In the eyes of the curious, the world is an endlessly fascinating place.

There is a well-nigh inexhaustible stream of ideas, events and phenomena worth pondering — and profiting from.

It is in this spirit that the Edge Foundation does what it does. Every year, Edge.org’s World Question Center poses a new question to be answered by a group of luminary thinkers — philosophers, scientists, historians and the like.

As one might expect, the utility of the answers hinges on the quality of the question. Some years the inquiry is too woolly-headed or navel-gazing to be of much use.

But with the 2011 question, they hit the jackpot:

“What scientific concept would improve everybody’s cognitive toolkit?”

For traders, this is an absolutely brilliant question, which, in terms of practical response value, could effectively be rephrased as:

“What are some key high level concepts for improving trading results?”

Successful traders navigate a dynamic interplay of history, mathematics, and human psychology in their pursuit of consistent profits. One can recast this endeavor as seeking to better perceive, interpret and exploit the information signals emanating from the world around us.

In simpler terms, traders can benefit from acting more like scientists. And everyone’s “cognitive toolkit” could use a little upgrading.

The answers to the Edge.org 2011 question — “What scientific concept would improve everybody’s cognitive toolkit?” — can be found here. There are 17 pages worth — some extensive, some short and sweet. I’m sure I’ll be drawing new insights from this resource for much of the year.

Here are some excerpts:

• How Would You Disprove Your Viewpoint? – Howard Gardner: Thanks to Karl Popper, we have a simple and powerful tool: the phrase “How Would You Disprove Your Viewpoint?!” In a democratic and demotic society like ours, the biggest challenge to scientific thinking is the tendency to embrace views on the basis of faith or of ideology…

• A Probability Distribution – John Allen Paulos:  The notion of a probability distribution would, I think, be a most useful addition to the intellectual toolkits of most people. Most quantities of interest, most projections, most numerical assessments are not point estimates. Rather they are rough distributions — not always normal, sometimes bi-modal, sometimes exponential, sometimes something else…

• Possibility Spaces: Thinking Beyond Cause and Effect – Danny Hillis: One of the most widely-useful (but not widely-understood) scientific concepts is that of a possibility space. This is a way of thinking precisely about complex situations. Possibility spaces can be difficult to get your head around, but once you learn how to use them, they are a very powerful way to reason, because they allow you to sidestep thinking about causes and effects…

• Conceptual Metaphor — George Lakoff: Because conceptual metaphors unconsciously structure the brain’s conceptual system, much of normal everyday thought is metaphoric, with different conceptual metaphors used to think with on different occasions or by different people…

• GIGO — Milford Wolpoff: GIGO means “garbage in, garbage out.” Its application in the computer world is straightforward and easy to understand, but I have found much broader applications throughout my career in paleoanthropology.In computer work, garbage results can arise from bad data or from poorly conceived algorithms applied to analysis…

• TANSTAAFL — Robert Provine: TANSTAAFL is the acronym for “There ain’t no such thing as a free lunch,” a universal truth having broad and deep explanatory power in science and daily life…

• Skeptical Empiricism – Gerald Holton: In politics and society at large, important decisions are all too often based on deeply held presuppositions,ideology or dogma — or, on the other hand, on headlong pragmatism without study of long-range consequences…

• Gedankenexperiment — Gino Segre: The notion of ‘gedankenexperiment’, or thought experiment, has been integral to theoretical physics’ toolkit ever since the discipline came into existence. It involves setting up an imagined piece of apparatus and then running a simple experiment with it in your mind for the purpose of proving or disproving a hypothesis…

• Antifragility: the property of disorder loving systems — Nassim Taleb:  Just as a package sent by mail can bear a stamp “fragile”, “breakable” or “handle with care”, consider the exact opposite: a package that has stamped on it “please mishandle” or “please handle carelessly”. The contents of such package are not just unbreakable, impervious to shocks, but have something more than that , as they tend to benefit from shocks. This is beyond robustness…

Again, check out the whole thing here.

JS

p.s. Like this article? For more, visit our Knowledge Center!

p.p.s. If you haven't already, check out the Mercenary Live Feed!



Similar articles you might like:

• Who's Driving the Bus? (Reflections on Cognitive Bias)

• Can Excess Focus Degrade Performance?

• The Quiet Eye

• Better Decision Making Under Stress

• Panic is for Suckers

• Adjusting Your Mental Model

• On the Art of Learning

• Mental Conditioning and SEAL Team Six

• The Trader's Mindset: Always Be Climbing

• Upgrade Your Cognitive Toolkit

• Improving Your Decision Making Skills

• Knowledge Work Athletics and Getting Things Done

• A Simple Yet Effective Way To Immediately Raise Your Game