dt,
Your post makes sense to me -- particularly the 90/10 or 80/20 principal that is true in many more things than most realize. The two sections I've pulled allow me to give you a better sense of my current frustration.
It is clear to me that I MUST -- as you say -- find a way to validate (or rule out) subjective claims and, I would add, any observations I think warrant an objective look. To disagree with that (and in a moment you'll understand why I would LOVE to) would be folly. If, as I believe, this is a tough game to beat with a foundation, without one it becomes more akin to a gamble than a business.
It is easy to tell that "whipping up" a quick analysis is, for you, no more difficult than for a Neopolitan to toss a mound of dough up in the air and twelve minutes later serve up a first class pizza. Not a seven course French feast but damn good grub that does the job.
Although I have played some interesting and profitable hands over the years each was approached in a very "old school" way. In one instance demographics played a key part in the business and I hired, for a half day, a demographer who lived in Cambridge and had gone to MIT, spoke to him, and then ordered census data and hired a computer guy from an ad in The New York Times; it was pre-web and that's how you hired.
Although this may seem strange to you I have never so much as added two plus two in a spread sheet. My total experience with Excel is seeing my staff's output and using that as a decision making tool. Often the primary tool and at times the only tool I needed. But, again, I was looking at the numbers that had been "crunched" and never crunching them.
I look at your output and it occurs to me that I don't have the slightest idea where you obtained the data not to mention what you did with it after you got it.
It would seem that the obvious thing would be to have others crunch after I have explained what concept I want tested. Obvious ... yet I think incorrect. I need to work on the numbers at a simplistic level -- maybe rudimentary is a better word. I sense that in this venture moving closer to the process -- again in a rudimentary way -- will result in serendipity that may turn into an edge.
And for serendipity to have a chance one must be able to wander around a subject like one wander through a second hand book shop. Not knowing what your looking for but confident you'll know it when you see it. I don't want to be a consummate tester but rather to think of it as a pair of reading glasses that makes the page legible.
I want to at least be able to "whip up" a simple cut that allows me to articulate what a particular trade is and then see if it tests favorably.
For without an edge that has some statistical basis the odds of being a punching bag simply escalate to an unacceptable level.
I'm not trying to develop mechanical systems or think that someday I will "master" complex testing. I want to continue to view futures markets -- indexes, currencies, crude and metals -- as a discretionary trader yet I want to know that 40 - 70% is the range to look at and that after looking I want to know that it does not even come close to covering a $3 commission never mind the more realistic number of $5 per.
I've looked at Amazon's offerings and none seem to be a starting point. Any ideas how I get to "Two plus Two" in a reasonable time frame? Remembering that really do need to start at the beginning. When teaching an old dog a new trick it is very important that the trick be simple ... even if he's a pretty bright dog.
Quote from dtrader98:
Hi Black Swan,
I hope I've shown you can use something as simple as excel to validate ideas. In fact, I often use it as the fastest canvas to run an idea. However, there are plenty of trading backtest platforms that you can search around here or ask others that will translate and test your ideas for you (I generally write my own).
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At some point, you want to try to objectively find a way to validate some of the many subjective claims put forth in dozens of garden variety TA books:
I've said it a million times, but trading in reality can be a bit sobering when viewed under a calibrated microscope.
Cheers,
dt98
