When people do coding in a completely designed language it always produces the same result. This is a way of saying that the coding, by whoever does it, will be totally reliable. APL groups spend a lot of time assuring that what they produce, when complete, works with certainty.
Sorry, I assumed that you understood that what we take are the analogy of the models, not the models exactly nor certainly not the domain of inputs (why would we even assume that the theory that models an apple falling has identical inputs to the analogous "newton model of markets" ?) Maybe it is I that don't understand what you are saying, because that objection is tautologous. Look, the first scientific theory in the history of humankind was Newtons laws of motion, which showed how gravity affects the motion of objects with mass. Later, people realized that the theory of the electromagnetic force was nearly identical to gravity, even though they sure look like totally different things. They are described by nearly identical equations! The EM model is almost exactly the same as the gravity model, except where you plugged in mass into the newton equation, you plugged in change into the EM model, where you plug in gravitational constant in Newtons model, you plug in the charge of the electron into EM model, where you plug in distance you still plug in distance, etc. The point is that people reason by analogy from exact sciences to the less exact sciences. You can object that human behavior is not a science at all, but I argue that a mass of humans acting as agents on a large scale behave very much like a physical system - an emergent one. Not exactly, but trading is horseshoes and hand grenades on a first approximation. Newton inspired Maxwell, who inspired Einstein to make gravity look like Maxwell's theory!!! Positive feedback (this time feedback is abstract) in the advancement of the sciences at work, each building on each other. The addition of feedback is what makes Newtonian trading models trade able. Feedback does not come from Newtonian concepts, but it does come from the sciences. For example, at the core of how a neuron in a human brain works is the concept of feedback. nitro PS The Black Scholes equation is the most blatant example of how physical models affect the design of market models http://en.wikipedia.org/wiki/Black-Scholes is a rehashed "market version and language" of the Heat Equation in Physics: http://en.wikipedia.org/wiki/Heat_equation Feedback goes by the name "calibration" in option models.
Yes, low viscosity = big moves low volume, high viscosity is small moves big volume. Big moves big volume, small moves low volume is "Water". John
I strongly suggest you all read this article. http://www.elitetrader.com/vb/showthread.php?s=&threadid=121967 nitro
Jack, I'm not sure I've said this...at least I don't recognize what you say I said as anything I can remember saying or perhaps meant. To restate my perspective on trading: 1) The markets are a complex system in the formal definition of Complexity Theory. 2) Any linear rule based system filters out so much information on the markets that it can only capture a tiny percentage of the potential profits compared to a non-linear trading system. 3) The human brain can only handle decision making using 7 to 10 variables at a time. This further reduces the potential to use all information available for trading if you are a manual chart or indicator trader. 4) The best approach to developing automated trading systems is to use past price history to extract non-linear patterns using non-linear based data mining software. The most widely know of these are Neural Networks. The advantage is that instead of spending weeks, months and years looking for a new idea to convert a Complex System into something that will fit into a linear world view (charts, indicators) you develop the system in non-linear terms and trade it using non-linear models created by the software application. Jerry030
What a great post! It is in my top 10 list now! Verbalization of the modeling ideas using a simple and yet explicit language is a hard challenge. Your thoughts are expressed with the exceptional clarity and conviction! Very, Very well said. Thank you! Please continue. I would like to hear more from you as it resonates very much with my own thinking. Very refreshing! P.S. I followed you link and have read the article. In âwiredâ. Very interesting. I will send it to the guys I work with.
how weird, needing an indicator and all this science for something that the eye can see pretty clear and the brain can interpret almost without flaw.... hm.. makes you wonder.