Cutting Edge Methodologies.

[rols]

Forget about the systems, is it the method, the application of the method, or the applicant of the method ?

I would suggest that concentrating on the method is putting the cart before the horse.

Concentration should be foremost on the development of the applicant, for only when that task is completed then is he able to work on the application of the method.

Once he has mastered the application then the method will follow.

"It's very good jam," said the Queen.
"Well, I don't want any to-day, at any rate."
"You couldn't have it if you did want it," the Queen said. "The rule is jam tomorrow and jam yesterday but never jam to-day."
"It must come sometimes to "jam to-day,""Alice objected.
"No it can't," said the Queen. "It's jam every other day; to-day isn't any other day, you know."
"I don't understand you," said Alice. "It's dreadfully confusing."
Through the Looking Glass.

 

[Rhody Trader]

If the method and the system are good then it makes no difference who the applicant is, they should be able to follow it precisely.

The key difference between a good method and a bad one being clarity of the process. If the process is clearly defined and can have only one opinion, then how can the executor of the process fail?

Only if the system/method designer is unclear and unprecise.

You fail to consider the applicant's part in developing and/or choosing the method. It's not just in implementing a method that success or failure is determined. It starts with the selection of the method(s) employed.

 

[SOCRATES]

Verri interesting responses so far but I am verri verri bizzi...will comment later.

 

[Citizen2007]

"You fail to consider the applicant's part in developing and/or choosing the method. It's not just in implementing a method that success or failure is determined. It starts with the selection of the method(s) employed."

Iagree with your statement about choosing the right method, it has to compatible with ones personailty. But ultimately if the original method works under clear parameters that cannot be altered, and the applicant still fails, then it is questionable as to whether the method is followed correctly.

"Disagree - you can have a system that has generates great trades on paper but which still underperforms due to trading costs."

Yes that is possible, but then that is the fault of the system. The question is was it followed correctly by the applicant.

You can have extraordinary people executing a poor method with ordinary results. Or you can have ordinary people executing extraordinary methods for extraordinary results.

 

[Rhody Trader]

"You fail to consider the applicant's part in developing and/or choosing the method. It's not just in implementing a method that success or failure is determined. It starts with the selection of the method(s) employed."

Iagree with your statement about choosing the right method, it has to compatible with ones personailty. But ultimately if the original method works under clear parameters that cannot be altered, and the applicant still fails, then it is questionable as to whether the method is followed correctly.

Or whether the method was followed under the right circumstances. Any rigid method of the sort you outline basically makes assumptions about the conditions in which it is employed. A good method under one set of assumptions can be a disaster under another.

 

[Citizen2007]

Or whether the method was followed under the right circumstances. Any rigid method of the sort you outline basically makes assumptions about the conditions in which it is employed. A good method under one set of assumptions can be a disaster under another.

I am assuming that once the method has been completed, it has already taken into consideration these limiting factors and they are either within or outside the possibilties of
its results.

 

[ZDO]

Socrates,

I keep looking back to the first post to make sure the question mark is still there...

I very much appreciate you asking a question !!
As I always expected, it is an unparalleled doozy of a question.

Am traveling the rest of this week but will ponder this topic during transit...

All the best.

zdo

 

[SOCRATES]

I find all your replies and the diversity of opinions very interesting.

I wanted to post some comment earlier but was verri verri bizzi.

I still am, just look at the clock....

Let's see if I can play catch up with some of this...

 

[SOCRATES]

I fail to understand the distinction you are making between a method and a system. You seem to be saying a method is the "act of making a system function". Pressing the buttons when the system tells you to you mean? If so then what do you mean by "the application of the method". If method is pressing buttons then what does this further distinction refer to?

Perhaps I have misunderstood what you mean by "system". Some definitions would be helpful.

The pressing of buttons is not the solution, in fact it can be where the problem really starts because pressing a button is a physical act and not a mental act, which is what the physical action requires to underpin the decision to do so.

Since you appear to be confused about the difference between a method and a system I will do my best to explain the difference.

A car is a piece of machinery. It is constructed to fulfil a function. There may be other functions as well but the main function is to provide transport. We will just concentrate on this for the moment.

The car contains within it many bits of cleverlly thought out engineering bits.

But you don't have to be an engineer to drive a car, you have to be a good driver.

There are many kinds of driver, slow, moderate, fast, very fast and ultra fast.

Some are good and some are bad, and some are fantastic and some are terrible.

A very slow driver can be just as lethal as a very fast driver.

When you park the car it becomes an inert entity. This is because the car is not moving. it is static.

It will remain static if it remains parked there.

It is not going to move on its own, unless for example it is parked on a hill and the brakes are wonky, or not properly applied, for example.

But under normal circumstances that car will not move.

What I really mean is that it will not move on its own, of its own accord.

It needs more than it just existing for it to move.

it has to be made to move before it can move.

It happens to be a system, an inert system.

Now, the driver appears...he puts the key in the door and opens it..already something is happening...he now gets into the driver's seat..slams the door firmly shut...puts on the seat belt, adjusts the mirrors...looks around...and puts the key in the ignition.

some more has happened, hasn't it ?

Now the driver starts the engine, and it makes a roaring noise....and he depresses the clutch, engages gear...looks around again, indicates, lets go the handbrake and presses the accelerator and lifts the cluch...what happens? The car begins to move.

Something has been done to alter the state of the car from inert to active.

That something is intervention. Proactive human intervention.

Without proactive human intervention nothing can change, the car remains parked, there are no doors opening and closing on their own (unless it is haunted.. ) no seatbelts go clunk click there is no key present on its own to go into the ignition and there is no noise and furthermore there is no possiblility of movement, very sprcific movement being INTENTIONAL MOVEMENT, which is very different to accidental movement, like for example the car rolling down a hill..

So we can see from this simple example it seems to be a simple action but when broken down there are multiple things to think about and do to get a car to move, and to change its status from inert to proactive.

That is why there is a difference between a system and a method, and that is why there is a difference clearly showing a system is inert but a method is not.

A method may appear to be inert. You may be sitting in front of your screen and just put on a position. Someone walks into the room. They cannot know if you are doing something or not. It is not possible to detect if you are just looking or doing something. At that point in time ONLY YOU KNOW.

Only you know if you are just sitting there observing a system or whether you are using a method. Your visitor does not know and has to ask. Your reply QUALIFIES what it is you are doing. This qualification defines the difference that exists between a system and a method.

In getting into and driving a car it is immediately visible because it is physical.

In trading it is not immediately visible because it is not physical, it is the consequence of thought, which is invisible.

As thought is invisible, it is not possible to describe it from the point of view of an observer observing because it is not visible. If it were, it could be described easily, that is why.

 

[ducati998]

Soccy....

Scientific method is a body of techniques for investigating phenomena, acquiring new knowledge, or correcting and integrating previous knowledge. It is based on gathering observable, empirical and measurable evidence subject to specific principles of reasoning,[1] the collection of data through observation and experimentation, and the formulation and testing of hypotheses.[2]

System (from Latin systēma, in turn from Greek σύστημα systēma) is a set of entities, real or abstract, comprising a whole where each component interacts with or is related to at least one other component and they all serve a common objective. Any object which has no relation with any other element of the system is not part of that system but rather of the system environment. A subsystem then is a set of elements, which is a system itself, and a part of the whole system.

jog on
d998

 

[trendie]

Socco, are you saying its the driver, not the car?

there could be two cars identical in every way, and two drivers.
however, one driver has read the manual, or appreciates the engineering that makes up the car, and its inner functionings, in such a way that he can get more mileage out of the car by use of correct gear and optimum speed by understanding the nature of its engine, whereas the less trained/able driver just puts his foot down?

and the first driver can better negotiate bends and obstacles because of his understanding of tyres, brakes and suspension?

so, even if a set of rules can be given, there are still some elements that have to be "acquired" before trading improves. and these things ar a function of experience?

(I am leaving the Turtle method out of the equation for this thread, in order to see where this takes us)

NB: Turtle method was a technique famously taught to a group of traders in two weeks. (a second batch of recruits were taught in one week.) However, the factor that distinguished the winners and losers was the willingness not to tamper with the rules, and having the nerve (psychology) to continue trading even after many consecutive losses.

 

[A Dashing Blade]

All I'm seeing on this thread is a semantic discussion (how many synonyms do we know for "method") with (perhaps) a bit of quantum theory thrown in (ie the act of observing something changes that thing)

Clearly, at a conceptual level, you need a set of rules and a method/system/procedure of applying those rules.

 

[TWI]

Anyone who holds that a system can be so rigid as to totally take away the need for human interaction / intervention ever clearly hasn't designed / tested / put their own real dough into one

"ever" is a open ended term but I know that systems can run without intervention for extended periods of time. I have been through the entire process. Getting to the point of having this setup however is a long , long way down the road from having developed and started trading what on back test appears to be the holy grail.

As for the car analogy I imagine a lot depends on the driving instructor, whether you really understood the highway code and how much experience you have had driving in different conditions.

 

[Blu-Ray]

Excellent Post, Socrates !! ( and very true )

 

[toro168]

SOCRATES
"The truth is too precious to tell any fool who just happens to ask for it".

this is not true

 

[0007]

SOCRATES
"The truth is too precious to tell any fool who just happens to ask for it".

this is not true

Certainly is a contentious statement and even to begin discussion would require strict definitions of all the objects referred to.

Notwithstanding that, you can confront (tell?) many people with truth and they don't believe it. Even when they see it they may not believe it, even if they recognise it. Of course, what I see as truth (eg what I have personally satisfied myself to be correct to the best of my ability) may not be how you see it.

Perhaps this helps explain why, for any given instrument's price there are both buyers and sellers - presumably they both think they know the "truth"?

 

[SOCRATES]

In my opinion to win consistently, you need what is commonly refered to as an 'edge' by which I mean an advantage in the particular arena in which you are operating.

If you have a genuine edge then you will profit if you apply it properly, whatever 'apply it properly' means in terms of how your edge operates, for example, it may mean understand fully and believe in your method and therefor take all qualifying trades without deviation from the method, and hence profit over time.

As to whether it is the application or the applicant, proper application will come from (but needn't only come from) an applicant who understands intuitively the edge, and can apply it knowing it will work, hence someone who has no issue with the method and just gets on with it.

So, application is of course needed, but in reality, it is the skillful etc applicant who creates that application.

I am verri verri bizzi and I am trying to play catch up with this thread that so far is prompting very interesting responses, so I will try my best to respond as often as I can.

You make a very interesting point, and you describe the ultimate result or rather, the ultimate desired result, which is to seamlessly merge a method to a system by the application of a skill combined with thought to make the system function properly and reliably, which is what is ultimately required.

 

[SOCRATES]

the more I trade, the more I can relate to your last sentence, Socco.

I wonder if thats because while we are busy looking for systems, what actually happens is that we acquire an understanding of the markets behaviour without knowing it; through screen-watching.
this leads to "knowing" when a trade is going to work or not, and intuitively knowing when to take a trade or not. this can lead to two different people using the same "system" and getting different results.

Yes exactly but at this juncture I will not comment further so as not to divert the course of the discussion.

 

[toro168]

Certainly is a contentious statement and even to begin discussion would require strict definitions of all the objects referred to.

Notwithstanding that, you can confront (tell?) many people with truth and they don't believe it. Even when they see it they may not believe it, even if they recognise it. Of course, what I see as truth (eg what I have personally satisfied myself to be correct to the best of my ability) may not be how you see it.

Perhaps this helps explain why, for any given instrument's price there are both buyers and sellers - presumably they both think they know the "truth"?

i did not make the statement

 

[ducati998]

On these boards there are lots of discussions about systems.

Few realise that a system is an inert entity.

Nothing can happen until something is done with a system to make it function.

This act of making a system function is really a method.

There are many kinds of methods.

Some methods end up yielding failure, others not, some yield unreliable results and others end up yielding cutting edge success.

Forget about the systems, is it the method, the application of the method, or the applicant of the method ?

If you read the two provided definitions the following is logical;

A method is utilised in the building [design] of a trading system.
The system is the encompassment of multiple methods;

*instrument [stocks, futures, options, bonds.]
*directional/non-directional
*entry
*exit
*risk management
*expectancy

jog on
d998