OR- How I quit worrying about markets and learned to live in the world.
I have been influenced by the writings of futurist Ray Kurzweil. His trilogy on thinking, The Age of Spiritual Machines, The Singularity is Near and How to Create a Mind is a great addition to any trader's tool kit. The latter book is a "must have" companion to Reminiscences of a Stock Operator in any serious practitioner's library.
The actual primary reason we have a brain is predicting the future. You can bypass all the science behind the neocortex and skip to the actuality of the last sentence. Our brains are designed and exist for us to trade. We are hard wired for the activity.
Kurzweil espouses the Pattern Recognition Theory of the Mind. Basically, the neocortex "thinks" by creating and recognizing patterns. Having a stored memory of such patterns the brain is then constantly predicting what the next connection should be. Consider the extraordinary case of Garry Kasparov. Kasparov, we know, had learned roughly 100,000 chess board positions. (most doctors master about 100,000 medical concepts and Shakespeare used about 100,000 word senses) Deep Blue was able to store roughly 200 million board positions in a second. And yet, Kasparov was able to contest Deep Blue admirably. The reason is the same reason you, post reader, think there's a "bear flag" in the Yen future, pattern recognition.
Read the book.
But here's what interested me most: The brain confabulates to help it make sense of undirected thoughts. Human beings - by neocortex design - confabulate ALL THE TIME when explaining the outcome of events. That's right Neo, you make it up. The best example of neocortex confabulation is financial market commentary. The next time your listening to Pasani explain "what just happened" or feeling you blood pressure rise at a Rantelli white board hysteria - realize they are doing what the human brain is predisposed to do. They are filling in the pattern sequences they are missing by making stuff up. It's biological.
Read the book. You won't be disappointed. You will come away with an understanding of how we "think" about the future, about what comes NEXT. Nervous concerns over algorithms and "HFT" will fade away to the reality that our brains can manufacture these technologies no other way, YET. Best of all, you'll know the next time a financial commentator (hey, I was/am one too !) crosses your screen, he/she is by their very design, making things up.