Watch HowardCohodas Trade Index Options Credit Spreads

[HowardCohodas]

There are plenty of us around, first generation geeks from the first generation home computers.

I must be generation zeroth then. I started writing assembler code from the users manual of a computer I found laying around when I was in high school. It was all on paper and I was unable to test it but I rewrote an application many times to make it more efficient. I learned the benefits of adding comments and avoiding overly complex code.

Then assembler in my first real machine, a Univac 1107. Then Fortran and Algol.

My first minicomputer was a Digital Equipment Corporation PDP-5 in the days when memory was still made out of iron doughnuts. It was so primitive that memory location 0000 was the program counter.

Doing Octal math was required to patch my programs through the console switches. Once, when doing my checkbook I subtracted one number from another and messed up the checkbook for weeks. Both operands only had digits 0 through 8 and without thinking I did the subtraction in Octal.

I'll add to this "can you top this" dialog later. My post is long enough already.

 

[robster970]

Howard - the problem you haven't grasped yet is that the market is not a problem with a mathematical solution.

It doesn't matter at all how well a team you worked on resolved a business or engineering solution - the markets are just not like that. It doesn't matter at all that you released software & supported it. These skills are irrelevant in the markets.

Your employer uses my company for support of some of their software. These skills are nice to have but i leave them behind when I trade.

Your 'disciplines' just don't apply here.

Many people try to apply their non-trading skills to trading. You will make the most gains when you stop doing this.

I agree. The professionalism and disciplines you use in engineering are incredibly useful in structuring how to analyse problems. They are in themselves not the solution though Howard.

Trust me Howard, I threw away 12 months of work, much the same kind of work and levels of effort you are currently applying - I was always going to take this seriously. I can now look back and see how useful that work was but it is an overlay on fundamental knowledge and experience I have acquired through changing my mindset and in itself was not the answer.

 

[meanreversion]

Howard - the problem you haven't grasped yet is that the market is not a problem with a mathematical solution.

It doesn't matter at all how well a team you worked on resolved a business or engineering solution - the markets are just not like that. It doesn't matter at all that you released software & supported it. These skills are irrelevant in the markets.

Your employer uses my company for support of some of their software. These skills are nice to have but i leave them behind when I trade.

Your 'disciplines' just don't apply here.

Many people try to apply their non-trading skills to trading. You will make the most gains when you stop doing this.

I have to say, I don't think it's the case that Howard can't apply his skills to trading, I think it's the case that he's going about it in slightly the wrong way.

Hedge funds either want PhD statisticians or programmers these days, and HC certainly has the programming thing down.

Can I ask Howard, did you look at other trading systems (aside from selling options)? And if so, what led you to conclude that selling options was the best strategy, i.e. what metrics were you using to compare systems?

 

[HowardCohodas]

I think that is the axiom that causes the division of though between other contributors to the thread and yourself.

If you are using engineering as a frame of reference here Howard, you will miss the point entirely. I'm prepping for open so will post more later.

Humour me - pretend you weren't an engineer. How would you go about learning to trade and creating a method which was profitable?

Lets separate learning to trade, creating a method which has the potential of being profitable and profitability.

I don't believe being an engineer informed my choice of the foundation of my strategy. It was opportunistic as a consequence of Brownian motion. I encountered the idea because of a consulting gig and I was intrigued to learn more about it.

Creating a trading method was largely a consequence of my seeing what others had done and challenging their premises. Every time I examined a premise, like for example, that Iron Condors are only good for sideways markets, I found I could "engineer" ways to make it more flexible. So I did not create a method out of whole cloth. I stood on the shoulders of those who went before me.

I'm not certain I am capable of unlearning what I know about engineering discipline. It is the foundation of who I am and thus I have applied it to the way in which I qualify a strategy for potential profitability and the way I attempt to assure continued profitability.

However, because you asked, I'll contemplate how I might have approached these challenges without my background and see what I can come up with.

 

[HowardCohodas]

Can I ask Howard, did you look at other trading systems (aside from selling options)? And if so, what led you to conclude that selling options was the best strategy, i.e. what metrics were you using to compare systems?

Brownian motion and curiosity. See my response above to Robseter for more detail.

 

[HowardCohodas]

Your 'disciplines' just don't apply here.

To recap my post, among the disciplines I listed are:

1. Limitations of black box approaches
2. Product Development Process
3. Sensitivity Analysis
4. Quality Assurance

I cannot see any of those that do not apply to trading.

No one has yet made a case for why I would be a better trader if I abandoned any or all of them. If I did, I would likely not have the confidence to trade.

 

[HowardCohodas]

I agree. The professionalism and disciplines you use in engineering are incredibly useful in structuring how to analyse problems. They are in themselves not the solution though Howard.

Trust me Howard, I threw away 12 months of work, much the same kind of work and levels of effort you are currently applying - I was always going to take this seriously. I can now look back and see how useful that work was but it is an overlay on fundamental knowledge and experience I have acquired through changing my mindset and in itself was not the answer.

I am open minded and remain a work in progress. I look forward to learning from you guys. But I do have a tendency to challenge statements that are not backed up by logic I can understand. This requires forbearance on your part. I thank you for it.

 

[meanreversion]

Honestly, is there any point to this continuing Howard bashing? I haven't seen a single person opine that they think what HC is doing has merit, so we're all in the same boat. Rather than continually knocking him, let's just leave him to it and see how it pans out.. doesn't that make more sense?

 

[robster970]

Nobody is saying abandon what you have done. Rather, assimilate the problem from a traders perspective than an engineeering solution perspective. There is a difference.

Honestly, is there any point to this continuing Howard bashing? I haven't seen a single person opine that they think what HC is doing has merit, so we're all in the same boat. Rather than continually knocking him, let's just leave him to it and see how it pans out.. doesn't that make more sense?

I didn't think this was bashing really. I was hoping it was helpful.

 

[HowardCohodas]

Nobody is saying abandon what you have done. Rather, assimilate the problem from a traders perspective than an engineeering solution perspective. There is a difference.

I didn't think this was bashing really. I was hoping it was helpful.

With one exception.

 

[HowardCohodas]

Honestly, is there any point to this continuing Howard bashing? I haven't seen a single person opine that they think what HC is doing has merit, so we're all in the same boat. Rather than continually knocking him, let's just leave him to it and see how it pans out.. doesn't that make more sense?

I do not consider questions, respectful challenges and suggestion for improvement, bashing. I am even learning from the disrespectful challenges. I am learning to ignore the disrespect and continue on. That is also a discipline worth acquiring.

 

[DionysusToast]

No one has yet made a case for why I would be a better trader if I abandoned any or all of them. If I did, I would likely not have the confidence to trade.

If you were to examine the value of skills in one area helping in another, why would you presume they would? By your logic, we could have the world hot-dog eating champion on here asking us to prove why his hot-dog eating skills wouldn't help in trading.

Let's say you decided to become a doctor. Your engineering skills may contribute but the contribution would be minor.

You have decided to turn your hand to trading and also decided that your enginerring skills are of major importance. Is this a cognitive bias or do you have a case for engineering skills to take precedence over trading skills?

 

[HowardCohodas]

You have decided to turn your hand to trading and also decided that your enginerring skills are of major importance. Is this a cognitive bias of do you have a case for engineering skills to take precedence over trading skills?

Which of the skills I listed would you recommend I abandon and why?

 

[robster970]

I don't this Mr Toast is advocating abandonment of skills - I think he's saying the same thing as me. I think.

 

[HowardCohodas]

Re: Journal Entry - Trials and Tribulations

Journal entry under Trials and Tribulations

THIS ACCOUNT HAS NO AVAILABLE BUYING POWER

This status came about because one of the spreads I opened yesterday had a leg adjacent to another spread in the same series. Their quarantined funds calculator thinks I was trying to form a butterfly rather than completing an Iron Condor. Software bug!

I was trying to complete my roll so I called the trading desk and they executed it for me, including several tries at limit orders until a fill was obtained.

They have temporarily fudged by making a buying power adjustment to my account, so I'm open for business this morning.

 

[HowardCohodas]

I don't this Mr Toast is advocating abandonment of skills - I think he's saying the same thing as me. I think.

With all respect, due or otherwise, I strongly disagree. Or perhaps I don't understand the English language as spoken by Brits.

 

[scose-no-doubt]

I hate to quote Krugman...

http://www.pkarchive.org/trade/company.html

extract:
"Going Back to School

In the scientific world, the syndrome known as "great man's disease" happens when a famous researcher in one field develops strong opinions about another field that he or she does not understand, such as a chemist who decides that he is an expert in medicine or a physicist who decides that he is an expert in cognitive science. The same syndrome is apparent in some business leaders who have been promoted to economic advisers: They have trouble accepting that they must go back to school before they can make pronouncements in a new field. "

 

[robster970]

I better pipe down then.

 

[meanreversion]

I do not consider questions, respectful challenges and suggestion for improvement, bashing. I am even learning from the disrespectful challenges. I am learning to ignore the disrespect and continue on. That is also a discipline worth acquiring.

Right-o.

You're a 60 year old chap with some very defined ideas on what is going to work. For the last 110 pages you've had various people tell you (in some shape or form) that you haven't a clue.

Your above response is disingenuous at best; I fail to discern even the slightest change in your approach (other than perhaps dropping one index).

Thus the dialogue on this thread now constitutes the "talking at each other" variety and is fairly pointless, IMO.

 

[the hare]

Systems analysis type skills where your applying both top down and bottom up approaches to problem solving is probably more relevant, although its doubtful if a hobby programmer would come anywhere close to working or thinking in this way.

An engineering background helps as far as doing the grunt work is concerned.

Neither of the above skill sets will make you a trader.