Mike Kshemaraja
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Please articulate as much as you wish.
It's pure profit for the tiny few who are well connected.
I reckon 99% gamble. 0.2% trade according to foreknowledge. 0.8% trade with various degrees of real skills. It's a science for the gamblers. It's an art form for those with skills. It's pure profit for the tiny few who are well connected.
Art or Science ?
I guess science implies some objectivity whereas art implies more subjectivity and on that basis the aim may be for it to be as 'scientific' as possible - ie based on empirical evidence as opposed to anecdotal or casual observations and/or gut feel et. This said even from my trading's perspective there still exists an element of discretion (art ?) despite the rule based approach I have built my trading edge around. Keenly observed repeating set-ups over a very large sample coupled to the equally keenly observed repeating and as close to optimum chart conditions as possible for each set-up could be said to be a scientific approach but as stated above the discretyionary element can either add or subtract from the edge but with experience it is more likely to add to it.
If the question relates more to is trading a natural skill or can it be trained ? then the later is probably truer but that is not to say that certain personal attributes posessed by some maybe more suited to the profession than others and give the holders of such a better chance of success over those that have to learn them contrary to their natural urges/state.
G/L
Interestingly, Prem had not really seen this 'dirty end' of trading, which is a total discretionary art. Being an academic in the field, he was very interested. We talked at length afterwards and the aspect he seemed to like most was that it was trading based on understanding the market as opposed to mathematical derivatives. Prem has done a LOT of research into the technical aspect of the market and found no correlations between technical factors and future price behaviour. His experience is that you need to understand in order to be able to trade. I agree but I don't think you need to understand (or watch) everything that impacts the market. Analysis paralysis & all that. He does think that volume is key and you can see that reflected in his work.
On the other hand, Prem did find relationships between fundamental factors and longer term performance. I brought up IPOs & lock in periods and he had a wealth of information to hand on how that impacts prices.
Art or Science ?
I guess science implies some objectivity whereas art implies more subjectivity and on that basis the aim may be for it to be as 'scientific' as possible - ie based on empirical evidence as opposed to anecdotal or casual observations and/or gut feel et. This said even from my trading's perspective there still exists an element of discretion (art ?) despite the rule based approach I have built my trading edge around. Keenly observed repeating set-ups over a very large sample coupled to the equally keenly observed repeating and as close to optimum chart conditions as possible for each set-up could be said to be a scientific approach but as stated above the discretyionary element can either add or subtract from the edge but with experience it is more likely to add to it.
If the question relates more to is trading a natural skill or can it be trained ? then the later is probably truer but that is not to say that certain personal attributes posessed by some maybe more suited to the profession than others and give the holders of such a better chance of success over those that have to learn them contrary to their natural urges/state.
G/L
Dennis Richard says it all: "if it feels good; don't do it"
trading is against human instincts. Majority of the crowd lose because they follow their gut. If you want to win; you have to put 110% to it; and don't trade from guts.
assumption: guts = art
It's pure profit for the tiny few who are well connected.
BJ I must disagree. Most traders end up gambling because they don't put enough work in, anything less than 100% dedication, long hours studying direct markets (is there any other kind) is necessary to give yourself a chance. Imo it comes down to an individual having a certain level of intelligence, (not that high) and hours and hours of hard hard study and screentime. Most traders don't cut it because they totally underestimate what is required to make it. There are no short cuts. IMO the percentage would be 85% work ethic 5% luck 10% skills/temperament
When we are trading we have to learn on how to control the Emotions in trading. Only then we would be able to get a consistent level of Profits which is what every trader wants.
lol; many academics make the big mistake of trying to predict the price; then conclude that science does not cut it. another example is analysis of cycles using Fourier transforms; which has been tried for decades; since 1900s. it ain't work that way.
It is in their approach lies the problem; and not science itself. it's like trying to prove that chocolate biscuit does not orbit Jupiter. it might be true; but it is hard to prove.
Art or Science ?
I guess science implies some objectivity whereas art implies more subjectivity and on that basis the aim may be for it to be as 'scientific' as possible - ie based on empirical evidence as opposed to anecdotal or casual observations and/or gut feel et. This said even from my trading's perspective there still exists an element of discretion (art ?) despite the rule based approach I have built my trading edge around. Keenly observed repeating set-ups over a very large sample coupled to the equally keenly observed repeating and as close to optimum chart conditions as possible for each set-up could be said to be a scientific approach but as stated above the discretyionary element can either add or subtract from the edge but with experience it is more likely to add to it.
If the question relates more to is trading a natural skill or can it be trained ? then the later is probably truer but that is not to say that certain personal attributes posessed by some maybe more suited to the profession than others and give the holders of such a better chance of success over those that have to learn them contrary to their natural urges/state.
G/L
It's science and art used together. The science is math. The art is the method of training, your dedicated work ethic etc. you need both science and art to succeed.
I can see how you could come to that conclusion without knowing the guy. He's very grounded & doesn't have his head up his ass. He's also not isolated. For instance when I shoved a copy of "Trading and Exchanges" in front of Craig, Prem looked at the book and said "I know this guy".
This research isn't going in in isolation, either and at this level there are funds paying for advice from people like Prem.
Anyway, where we ended up was:
Prem - Phd, been researching this since the 80's - trades a discretionary approach
Dale - CPA, trader, ex Viet Vet- been through TA and back again - trades a discretionary approach
Pete (errrr... me) - Software Geek - trades a discretionary approach
Craig - furniture factory owner & furniture designer - paper trading but quite convinced a scientific approach will pay off.
The only person with an artistic bent is the only one convinced the sciences hold the key. The reason he is convinced that is because that's what he has been fed in books/da interweb.