I read the posts on this thread; they do not deal much with trading. I look at the market and making money as a pragmatic thing. Wealth is just a practical matter. I feel very lucky to be educated properly for making money in the markets. As an engineer (EE) in undergraduate stuff and in theoretical physics on a professional level (meaning beyond a College BS degree), I was trained to think. IBM sponsored unlimited education as a mechanism to attain an edge. So I self educated myself in making money using the strengths of my formal education. Hermetically speaking, the constructs required are not very ambitious. Science is not very adaptable to the creation of wealth just using markets where peole participate in dealing with paper entities like contracts and shares of stock. The maths are a breese and staying focussed on the goal of making money certainly makes it uncomplicated. Fortunately, my alma mater had a great motto: Knowledge and Thoroughness. si with training to define and solve problems, the market and making money in it are not difficult. Their is no requirement for precision and the simple collection of tools the market uses in the market place makes it all very easy and uncomplicated. I use, pragmatically, the essence of stuff I learned in math and science. The market is not a "continuous" anything. So all the vaste collection of math and science simply do not apply rigorously. But there are really super areas of continuity. I think the most fundamental mathematical equation one ever has to deal with is optimizing making money using the compound interest formula which, does not even come from the scientific community Most people here demonstrate that they cannot utilize the formula to get to a place of having any degree of money velocity. I am focussed on how to conduct the compromizing of maximizing profits per cycle while abreviating the cycle time as much as possible. It certainly does not commence with optimization at all. I like the educational background I have because it allowed me so many years of invention. The inventions I use that I like the best are: 1. Using the P, V relation. I tested it with all price formation to validate it. I added a corrolary for steady state volume. To day i wouldn't buy any book that had less effort on the volume variable than the price variable. It isas simple as learning in science that you have to include all the variables of the system if you are going to operate the system or make any use of it. Price only people turn out to be non-scientific twits who severly limit the use of their minds. This is a blunder (not using the variables of the system) that scientists would call a blunder of the first order of magnitude. LOL. I adapted a Jokari window to represent the P,V relation. A lissajous pattern (P:V , 1:2) emerges from the four cells. This cyclic representation is easy to characterize during the day as well as a means of monitoring and making timely decisions 2. Figuring out the periodicity of the market for trading cycle purposes. Natually we are bound to the compound interest formula. I use the "yellow brick road" to consider how much money can be made over time with due regard to the market effeiciency and my effeciency. I choose 6 to 8 day cycles for equities and 3 to 5 trades a day for commodities futures indexes. Because of leveraging (an economic term) my money velocity in equities is 1:50 compared to commodities. 3. I liked inventing scoring using P, V and A/D. It involved ranking the importance of the variable in a power series and their coefficients. I chose the least extreme system of numeration (binary). From least signifiacant to most the three variables are A/D, V. and P. So a 1 or 0 is assigned to the binary performance of each. Up and Down work for P and V and A is 1 and D is 0. The elegance of scoring is uncommon as a mathematical experience. The cycle, over time counts down. 7, 6, 5, 4, 3, 2, 1, 0, and repeat. The change at trough and peak requires all variables to change value. 0 to 7 is the trough 4 to 3 is the peak. The whole sequence is perfectly symmetric. A mathematical elegance to be sure. The most profound answers come from this invention. I have, always the answers to: Where am I in the money making cycle? What is next? and How fast is the cycle moving? 4. The above three led me to the realization of something very important. All of science and math that relates to nature is a descriptive process of how things work to the extent necessary to utilize them and no more. This is a definition of efficiency. Things work efficiently if you know well enough how they work. So I simply discarded the requirement for prediction as an element in making money. Pragmatically, I went to the places where the market tells me money is made the fastest for a given efficiency of operation ( the market on one hand and me on the other) and I continually take up the collection as the product, profits, flow forth. 5. For making money, I use an engineering principle of mass production: namely interchangeable parts. I do not make the equities so I just determine the identity I want in my single kind of part that I need to fit into my machine for making money. The markets are examined by a lot of people from a macro point of view. The âBiggeringâ thing found in the Lorax by Dr Seuss. His concept is not valid for making money. The macro orientation is ingrained in PhDâs it turns out. Pragmatically I am looking for parts that fit intechangablt and I never ever have any need to know about all parts nor do I need to have any precicion beyond being he most effective in doing what I do. ( I do only three things it turns out). âSmall is Beautifulâ, a book by the twin of Bucky Fuller with whom I worked for three years, is where itâs at. ( E. F. Schumacher). So I invented the maths for culling stocks into a universe. Later when CANSLIM was in vented I started using it by sorting by the scores of item 3. The seven equations sort 0âs, 7âs and 1âs For an equity to be owned by me, it has to show repeatability of performance. I do cycles; all the stocks have to meet a cycling criteria after the maths sort them into a micro universe. My universe guarantees me a money velocity that is as good as the market at large can produce by its top quality performers. My engineering skills allowed me easily to describe the performance of stocks as they get ready to end their down cycle, poise, and begin their upward cycle. You can see I choose parts (equities) that are interchangeable in the context of the three essential questions of 3. 6. Making it all mechanical. This was done with software. Three elements are involved: rotating capital through cycles of performance. Anticipating each cycle for a small universe of stocks ( wait, buy, hold, sell). And monitoring using the Jokari matrix and a system of indicators and their respective signals which form sequences. I use the occurrence of flaws to assure that I max out my money velocity at all times. Any flaw means that the interchangeable part is not performing. that is engineering talk for sure.. 7. Transference is my test of efficacy. I find out how well what I do works by how well others can do it. This is a scientific thing. So much for the first half. The Hermetic Principle is metaphysical and provides the connection between the halves. Since this thread is not comprehensive the other half can be responded to when it comes up somewhere else. I am the other half and NLP governs that.
Uh, yeah, me too.... I like eSignal, kinda does all those widgets for me.... Then I just point, click, wait and ca-chingoooo....
The topic is science, meta-physics and trading... I don't think I wrote market... People tend to see market and trading as the same thing... Understandable but I would have put: "Science and Market" It's "Science, Meta-physics, and Trading" It's a nice thread but let's look into how we elaborate, understand, and interpret science, meta-physics (philosophy or theology), and the market. The common process of perception and perspective of them should be a good place to start talking about trading. Thank you for the great post Commisso...
Another post to put the thread back into perspective... Science is a rather definite topic with quantative nature. I think the market has a similar nature. Still, science is also moving into the qualitative aspects of nature. I agree with that with the market... Application of science is the same as traders trading the market... Can anyone expand on these thoughts...
gann, yes. trading is application, market analysis is thought/ creation/ formulation of perspective. excellent post ! best, surfer
Sayt Chaoisity said : "ancient "wisdom" my ass. and just how did "they" arrive at this "ancient wisdom"? divine inspiration? perhaps they were born wise? or this 'wisdom" came to them in a dream? " Many, many discoveries by scientists have been made 'out of the blue' rather than by logic. Some wake up in the morning and the problem has been solved - overnight. Others get insight via a flash of inspiration. , coming from nowhere. Logic, rational thought, or scientific method and all such other goodies often haven't played a part. How the heck did mankind get the knowledge of acupuncture (points)? Science tells us that there is no such thing as meridians yet the theory works and acupuncture no longer is hocus pocus and is respectable now. How could the ancient Greeks possbly come to predict the existence of the atom around 500 BC ? (They named the predicted particle 'atomos,' meaning "indivisible.") Yeh, I know that today every schoolboy knows about it but the question remains. The idea that there is such a thing like a mastermind into which one can tap suddenly doesn't seem to be a bad model to explain where most of mankind's knowledge comes from. freealways