It is much less complicated and more precise than Elliott Wave whereas almost as complete although I have to do some more research about time. It's just a question of ... time because I have already a great idea about the direction of the research I have to follow. In (scientific) research when you know the direction it is like in trading when you know the trend it is much easier to do the job .
traders who put their hopes in science forget that explanation and prediction are not the same thing at all... as a wise venture capitalist once said, 'there's really no such thing as a unique idea, and 'good' ideas are a dime a dozen. it's the execution that counts.' remember when Larry Bird schooled his defender in that famous playoff game? He looked him in the eye and said something like, "First I'm going to move here, then I'm going to move there, and then I'm going to shoot in your face." And then he did it. trying to predict the unpredictable is like being that defender. The universe just smirks at you and says "first I'm going to move here, then I'm going to move there..." the game will always be the same- cycles of opportunity following cycles of drought, brief pockets of clarity amid vast pools of uncertainty, a time to sow and a time to reap. those who manage their risk will (mostly) survive, and those who don't will (all) go down in flames. the basic method for success will always be the same too, in trading and in business and in life: starting small and stacking up your commitment like haybales as things progress. lay down two bales, a third on the back row and a fourth on the ground in front. repeat process in logical manner, stair stepping one bale at a time, until you've finally created your mountain and climbed it in the process. (by the way, i didn't mean to get on a soapbox here; it's the middle of the night, i can't sleep, and i'm bored.)
Trading is a Business except if you're doing it as a hobby. Business implies Planning, Planning implies some Prediction methods. You can use more or less sophisticated methods it will depend on the needs and capabilities of your business. It could just be a model based on experience that has been transformed into a framework or it could be a more sophisticated and robust model which is basically what scientific means. A business without planning won't last long... >as a wise venture capitalist once said, 'there's really no such >thing as a unique idea, and 'good' ideas are a dime a dozen. it's >the execution that counts.' And execution success depends for 80% on Preparation that is to say planning above. The man who is the best well-known guru of Quality Management - who is Edwards Deming - has created the Universal Wheel (or Spiral) of progress known under the acronym PDCA: Plan Do Check Action (meaning Correction). As you can see Plan is the first step. Saying that "it's the execution that counts." is a lapalissade. What counts is a good execution and if we are discussing about how to have good execution we have to look for methodology and then methodology will answer: planning and this would imply prediction. Those who pretend to use signals only and not try to forecast the market are just fooling themselves: by market's efficient theory there is no possible signal since every signal should be considered as blank noise. So if there is a potential signal it means a prediction can be done even if it is fuzzy it is still a prediction for example about the market's direction.
For Babak: When talking about simplicity people often quotes Einstein who says: "Everything should be made as simple as possible, but not simpler." What is amusing is that they often only refer to the first clause of his phrase whereas there is TWO clauses and a grammatical CONJUNCTION OF COORDINATION between the two which means that the important clause is the second and not the first one: "BUT NOT SIMPLER" is more important clause than the first one. So Einstein rather means "DON'T SIMPLIFY TOO MUCH WHEN IT IS NOT POSSIBLE" the market is complex it is not possible to overreduce its complexity P.S.: wasn't that subtle
The essence of Science is not about calculation, it is about dealing with Hypothesis. You can apply scientific framework to anything even to trading. In industry this is called engineering. Read for example the classic of all classics Science and Hypothesis by Henri Poincare Condition: Standard This title ships for free on qualified orders! Find out how. ISBN: 0486602214 Author: Poincare, Henri Publisher: Dover Publications, Inc. Subject: Science Subject: Philosophy & Social Aspects Subject: General Subject: General science Subject: Philosophy Publication Date: December 1952 Binding: Paperback Language: English Dimensions: 8.02x5.45x.54 in. .62 lbs. http://www.powells.com/cgi-bin/biblio?inkey=4-0486602214-1
which is, umm, exactly what guys like Sornette are trying to do when they move from explanation to prediction- throwing meaningless complexity at a complex problem with efforts that result in, drumroll please, observations that no one can apply and soundbites that few can understand trying to crack the markets with heavy math is going in the wrong direction imho. there are occasional instances when things are crystal clear- and more instances where things are clear enough to warrant taking on at least a little risk. but when those pockets of clarity come about, they are simple and logical and, while maybe it's not semantically correct, it's more conceptually accurate to say smart trading decisions are less about 'prediction' and more about 'experience' and 'common sense'. speaking as a guy who is not exactly dumb, i think smart people can frequently be their own worst enemy. they think that it would be a shame to let all that God given brain power go to waste, so they try too hard to apply it in every situation and walk right past the answer on their way to the chalkboard. they are too obsessed with milking the asset between their ears and thus they overlook the elegant and simple solution, like Poe's purloined letter sitting right out in the middle of the room. guys like Sornette are greedy. they don't want to have occasional clarity, they want to crack the whole code. it's like yo, i don't just want to know the best way to catch fish, i want to figure out how to know where all the fish in the ocean are at this exact moment right NOW. No can do- too much science, not enough common sense. Some weird kind of 'gee i wish i were omnisicient' complex . I wonder if psychologists have a term for it. p.s. how about a new term for the trader's lexicon- science porn: slick, glossy, obscenely sexy material detailing rocket science type attempts to 'crack the market code', usually involving wacky math, PhD concepts, or archaic thousand year old formulas having something to do with geometric angles or Mayan rituals. Science porn addicts, like regular porn addicts, spend most of their time masturbating over fantasies. Diddler Sornette? (Maybe I'm being too harsh on the guy, but he's more of an example of this type of thinking than a specific target.)
?!? Sornette's model is relatively simple and its derived from the math of spreading activation, minority games etc... From what I could understand of the book, it has a good conceptulal foundation and the model is fairly simple, no danger of overfitting to past data etc... (its simple, meaning it has few variables not simple to understand). There seems to be a big link between Sornette's model and Gann who was squaring time and price and drawing angles off of that. Sornette's model begins with the power law function which is what you get when you square time and price.
All one has to do is to draw few trendlines ( beside knowledge of your market of choice ) to be more accurate in all time frames then all those certified complicators from universities around the world . They cannot do anything meaningful on shorter time frame then yearly . Walter
I don't understand why gann always must come into the picture. Drawing nice angles, fans, wheels, square off charts and shamelessly adjusting the scales of his chart so everytime is picture perfect, IS NOT EXACTLY minority games and math of spreading activation. wouldn't you agree? We are talking about science, not astrology? are we not? Please don't be so ignorant to group Gann and Sornette, While it does have the effect of giving a new polish to gann's crappy methods, It might just put someone off reading Sornette. p.s. you are not one of those MurreyMath guys? huh?