he wants too.
It's only gambling if you don't know what you're doing. The meteorologist doesn't pull a prediction out of his ass. He looks at historical trends. Good poker players don't gamble. They read your tells, calculate odds and decides the risk/reward ratio he wants. He KNOWS when to hold 'em. Yeah, there is risk involved. But a smart trader knows not to take stupid risks (or to let emotions or ego get in the way). Being someone in the know... i can make money on a stock regardless of the direction its moving.
* When the boomers are forced to start withdrawing from their 401s there will be more sellers than buyers, stock values will tank (unless we have an awesome president between now and then).
Re:galvanic skin response = wheatstone bridge (Score:3, Interesting)
Re:Is day trading a good thing? (Score:3, Interesting)
No serious. Part of the reason we're in such a mess is because of over-efficient business. Business doesn't keep items in stock, they don't have spare capacity, everything is optimized so that every penny is squeezed from the business as long as everything runs as normal. The slightest hiccup will make the whole house of cards come tumbling down.
Contrast this with nature. Overefficient predators will die out (as they deplete their source of food), and everything is set up to be adaptive, not optimized. So yes, efficiency is overrated, adaptability is better. In the long run we're dead, but hopefully not extinct.
Re:Is day trading a good thing? (Score:3, Interesting)
Day traders are a tiny part of the whole trading ecosystem. They just happen to be the sharks, while most people are the tuna.
I guess I was asking, what's in it for the tuna? Why should a tuna let itself be eaten by a shark, when the tuna is a citizen of a democracy where it can vote to outlaw sharks?