Tools being used by your trading competition

[howardbandy]

I am a scientist myself, and I still use it in my work, but I'm reformed to some degree. The scientific method has some very major weaknesses which rarely get mentioned, let alone discussed.

Hi GB --
Can you point me to discussion of the weaknesses of the scientific method?
Best, Howard

 

[Gringotts Bank]

Hi GB --
Can you point me to discussion of the weaknesses of the scientific method?
Best, Howard

On the smallest scale, what's 'out there' in the material world is a mass of waves/particles. We construct reality (our very own reality, shared by no one) by taking that stuff and filtering it with our expectations, beliefs and memories.

Science has a very hard time controlling for the effect of expectation and belief. We can't perceive things that are outside our beliefs, and we fully perceive things that others might say don't exist so long as we believe them. So what is real becomes almost impossible to define. All we can say is what's real for us.

"A fundamental conclusion of the new physics also acknowledges that the observer creates the reality. As observers, we are personally involved with the creation of our own reality. Physicists are being forced to admit that the universe is a “mental” construction. Pioneering physicist Sir James Jeans wrote: “The stream of knowledge is heading toward a non-mechanical reality; the universe begins to look more like a great thought than like a great machine. Mind no longer appears to be an accidental intruder into the realm of matter, we ought rather hail it as the creator and governor of the realm of matter. Get over it, and accept the inarguable conclusion. The universe is immaterial-mental and spiritual." (“The Mental Universe” ; Nature 436:29,2005) ~~R.C. Henry, Professor of Physics and Astronomy

This article is also quite good.

https://www.scientificamerican.com/...f-expectations-can-allow-you-to-bend-reality/

If you were to take your best trading system and teach it to 10 people, each would create their own very personal results. Some would do well, some would lose, some would lose heavily.

If you had 10 companies with the same fully automated system and same infrastructure, software, latency and all that, some would do much better than others.

 

[howardbandy]

On the smallest scale, what's 'out there' in the material world is a mass of waves/particles. We construct reality (our very own reality, shared by no one) by taking that stuff and filtering it with our expectations, beliefs and memories.

Are we discussing the same thing? The scientific method I am referring to is the technique of postulating models, followed by out-of-sample validation. This one:
https://en.wikipedia.org/wiki/Scientific_method
Best, Howard

 

[Gringotts Bank]

Are we discussing the same thing? The scientific method I am referring to is the technique of postulating models, followed by out-of-sample validation. This one:
https://en.wikipedia.org/wiki/Scientific_method
Best, Howard

Yes, science is a method of determining what is true (knowledge of fact). I'm saying facts are not possible to determine because for a fact to exist, there first has to be an individual mind in order to perceive it. As soon as the mind arises in an attempt to perceive, it carries all sorts of confounding factors such as expectation and belief.

If I hypnotize you to believe that the number 4 does not exist, you literally will not see it or know it. For the rest of us the number 4 exists and is real, but are we objective independent observers or were we hypnotized to believe it exists at an early age and just went along with it? Strange example, but it shows how subjective things are.

 

[howardbandy]

Yes, science is a method of determining what is true (knowledge of fact). I'm saying facts are not possible to determine because for a fact to exist, there first has to be an individual mind in order to perceive it. As soon as the mind arises in an attempt to perceive, it carries all sorts of confounding factors such as expectation and belief.

If I hypnotize you to believe that the number 4 does not exist, you literally will not see it or know it. For the rest of us the number 4 exists and is real, but are we objective independent observers or were we hypnotized to believe it exists at an early age and just went along with it? Strange example, but it shows how subjective things are.

In which case there is nothing but illusion -- we are imaginary creatures who live in a pseudo-reality created by the dream of some other entity. So much for free will.

How could we tell? What experiment could distinguish between being real and being imaginary? How should we plan and live our lives given the uncertainty? How does either help us buy and sell profitably?

Any statement asserted without evidence can be dismissed without evidence.

Best, Howard

 

[ThingyMajiggy]

Any statement asserted without evidence can be dismissed without evidence.

Mmmm...funny how it works the other way round

 

[howardbandy]

Mmmm...funny how it works the other way round

Not really. Wikipedia states it well: "Under modern interpretations, a scientific hypothesis must be falsifiable, implying that it is possible to identify a possible outcome of an experiment that conflicts with predictions deduced from the hypothesis; otherwise, the hypothesis cannot be meaningfully tested."

 

[skc]

Any statement asserted without evidence can be dismissed without evidence.

There is evidence.

 

[Gringotts Bank]

In which case there is nothing but illusion -- we are imaginary creatures who live in a pseudo-reality created by the dream of some other entity. So much for free will.

How could we tell? What experiment could distinguish between being real and being imaginary? How should we plan and live our lives given the uncertainty? How does either help us buy and sell profitably?

Any statement asserted without evidence can be dismissed without evidence.

Best, Howard

Many of the most prominent figures throughout history believe we live in an illusory matrix.

http://www.independent.co.uk/news/s...that-shows-choice-could-just-be-a7008181.html

Some say it's possible to break the illusion. Real people, not just movie actors.

Just carry on I guess...? Or perhaps try to manipulate the software of the mind to your advantage. There are primitive hunter-gatherers in the jungles of PNG who would completely deny the existence of advanced technology because it would be too threatening to their worldview. If you gave them a box of smart phones and demonstrated how to operate them, they would not even entertain the idea; instead they'd burn and bury them. We do the same thing in our own way. There are quite a number of sane, reasonable and intelligent people who claim to have broken the illusion but we wouldn't give them the time of day. It's too threatening.

https://www.theguardian.com/technol...usk-tesla-space-x-paypal-hyperloop-simulation

Howard you say "reality created by the dream of some other entity". But that's not the only possibility. It could be created by our true identity - an identity of which we are unaware. Then the work would be to drop the false identity, as suggested by non-dualist philosophies and religions.

 

[howardbandy]

Many of the most prominent figures throughout history believe we live in an illusory matrix.

IMO these thoughts would be better addressed in a philosophical / theological thread. Whatever reality actually is, I have no option other than treating what I experience as "the" reality.

Best, Howard

 

[ThingyMajiggy]

I have no option other than treating what I experience as "the" reality.

That reality being that you don't actually trade if I recall correctly, is that correct?

 

[howardbandy]

That reality being that you don't actually trade if I recall correctly, is that correct?

I do.

 

[Gringotts Bank]

IMO these thoughts would be better addressed in a philosophical / theological thread. Whatever reality actually is, I have no option other than treating what I experience as "the" reality.

Best, Howard

That's traditionally where such ideas are kept. But if such philosophies have any merit at all, then they will be applicable to all aspects of life, including trading.

I'm not critisizing your method of trading. I like it, use and promote it. Just saying there might be more to life than what we imagine.

You have a choice other than the one you mention. It is to treat the current reality as if it's a simulation. If there's a way to break through, then that would be the path. Unfortunately this is mere speculation on my part. But I do understand the theory very well - as well as you understand statistical analysis. And the theory seems very sound.

 

[Wysiwyg]

This is intriguing how we have come to this stage. It seems complexity doubles every 5-10 years. What is next?

http://www.priceactionlab.com/Blog/...short-equity-strategy-development-with-dlpal/

"Conclusion

The results in this article demonstrated at least two things:

(1) There is potential for significant edge in the indicators developed by DLPAL

(2) Long/short equity strategies have the potential of generating significant alpha during major stock market downtrends even if cost due to friction is high."

I spent many hours testing L/S strategies that switch on Index MA crosses and lo/behold they did exceptionally well during the GFC. Their conclusion is (1) a sales pitch (2) waiting for the next complete market destruction (potential).

Backtests mean little and this article is basic could have/should have stuff.

 

[tech/a]

People like Howard are experts in analysing data.
They have the ability to analyse data in a vast range of fields.

From medicine ( without being a Doctor or specialist )
For Engineering or Geology without building a single structure
A whole host of data anylists sent man to the moon
Probs to Mars, Jupiter, Astroids and beyond without leaving the
Planet.

Analysis of stock,futures or any other financial data is no different.

I'll bet the last thing employers who engage the services of the likes of Howard
Want to know is if they trade flown to the moon or cured a disease.

How's Pete's threads influenced your trading and search for something that works for you?
You don't need to follow the ideas of people like Howard.
Petes method doesn't.

 

[Newt]

Good post Tech. The "Market Wizard" series are the classic reference for showing how many ways there are to skin the market cat, albeit after generally many years of hard work.

The title of this thread quite disturbed me, but we're lucky to have someone with Howard's experience taking the time to post to remind us how the jungle is changing. I'd rather be concerned than ignorant. The reality is hard enough but shame to see this uncertainty upsetting people to the level of personal attacks.

All the effort we put into chasing down reliable profitability, but meanwhile that car is heading off down the road of increasingly complexity.

 

[Skate]

Quoting Dr Howard Bandy

“The business of trading is changing with astonishing speed. It is now about applied mathematics, machine learning, Bayesian statistics. Traders without skills in math, programming, statistical analysis, and scientifically developed trading techniques are at a severe disadvantage. Stephen and his colleagues will "eat the lunch" of unprepared traders”

Quoting Dr Tomasz Janeczko (Founder of Amibroker)

“In my opinion throwing more languages (like Python) into the mix just makes things harder, not easier, and is not really necessary as everything is doable within AmiBroker itself, but @howardbandy and others have other opinion. People have tendency to think in terms "more = better". But the truth is that in programming less is more. And less is better. So don't add complexity when it is not needed”

Quoting ThingyMajiggy

“Would love to see some evidence of the far superior method in action”

Quoting tech/a

“People like Howard are experts in analysing data. They have the ability to analyse data in a vast range of fields. From medicine ( without being a Doctor or specialist ) For Engineering or Geology without building a single structure A whole host of data anylists sent man to the moon Probs to Mars, Jupiter, Astroids and beyond without leaving the Planet”

Having a keen interest in the subject matter I would like to play the Devil's Advocate.

tech/a makes a disconnect between a data analysis and the end user of the data whereas Dr Howard Bandy has no disconnect, he is a "Data Analyst" and a "Trader" being in a unique position working both sides of the fence adding more weight to ThingyMajiggy reasonable request “to see some evidence of the far superior method in action”

I would like to hear from Dr Howard Bandy in regards to the comments made by Dr Tomasz Janeczko “In my opinion throwing more languages (like Python) into the mix just makes things harder, not easier, and is not really necessary as everything is doable within AmiBroker itself”

Dr Howard Bandy uses languages like Python, ML and AI while at the same time having a deep understanding of Amibroker Formula Language and as fence sitter I’m not fully convinced that either software has an advantage over the other but if there is I would like to see evidence.

My DISCLAIMER

I respect Dr Howard Bandy and Dr Tomasz Janeczko holding them both in high regards.

 

[tech/a]

Skate

Do you really believe amilanguage is on a par with the power of Python?

What is enough?

A propeller is enough to fly a plane
A jet engine is better.

I'll leave the rest to the quants.

 

[Skate]

"Skate - Do you really believe amilanguage is on a par with the power of Python?"

tech/a I'm a fence sitter - "I’m not fully convinced that either software has an advantage over the other but if there is I would like to see evidence".

Dr Tomasz Janeczko and Dr Howard Bandy have differing opinions which I both respect.

What is enough?
"Sometimes good enough is good enough"

Playing the Devil's Advocate again.
"Sometimes good enough is not good enough when better is expected"

A propeller is enough to fly a plane
A jet engine is better.

Great point - A jet engine is better - for commercial applications, whereas for individuals - A propeller is enough to fly a plane and What is enough? sometimes enough is enough.

tech/a to use your analogy a dingy is more responsive and maneuverable compared to an Ocean liner, so quoting Dr Tomasz Janeczko again:

"People have tendency to think in terms "more = better". But the truth is that in programming less is more. And less is better. So don't add complexity when it is not needed”

Holding my position
"Dr Howard Bandy uses languages like Python, ML and AI while at the same time having a deep understanding of Amibroker Formula Language and as fence sitter I’m not fully convinced that either software has an advantage over the other but if there is I would like to see evidence"

 

[tech/a]

When you say "see evidence" do you understand it's about capability.

Python is the broadly accepted language for scientific research in a wide variety of fields.
It's not a restricted language as ami language is.

The complexity you keep referring to shouldn't be confused with thoroughness in investigation.