Probability theory etc

This is a discussion on Probability theory etc within the General Trading Chat forums, part of the Reception category; Originally Posted by SAINT Too many variables to forecast the markets. The game changes all the time. If it were ...

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Old May 31, 2008, 6:57pm   #57
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Originally Posted by SAINT View Post
Too many variables to forecast the markets. The game changes all the time. If it were possible there would be no volatility either as everyone would be sitting around the bid offer and and you'd need a huge account to make any money.

The swings, the emotions, the curveballs,the joy, the despair, the challenge are what make the markets imo! Black box trading systems are the closest thing to academic forecasting for profit but as shown last year, when an unexpected event hits, the system gets blown out!
The Black Box turns into a Black Swan.
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Old Jun 1, 2008, 4:32pm   #58
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The biggest problem with all theories and math is that it takes one person to create the idea, another to interpret it and another to press the button. All of which may fail for different reasons. I used to argue vigorously on a variety of points but even if you have valid ideas people still rubbish them so I just get on with it now. Everybody can read about it in the autobiography Identifying a great idea generally requires an element of modelling, implementing it successfully an element of psychology.
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Old Jun 1, 2008, 6:27pm   #59
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Originally Posted by grantx View Post

Apologies for the delay in acknowledgement.

I couldn't give your excellent post a rep ('spread it around', etc). So, "Reputation" for RW's post, #51. Oh, don't start whingeing Mr Gecko, you can have one as well ('kin 'ell).
Grant, thank you for for kind words.


“he uses empiricism a argue the metaphysical absoluteness of randomness.” He does call himself an Epistemological something or other. I’d like to see him incorporate philosophy of mathematics/numbers – that would interesting. But it’s probably too mainstream for him.
Hope you don't mind me saying so, but I don't think the philosophy of mathematics has that much to do with it. If one tries to make sense of what Taleb seems to want to say, that book has already been written - in the context of academic philosophy. Popper deals with it in his Postcript to the Logic of Scientific Discovery, where he argues the case for indeterminism and also introduces his propensity interpretation of probability. He even uses a similar example to the theory that all swans are white: "all dogs have tails". For some reason, that book is not on the list of Popper references at the end of FBR...

I think, like Soros, that epistemology, in particular Popper's philosophy, is highly relevant for trading. In essence, trading is an epistemological undertaking, evidenced also by many threads on this site.

If you are interested in the philosophy of mathematics, the outstanding book imho is The Mathematical Experience (Penguin Press Science): Philip J. Davis, Reuben Hersh: Books

Very accessible to the general public as well.

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Old Jun 1, 2008, 7:43pm   #60
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Didn't Copleston say something about Black Swan's (and Pink elephants IIRC), in the context
of the Ontological argument?

I say this only to fit in; R.W. I haven't got a f*cking clue what you are on about.
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Old Jun 1, 2008, 9:46pm   #61
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On a non-philosophical and academic level, Popper was always an outsider, a maverick and a reactionary in that he was constantly rebelling against what he regarded as mainstream, Marxist bias in academia (post-revolutionary Russia). Hence his rejection of the Vienna Circle (Wittgenstein, etc) but probably more accurately, they didnít want him in. His reactionary side is apparent in The Open Society and Its Enemies (against Plato and Marx, for example)

I donít think I read Logic of Scientific Discovery so Iím not familiar with the Postscript (was this an afterthought, revision or correction?) but I did read Conjectures and Refutations in the context of Philosophy of Science.

Re his use of swans, this originated with Hume in the 18th century in the context of the limitations of inductive logic but more importantly, an attempt by Hume to give intellectual legitimacy to the Churchís (Bishop Berkeleyís) opposition to Newtonís science, specifically that the earth is not the centre of the universe Ė contrary to the basic tenet of Christian belief. Like Hume, Popper was not concerned with the rationalism or justification of the physical sciences but with the foundations of belief in the social sciences (or theology); and for Popper, this centred on Marxism.

The irony is, Popper found widespread support in the 1960ís from the French left-wing, social science academics, especially sociologists.

For me, Taleb compounds ambiguity with half-baked theories derived from half-baked thinkers.

Thanks for the reference. Iíve only read Frege (impenetrable).

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Old Jun 1, 2008, 10:35pm   #62
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Post Re: Probability theory etc

Originally Posted by grantx View Post

Iíd like to see him incorporate philosophy of mathematics/numbers Ė that would interesting. But itís probably too mainstream for him.

taleb has a website with several of his papers. some of them are little more than equations - not really general public stuff unlike his books.

look at lesson 6 as an eg.

Mathematical and Quantitative Papers
hope is not a strategy
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Old Jun 1, 2008, 11:31pm   #63
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Mr ($2) Gecko,

You could be right re Copleston. He did a history of philosophy series - 5-6 volumes. I've got volume 2 dealing with mediaeval philosophy, which is basically European theological beliefs (Platonists and Aristotelians) with regard to the Christian fathers. So your "Ontological" point should be in here.I'll check your reference.


Thanks for the reference. I'll look at these but may have to come back re clarifiaction of anything "quanty".
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