I wanted to throw a question to the group. For 30+ years, I've been a coin collector. Determing the value of a coin is a function of its grade, size, metal content, rarity, and even trendiness. The value of the coins can be looked up in a book, but grading the coin is tricky...it is part art, part science...you have to consider the strike, wear, bagmarks, planchet flaws, lintmarks, etc. I also dabbled in collecting rare comicbooks. Don't laugh...made quite a bit of money after I got out college doing this. Again, the trick was all about grading the books based on the number of creases it had, staple strength, stress lines, paper quality, color, etc. Grading comics was part art, and part science. I bought books that were underpriced or undergraded and resold them. In my quest to find an "edge", and then refine that edge further, I'm drawing the conclusion that trading stocks is an art too. It is part science, and part art. I look at some "canned" technical indicators, maybe throw in some technical indicators that you yourself create, but in the end, I'm finding I need to make a judgement call to sort out the negative indicators vs. the positive indicators. I get a feel for which way it will go based on a bunch of parameters, rather than a few. Then, I bet big, with the idea that if I'm wrong, I'll take reasonable loss because my guess was wrong, and if I'm right, I let it run. So my question is, am I doing it wrong by being subjective? Is it part art and part science, or all science? I think I have an edge based on the art and the science combined. Should I try to eliminate the art of it...make it a simple algorithm? SM
no science alone is the key complicated to those who don't know simple once you know tricky overall rating
I know all about comic collecting/reselling, so I understand your point. However, the closest analogy is arbitrage, where you recognize and buy something undervalued on one market and flip it immediately to someone else for a (practically risk-free) profit on another. Trading relies far less on subjective assessment IMO, although you will find a deluge of TA books arguing the opposite. There was a statistics hacks book written by an avid comic collector with many analogies to comics within. You'd do better off studying his book and principles to understand successful trading. http://www.amazon.com/Statistics-Ha...=sr_1_3?ie=UTF8&s=books&qid=1247852448&sr=8-3
I agree that as an individual, there is an undefined "art" to the entire process and it helps to smooth the rigidness of technical analysis.