Thin-slicing

Happy New Year everyone. I'm back!

This week’s series of articles looks at the implications of the phenomenon of "thin-slicing" in relation to profitable trading.

“Thin-slicing” is not (yet) widely discussed in trading literature.

Thin-slicing is not scalping, a method of trading that involves entering and exiting positions between very small price differences.

There is plenty of literature from the field of psychology and sociology on thin-slicing. It’s the phenomenon of arriving at conclusions based on very little evidence.

In academic circles, thin-slicing is disparaged. Bald assertions get no respect unless accompanied by ponderous reasoning and multiple footnotes referencing supporting materials.

Even in trading, laborious pondering gets more respect than thin-slicing. Imagine a commentator disucssing whether the markets will go up or down next week. Surely that commentator would get no credibility if he based his prediction on thin-slicing instead of ponderous reasoning.

Yet, thin-slicing can be more accurate and therefore more profitable in trading than laborious pondered reasoning.

continued tomorrow ...

Copyright 2007 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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