my journal 2

[Yamato]

efficient frontier

Today I moved on to the "efficient frontier", because I found a chart of it on the second chapter of Bernstein's intelligent asset allocator book:
CHAPTER TWO



But then you go on wikipedia and read the word "hyperbola", which is not the same as "hyperbole":
Efficient Frontier - Wikipedia, the free encyclopedia

Efficient Frontier. The hyperbola is sometimes referred to as the 'Markowitz Bullet', and its upward sloped portion is the efficient frontier if no risk-free asset is available. With a risk-free asset, the straight line is the efficient frontier.

And I could not let it rest, but had to find out what it is:
Hyperbola - Wikipedia, the free encyclopedia

But then... it looks like a parabola:

The word "hyperbola" derives from the Greek ὑπερβολή, meaning "over-thrown" or "excessive", from which the English term hyperbole also derives. The term hyperbola is believed to have been coined by Apollonius of Perga (ca. 262 BC–ca. 190 BC) in his definitive work on the conic sections, the Conics. For comparison, the other two general conic sections, the ellipse and the parabola, derive from the corresponding Greek words for "deficient" and "comparable"; these terms may refer to the eccentricity of these curves, which is greater than one (hyperbola), less than one (ellipse) and exactly one (parabola), respectively.

So I had to search more and found this:
Difference Between Parabola and Hyperbola | Difference Between

But it wasn't enough and... major sidetracking. I could not let this ignorance be, and I went on download.com and downloaded a graphing calculator to delve deeper into the matter:
Graph - Free software downloads and software reviews - CNET Download.com

And this is excellent, but... major sidetracking. Not procrastination, but sidetracking. That's the mother ****er, who blamed me and called me "lazy" and similar, too many times in my life. Ever since then, if there's a question mark anywhere, I have to prove that I am not lazy. I cannot leave any questions unanswered nor any problems unsolved.

As we go down life's lonesome highway,
Seems the hardest thing to do
Is to find a friend or two
That helping hand,
Someone who understands,
When you feel you lost your way,
You've got someone there to say:
I'll show you

That's how he succeeded in making me a compulsive mother ****er. That's why I have 332 friends and counting. I'll "befriend" anything that moves. I can't stop befriending, I can't stop searching, I can't stop wondering, I can't stop posting, I can't stop. That word "lazy" echoes in my mind, and makes me a compulsive worker, which is counter-productive. His relentless criticism still echoes in my head, in my subconscious, decades later, and I fight it off by working harder and harder, and... it has to stop. I can't keep going like this. I am not focused on one thing, on what I should be focusing.

If I keep trying on doing everything, on being a writer, a singer, a moviemaker, a collector, a trader, a mathematician... I'll fail at everything. I need to focus on math now, figure out the portfolio theory, trade again, quit my job, and only then move on to other subjects. This compulsive work has not lead to anything yet. It's got to stop before it's too late.

And I have to stop posting on my journal every single thought I have and stop documenting every single step forward I make. I can skip some steps. I'll have to, or this will take forever. This reasoning out loud here. But it was useful when I was getting started on math again. I wouldn't have done it otherwise. I'll come back in case I get stuck on something again.

 

[Yamato]

Whether you are near or yonder
Whether you are false or true
Whether you remain or wander
I'm growing fonder of you

Even if your friends forsake you
Even if you don't succeed
Wouldn't I be glad to take you
Give you the break you need...

 

[Yamato]

meet the parents - trailer - recut

Great job:

Meet the Parents Re-Cut - YouTube

It's all about the music you choose.

 

[Yamato]

Nobody seems to be commenting any more. Why is that?

I've been ruminating on your post of 3 days ago, and it was definitely a rhetorical question: you didn't want to know my opinion, but wanted to highlight the fact that no one was posting any more. This is not a certainty, all right, but my confident 90% estimate. There's a high risk that it was not a real question, wondering about what I thought, and I cannot take any more chances, as your post was definitely disturbing to me, so disturbing that I'm still thinking about it.

I couple it with bbmac's last post before being placed on my ignore list, the one where he said something like: "now that you failed yet another time, one wonders if you will find any investors ever again", which was total bull****, a misrepresentation of reality to discredit me, and yet it was nonetheless discouraging. Yours sounds like a pleased realization and reminder to me that people are not interested in what I write anymore. All in all, it bothers me, I can't afford to read another comment like that one, so, like bbmac, I will ban you, temporarily, from this journal.

Sorry, but right now I cannot take any risks of being distracted and/or demoralized by people. There's now a tangible risk for me of never making it, and if I want to keep writing this journal, I have to avoid anything that might interfere with my mood and ability to work and think out loud on my journal. And I cannot do that, if I keep fearing hostile posts popping up at any time. So I prefer no feedback than disturbing feedback.

 

[Yamato]

Modern portfolio theory, 1950 to date

Reading this paper:
http://pages.stern.nyu.edu/~eelton/papers/97-dec.pdf

They say, on page 3 of the paper:

Thus, we will concentrate on mean variance portfolio theory.

Why is it called like that?
mean variance portfolio theory - Google Search

Here's 3 more papers I'll have to print and read:
http://www.math.ust.hk/~maykwok/courses/ma362/Topic2.pdf
http://sma.epfl.ch/~eisenbra/OptInFinance/Slides/Oct-14.pdf
http://flash.lakeheadu.ca/~pgreg/assignments/3019chapter5_w05n.pdf

I'll also have to investigate about the authors and their web sites. Those three books are no bull**** and all formulas and therefore I have to read them, even though right now they're totally beyond my reach, due to my ignorance on formula notation.

 

[Yamato]

http://en.wikipedia.org/wiki/Empire_of_the_Sun

Christian Bale as Jim Graham - Making of Empire of the Sun Part 1 - YouTube

Fascinating...

 

[Yamato]

quality readings on portfolio theory

After reading a few dozens pages here and there, and after years spent researching and downloading on the subject, even though superficially, I have managed to narrow it all down to these two theory branches, in a descending order of quality and simplicity:

1) Bibliography and concepts provided by chapter 6 of "Chan, Ernest P. Quantitative Trading; How to Build Your Own Algorithmic Trading Business".

2) Bibliography and concepts provided by:
http://pages.stern.nyu.edu/~eelton/papers/97-dec.pdf

That's it. That's all there is to read about this subject to master it. And if I had to narrow it down to one chapter of one book, that would be just chapter 6 of Chan's book. The problem is that the language ("mathematical notation") is still pretty unknown to me. The concepts and ingredients are much clearer though.

Chan is much closer to my problem than Elton and Gruber are, and he mentions a formula that uses Kelly criterion together with Sharpe ratio. Elton and Gruber, from the little bit I understood so far, use Markowitz and Sharpe ratio. They're not saying the same exact things for sure.

Also, Chan is much more practical than the other two, who, as all academics, are busy showing off their knowledge and research, whereas Chan wants to get the job done. However, he is still not practical enough for me, but so far the most practical author I have found, given that his theory are formulas and are univocal and scientific (no rule-of-thumb crap - too easy otherwise to be quick).

If I ever get to the bottom of this, and if I do not give up before, it will take me months and I don't know how and when this will be accomplished. But this is the ideal time to be in such a situation, because at the moment I have no capital to invest and don't know when I'll get it. Since I have no capital, I have no real deadline, so I could keep on studying this forever. Of course at the same time it also makes me feel desperate (but not desperate enough to give up), especially considering there's people who have my systems right now, and can do anything they want with them, and maybe as a consequence, these systems will stop working. However, using them without a well planned and automated portfolio selection would be unwise for me. What I am saying basically is that in the past I made the big mistake of giving my systems, out of despair, to people, but right now the best thing I can do is to not rush, and wait until I have figured this thing out. Being in a rush to invest is usually not a good thing. Furthermore, my conscience is clean, I like to keep it that way, and I can't do anything to prevent people from acting otherwise. So I will keep doing my best, without worrying about what anyone else is doing, and hopefully something good will come out of this long lasting endeavor.

I am going to keep doing my best, keep moving forward, and also relax, because that's the only way to get through the barbed wire that these formulas represent to me. (It's almost as if the author said "let's place some barbed wire here to stop travis"). I am not going to panic, and I am not going to turn around when I find barbed wire formulas ahead of me, like I have often done in the past.

 

[Yamato]

"math made fun" campaign

The hardest stumbling block is math though, and mostly that means mathematical notation. If I can get through that, then I can easily get through any portfolio theory.

So this means I have to brainwash myself if you will, and try to radically change my attitude to math, one of fear.

So I am going to google:
math made fun - Google Search

I am sure I am not the only one with this problem (but probably the others are in their teens), and that I'll find plenty of resources.

Then it won't really matter what subject these "math made fun" web sites make me cover, because I just have to become extremely confident with math. That's all.

There's going to be two types of web sites: collections of links and individual web sites. I will start my search here and later I'll keep going on my own, off the journal.

web sites with links:
Math Made Fun Online | LocalPages
A Catalog of Mathematics Resources on WWW and the Internet
Online math resources list from HomeschoolMath.net.
Problem solving, word problems, and math projects online

math made fun web sites:
Math is Fun - Maths Resources
Cool Math - free online cool math lessons, cool math games & apps, fun math activities, pre-algebra, algebra, precalculus
Math Fun Facts!
Math Playground - Online Math Games that Give Your Brain a Workout
Math.com Math Practice
Interactive Multimedia Math Resources - Free Math Lessons and Tutorials Resources Online

Ok, that's enough. Now I'll start playing, and I'll keep doing it every day.

 

[Yamato]

googling "online math exercises"

Actually what works best with me is exercises with the answers. That's the type of challenge that works best, and for this a better search is:
online math exercises - Google Search

There's not likely to be a web page with links for exercises (if I find it, I will post it), so I will focus on individual web sites:
Challenge Exercises: Probability Theory
An Introduction to Math Probability (with worked solutions & videos)
Interactive Math Exercises
Free math courses online with math exercises, math problems and a graph plotter
http://wcreelman.wikispaces.com/MathResources

Oh, wow... very good online graphing calculator here (best I've found so far):
Graphing Calculator
Can't use it that much yet, but I can tell it's good.

I have enough on my hands: 1) first comes math, 2) then comes the portfolio theory. With one exception: if I ever get bored with math i will start reading up on portfolio, and viceversa. But as a rule math comes first.

 

[Yamato]

going slowly, but moving forward

I have done 3 exercises out of 10 on this page, and so far I was right on all of them:
Challenge Exercises: Probability Theory

Not easy at all. Probability is tricky. At least for a non-math person. But I will become a math person. Soon.

I can do it. I am good at obsessing about things. If I can just get to obsess about this thing, I can make it happen.

Tomorrow I will do the rest of the exercises. This is the way to go for me. Mother ****ing portfolio barbed wire formulas will come last.

 

[Yamato]

more wisdom, growing in my head, about math

You know... in the past I have often thought like this: if there was something I didn't understand in a math book, or a formula, I just gave up and said "**** this" and "the hell with these mother ****ers". But that's not the way I should have gone about it.

For example, if you are studying german or english or whatever, and I have learned a lot of languages already, your approach is never one where you say "hell, I don't understand one sentence in the movie, so screw the movie", or "I don't understand one word in this article, so screw the article".

And lately, as I've learned vba and easylanguage, i haven't used that approach either. So maybe now I am ready to take it one step further and apply it to math, and say that it's ok if I do not understand a part of what they're saying, so long as I understand the large majority of it and i do not feel lost. Cuz you know I am a perfectionist, and my tendency would indeed be to either have something done perfectly, and throw it out of the window. But for some reason this never applied to my learning of foreign languages, and math is definitely a foreign language.

So why is it that when you're doing math, you assume that you either understand everything or "the hell with it"? I guess because that's the way it should be with math, where all things are tightly connected together... because it is indeed true that if you do not understand at least 90% of a math chapter, you can't move forward. Whereas with foreign languages it is different... but not too different - you see, maybe the biggest difference is that I've spent years of efforts trying to learn english, and yet I expected to be born knowing and understanding math. Because yeah, you feel like it should all be logical and it should not need studying. Because that's the way those mother ****ing math geniuses make it look like. But maybe they're just a bunch of jerks who spent years studying it and now pretend they were born with that knowledge. Partly it's true and partly it's not. They're gifted but they also worked their asses off.

Anyway, screw the math geniuses.

If you really think about it, this pondering comes down to the nature of languages. What is a language? What is the difference between the mathematical language and the english language? I am not going to be an academic about it, but there's some mother ****ing difference of course, and some mother ****ing nuances that i don't get.

Anyway, here's some interesting stuff from wikipedia about it, about the birth of mathematical notation (which is part of my problem):
Mathematics - Wikipedia, the free encyclopedia

Most of the mathematical notation in use today was not invented until the 16th century.[24] Before that, mathematics was written out in words, a painstaking process that limited mathematical discovery.[25] Euler (1707–1783) was responsible for many of the notations in use today. Modern notation makes mathematics much easier for the professional, but beginners often find it daunting. It is extremely compressed: a few symbols contain a great deal of information. Like musical notation, modern mathematical notation has a strict syntax (which to a limited extent varies from author to author and from discipline to discipline) and encodes information that would be difficult to write in any other way.

Mathematical language can be difficult to understand for beginners. Words such as or and only have more precise meanings than in everyday speech...

See what I am talking about? No wonder it's hard. It's almost as hard as musical notation. Thank god I don't have to study that, too. Wikipedia rules, as always.

Let's check out this euler **** sucker, who invented mathematical notation.

I like this guy already. Just one minute of youtube makes me like anyone. The same happened with pascal and the rest of them. Yes, he invented mathematical notation, but maybe i'll like formulas better now.

Oh, wow. Look what I came across, "The Story of Maths - BBC Documentary":

I hadn't explored this branch yet. This will make it more interesting for me. Learning it little by little, in a fascinating way. I will watch the whole thing in the coming days.

Awesome. Hours and hours of light material on maths, easy to digest.

http://en.wikipedia.org/wiki/Marcus_du_Sautoy
http://en.wikipedia.org/wiki/The_Story_of_Maths

I am going to have to watch it several times, over and over again. This is awesome.

 

[Yamato]

binary code intermission

Yeah, it's tough. You see, the "story of maths" video, at minute 10, and even before, sends me into all sorts of quests for knowledge. For example, besides the egyptian multiplication, I also had to find out what the binary code is...

Binary Code Tutorial - YouTube

Excellent bit at minute 4, when he says "if you don't know what i am talking about right now, sorry I really can't help you". It sounds like "in that case you're too stupid for my tutorial", but it's said in a funny and endearing tone, because he sounds like someone who has already spent years of his life teaching idiots.

But then those new searches send me into even more directions... so I am learning but definitely not in the order i expected. But maybe this way i am learning even more, because what's leading me is my curiosity rather than a teacher caning me.

Look here, this is fascinating:
Binary code - Wikipedia, the free encyclopedia

Binary numbers were first described in Chandashutram written by Pingala in 100 BC. Binary Code was first introduced by the German mathematician and philosopher Gottfried Wilhelm Leibniz during the 17th century. Leibniz was trying to find a system that converts logic’s verbal statements into a pure mathematical one. After his ideas were ignored, he came across a classic Chinese text called ‘I Ching’ or ‘Book of Changes’, which used a type of binary code. The book had confirmed his theory that life could be simplified or reduced down to a series of straightforward propositions. He created a system consisting of rows of zeros and ones. During this time period, Leibiniz had not yet found a use for this system.[1]
Another mathematician and philosopher by the name of George Boole published a paper in 1847 called 'The Mathematical Analysis of Logic' that describes an algebraic system of logic, now known as Boolean algebra. Boole’s system was based on binary, a yes-no, on-off approach that consisted the three most basic operations: AND, OR, and NOT.[2] This system was not put into use until a graduate student from Massachusetts Institute of Technology by the name Claude Shannon noticed that the Boolean algebra he learned was similar to an electric circuit. Shannon wrote his thesis in 1937, which implemented his findings. Shannon's thesis became a starting point for the use of the binary code in practical applications such as computers, electric circuits, and more.[3]

Mother ****ers studying things for hundreds of years before they ever needed them. The opposite of me. I needed them hundreds of years before I started studying them.

This should all start with math. There should be no finance and no computing without having very good math foundations first. Holy wow. I went the other way around: started by being a bad student, ended up with a bad job, found I needed money, tried making it with discretionary trading, then found out i needed trading systems, then found out i needed portfolio theory, then i found out i needed math, then realized i should have been a good student to begin with. So here i am, twenty years later, doing what i refused to do when it was the right time to do it. But it wasn't my fault: it was teachers and my father. Most of all father: too critical and pushed me too hard, so i rejected it all.

Well, **** them all. Now I am doing it just because i needed a mission, and my mission now is math. Because i need math to do my portfolio theory all by myself, and to do it right.

I'm now going to lock myself into my own little math world, and I will benefit from it, too.

I am liking this binary thing, so I'll keep watching up on it. I don't care if it's already clear:

Tutorial 4: What Is Binary? Part 1 of 2 - YouTube

This is tougher than it seemed because it is addressing this subject as well:
Positional notation - Wikipedia, the free encyclopedia

Positional notation or place-value notation is a method of representing or encoding numbers. Positional notation is distinguished from other notations (such as Roman numerals) for its use of the same symbol for the different orders of magnitude (for example, the "ones place", "tens place", "hundreds place"). This greatly simplified arithmetic and led to the quick spread of the notation across the world.

Usual wikipedia geniuses. This wasn't intuitive at all. It makes me look at math in a whole new way. It wasn't a discovery of something already existing, but rather an invention, or rather it was the invention of a "notation" to describe something that exits in nature, all right. They kept telling me that math is in nature all these years, but what math really is... is the goddamn "notation", and so what we call "math" is indeed a human invention. Then of course my teachers didn't invent crap, so as far as they are concerned math has always existed. Goddamn morons, ruining people's minds. People should never go to school. **** school. People should learn by themselves by reading up on the web and especially on wikipedia. And by school I mean a place where you sit down, you can't leave, and someone comes and teaches you whatever he decides to teach you. I don't mean a place where you click a video and it's called "tutorial". That is not school to me. School is the place where you're forced to go, and sit there for several hours, against your will. Mother ****ers.

[...]

Gotta quote this, too. Fascinating:
Arabic numerals - Wikipedia, the free encyclopedia

The digits 1 to 9 in the Arabic numeral system evolved from the Brahmi numerals of ancient India. Inscriptions from around 300 BCE used the symbols which became 1, 4 and 6; one century later, the use of the symbols which became 2, 7 and 9 was recorded[citation needed].
The first universally accepted inscription containing the use of the 0 glyph was recorded in the 9th century, in Persian mathematician Muhammad ibn Musa al-Khwarizmi's book On the Calculation with Hindu Numerals (written around 825). However, numerous Indian copper plates exist with the same symbol for zero in them; they date as far back as the 6th century CE.

And:

Adoption in Europe
In 825 Al-Khwārizmī wrote a treatise in Arabic, On the Calculation with Hindu Numerals, which was translated into Latin from Arabic in the 12th century as Algoritmi de numero Indorum, where Algoritmi, the translator's rendition of the author's name, gave rise to the word algorithm (Latin algorithmus, "calculation method").

Fibonacci, a mathematician born in the Republic of Pisa who had studied in Bejaia (Bougie), Algeria, promoted the Indian numeral system in Europe with his book Liber Abaci, which was written in 1202:
"When my father, who had been appointed by his country as public notary in the customs at Bugia acting for the Pisan merchants going there, was in charge, he summoned me to him while I was still a child, and having an eye to usefulness and future convenience, desired me to stay there and receive instruction in the school of accounting. There, when I had been introduced to the art of the Indians' nine symbols through remarkable teaching, knowledge of the art very soon pleased me above all else and I came to understand it.."

Fascinating...

Liber Abaci - Wikipedia, the free encyclopedia

Liber Abaci (1202, also spelled as Liber Abbaci) is a historic book on arithmetic by Leonardo of Pisa, known later by his nickname Fibonacci. In this work, Fibonacci introduced to Europe the Hindu-Arabic numerals, a major element of our decimal system, which he had learned by studying with Arabs while living in North Africa with his father, Guglielmo Bonaccio, who wished for him to become a merchant.

Liber Abaci was among the first Western books to describe Arabic numerals, the first being the Codex Vigilanus completed in 976; another pivotal work followed by Pope Silvester II in 999. By addressing tradesmen and academics, it began to convince the public of the superiority of the new numerals.

There you go, my point about mathematics being culture:
http://www.bbk.ac.uk/history/our-staff/full-time-academic-staff/dr-serafina-cuomo/research-interests

Mathematics is a particular challenge for a historian because it would seem to be absolute and unchanging, and consequently distant from everyday life.My first two books have been devoted to showing that this is not the case, and that mathematics is a cultural product which can only be properly understood in its context.

I am going to have to watch these videos endlessly. Fascinating and overwhelming at once. If it gets too overwhelming it becomes boring.

[...]

Another good video on binary code:

 

[Yamato]

Marcus du Sautoy interview

Just as interesting as the videos:
Science Weekly podcast: The story of maths | Science | guardian.co.uk

 

[Yamato]

why so many people have "problems" with math

Why so many people have "problems" with math and not with the other subjects?

I was thinking about this, and you know what? It's not true. People have problems with math as they do with the other subjects. The thing with math is that if you misspell a word in Spanish or ignore an historical fact or skip reading a literature book, it doesn't keep you from understanding what's ahead. With math, if you miss something, it prevents you from understanding everything ahead. You cannot miss a show with math, generally (not really, but much more than with everything else). You can have ignorance holes in humanities, but you cannot have such holes in sciences, and least of all in math. Then, having holes in math, you get scared and feel lost, and this further prevents you from understanding.

Here's some related links:
Misunderstood Minds . Math Difficulties | PBS

And here's one that's both useful, intelligent and funny:
Five Ways to be Better At Math

Quick quote from it:

3. Mental shift: From “Problems” to “Exercises”

Unfortunately, most people, including mathematicians, have a bad habit of calling things “problems” when they’re not really problems at all. I wrote about this in my article, “Problems” In Mathematics. Most people have to study math for a long time before they can tackle actual mathematical “problems”. The word “problem” implies that no one actually knows the solution. If the solution is known, as is always the case in the exercises in lower level math texts, then it’s not a “problem”, it’s an “exercise”. Calling it a “problem” is like a weightlifter calling a dumbbell a “problem”. Ridiculous.

Very intelligent article. I need to quote it again:

CONCLUSION

One thing I never mentioned in this article: doing lots of hard studying. Follow the five steps I gave, and the studying should become a joy, something you actually like doing, so it doesn’t seem hard at all. In any case, math is something you should do at your own pace, and this is partly why self-taught math is so much more powerful than school-taught math.

I told you so. Self-taught is better than school-taught, not just for math but for everything.

[...]

But then the problem is: are you going to teach yourself to read when you're 5 years old? And are you going to teach yourself all the other things early enough to use them when you'll need them? Who knows. Society generally thinks school is the best way to go about it. I don't know. Maybe they're right, and maybe I am better off having gone to school than not. But certainly I can say that I would have benefited from not having been pushed so hard by my father.

[...]

Back to some stimulation. I went back to those exercises I was doing yesterday:
Challenge Exercises: Probability Theory

And I did another one. Now I've gotten the first 5 correct, out of a total of 5 (at the first try). I am pretty proud of it. I am starting to become a "mathematical genius"...

As xamuel.com says at the link I listed previously:

5. Believe You’re Good At Math

Whether or not the arbiters of society declare you Good At Math, hold the belief in your heart. Catholics believe that their priest can literally feed them the physical blood and flesh of Jesus Christ, so by comparison, it should be pretty easy to believe in something as mundane as being good at math.

The thing is, belief becomes reality. I experienced this in my own life, because until seventh grade, I did terrible in math classes, hated math (or at least, what I knew of math, which was just mind-numbing arithmetic), and generally believed I was terrible at math. (This, despite learning the BASIC programming language with my brother, which has a lot of overlap with algebra– I just didn’t know it yet) The way I got into math was actually pretty silly. I was going through a phase where I was interested in psychic power development. Of course I never developed psychic powers, but I got seduced by the D&D-ish stereotype of psionicists being extremely smart, and so that led me to start looking at the pictures in Euclid’s Elements. Mostly I didn’t understand them, but I struck out to do geometry on my own, kind of copying the general idea of following axioms and drawing lots of neat pictures with compass and ruler. That made me believe I was a mathematical genius, and by ninth grade everyone was pretty much going along with the “fantasy”

 

[Yamato]

13th day after the "math" keyword entered my journal

This is my 13th day after the keyword "math" has entered the journal on October 1st. A lot of water under the bridge.

I feel the strong resolve to come out of this on top of my math problem.

The objective is to get here:
Yue-Kuen KWOK's Home Page

Or to a similar situation. And I don't mean i have to cover their material. I mean I have to be ready to cover their material, but then I won't cover it and only study what I need. What I mean I have to be ready, as far as math, to study that stuff. I wonder if those guys ever produce any profits anyway. But if I can learn what they know, I will produce profit.

The Ph.D.s don't produce jack**** usually. Even if they're professors. Especially if they're professors.

I came from practice, and have to go back to theory. They come from theory and will stay in theory. I need the instruments to figure it out all and make it all fit together. I need the language, the notation, and then I'll get some concepts that I am still missing. If the professors' formulas won't work, I'll create my own, but they have to be formulas. There can be no rule-of-thumb estimates this time.

And even if all the formula knowledge won't help me a bit, I owe it to myself to try. To make this last effort to help myself succeed. No more fear of formulas. No more fear of math. I have come to a point, where I cannot look away as soon as I see a formula.

Anyway, I have nothing better to do with my time.

I'll make this effort.

I have no money, so I might as well study math while I have no money. That's the best investment, because portfolio selection is where we failed, and I cannot do it properly unless I have math under control.

Today, I was talking to my dad's secretary and my dad was hearing. And I said the experiment with other people's capital had failed. She doesn't know jack****, and her feedback was useless as always with almost everyone. But what matters is my father's reaction, I mean just his face. He looked as if he will not offer me any capital in the next few months.

So here's the situation after one month of being told by both my dad and the american friend: "why don't you take our money, instead of theirs?". And "why did you give your systems away to them when you could have just taken our money?". And after I told them "because when i needed you, you weren't interested at all". Now I need them again, and, just after one month of telling me what they told me, once again, as expected, they're no longer interested.

As expected, when it's the time to actually give it to me, they both changed their mind. And this has got nothing to do with what bbmac suggested: the fact that I allegedly "failed again", because I did not fail, and least of all I "failed again" (it was the first time I ever had any investors). It has instead to do with the fact that when it was just an hypothesis, everyone was interested. When it's real, no one is actually willing to do it. They like to play with the fantasy in their minds, but not actually doing it. Whatever the cause, I am pissed off. But not pissed off or desperate enough to give my systems away to anyone ever again.

My non-scientific approach has produced losses, endless losses, ever-repeating losses for the first 10 years of my trading. Then there was a mix of discretionary, system trading, and tampering. Then there was just disciplined system trading, but the scientific approach was not good enough, and it was flawed. Now hopefully discretion is behind me, for good. And what lies ahead is science, nothing but science. The only reason I'd invest again is to keep IB from closing my account due to lack of trading. But even then I should be able to refrain from engaging in discretionary trading. Maybe I'll trade just one system.

 

[Yamato]

no news, good news

Well, as they say "no news, good news".

I don't know exactly what it means... let's look it up:
Re: No news is good news

Anyway, no news at all. Everything as usual. I am in a good mood actually.

No stress from investors, since we lost everything and stopped trading. That is one advantage. Maybe the only advantage.

No stress from work.

No stress from anyone.

And a long weekend ahead of me.

Just me, my math, and my journal.

Only problem was, as usual, coming home on the cab, i saw some hot girl, felt like screwing her, but nothing happened. That's the only... when i have such regrets, it usually means my mind is pretty clear and i am pretty serene.

 

[Yamato]

resuming my math studying

Six out of six, and counting...

Challenge Exercises: Probability Theory

It's not easy, I am telling you. It takes a fine mind to understand probability and statistical thinking. I am proud of getting into it, little by little. This is a science worth studying. Especially because trading profitability has its foundation on probability theory. Whether you like it or not, realize it or not, grasping these concepts is responsible for profitable trading. And I don't mean grasping them, roughly, approximately, but I mean you need to master them.

Let's hear what Simple Wikipedia has to say about it:
http://simple.wikipedia.org/wiki/Probability_theory

Probability theory is the branch of mathematics concerned with analysis of random phenomena.[1] The central objects of probability theory are random variables, stochastic processes, and events: mathematical abstractions of non-deterministic events or measured quantities that may either be single occurrences or happen over time in an apparently random fashion.

As a mathematical foundation for statistics, probability theory is essential to many human activities that involve quantitative analysis of large sets of data.

You heard that? "...quantitative analysis of large sets of data": that's why we need it so much, me and the few other guys who are doing this right. Basically only me. The other mother ****ers are incapable of putting to work their large amounts of knowledge (too lazy or too stupid or too knowledgeable), and can only hope to copy my concise work (story of my life).

I, on the other hand, have little knowledge, but know how to use it. And do things right even when I lack the knowledge.

The simple wikipedia suggests a book, which seems perfect for me:

Henk Tijms (2004). Understanding Probability. Cambridge Univ. Press.
A lively introduction to probability theory for the beginner.

How do i get this book for free? Simple. I look it up on google books:
... well well, what do you know. The good books are always easy to find. The trading vendors' bull**** are impossible to find for free.

Look here, a quick search on google:
http://www.google.com/search?q=Henk+Tijms+2004+Understanding+Probability+filetype:pdf

Lead me to this, on uqu.edu.sa:
http://uqu.edu.sa/files2/tiny_mce/p...lan1/realan2/diffa/diff1/diff2/0521701724.pdf

Thanks, dudes at Umm Al-Qura University, in Saudi Arabia:
http://en.wikipedia.org/wiki/Umm_al-Qura_University

 

[Yamato]

working on equations for taxi fare problem...

I don't know if they're called equations or what, but I think I am getting into this, since Du Sautoy in his videos showed how the Egyptians and Babylonians started discovering math from practical problems... I will, too.

I had a problem with a taxi driver the other day. We took a route which today I calculated to be 5.4 Km on google maps. He took 20 minutes, and he wanted to charge me 15.60, and I complained that for months I have gone the same route and only got charged from 7.70 in August to maximum 11 in other periods. He said there was traffic and I was distracted by reading my math papers... he ended up giving me a discount, and I paid 13 instead of 16, and I said "in case I was wrong, thanks for the discount". Mother ****er.

I believe he ripped me off. I studied the fares on their regulations. I know the route. I know the time it took, but I am having troubles finding out exactly how much he should have charged me. I am pretty sure he tried ripping me off (I know how: probably by turning on the second fare, for extra-urban routes, but I didn't see it on, because i was reading most of the time).

Anyway, here's where I am at right now. Not far, but I tried. And I will keep it on the list of things to do. I am qutting for now. That's right. Even when I started learning English, I didn't expect to understand a movie after the first 24 hours I spent in the States. I am not quitting in fact. I am postponing.

 

[Yamato]

yes, 7 out of 7!

Yes, 7 out of 7! I am getting it... more and more.
Challenge Exercises: Probability Theory

France Gall - Il jouait du piano debout - Clip 1980 - HD. - YouTube

...Et pour quelles raisons étranges,
Les gens qui tiennent à leurs rêves,
Ça nous dérange.

 

[Yamato]

weekly update



Coming back at the moment. We stopped trading right at the bottom of it.