Quote from FerdinandAlx:
Jack, you've talked about the "like kind" criterium by Keynes in several posts. Can you explain what this criterium is and how it relates to the market?
In non inductive systems, there is logic and science involved.
As you see jerry has posted his mining critria for doing inductive reasoning and analysis. He is, I'm sure, in demand at the various money making corps of the financial industry. His work does two things: makes money and is a terrific sales support for gaining the client's attention and capital. Traderzones could sell his stuff in a New Jersey minute.
Lets turn to the reasoning of Keynes and Carnap and Bayes. Bayes and the "frequentists" get axed by Keynes and Carnap. Both avoid the "Riddle of Induction" and allow for paradigm type replacements.
When a person constructs a model, he does work that allows evaluation. Jerry cites his go/nogo relative to money making. In examining a model ap erson looks at how well the model works in terms of science.
To have a foundation from which to work, it is necessary to make it solid and thoughtful. Keynes defined this requirement in terms of the expressions of the model description. All the parts of the description, for him, had to be of like kind.
when it did this I had only four words that were inserted in all the hypotheses that were "identical in construction. So like kind meand "identical" for me. And with the proviso that, further, the parametric measures were like kind too. The measures are the four words.
I made them like kind no matter what they applied to in terms of market variables.
I did not create any additional degrees of freedom here. I uses the market variables in the foundation construction of the Hypothesis Set (HS)and its Parametric measure (PM)
There is no loosie goosie with using Crays and massive amounts of data, all inductively. People pay for that stuff and they get what they paid for.
The charts you see have little P's on volume occasionally. Do a calc for the returns in cash to cash using some % of total capital of your choice. you have a blow up on retruns if you get to any significant portion of total capital. Blow up means the model has no comparison anywhere in the financial indusrtry and THEREFORE it dies not work in any way.
I used IF, THEN statements for my HS. I used increasing, decreasing, continuing and changing for my PM.
These are all time rate of change terms in market data which is composed of non continuous functions.
Keynes said that the "in kind" dictates the use of mathematics. Bayes and "frequentists" are out of the picture at this point. They do not have to be, the statistical mechanics part of theoretical physics proves this in a NY minute.
If I have two words for volume that are mutually exclusive and the same for price, volume's antecedent, then the math is dictated.
Why long ago did the indicator designers not use the correct math? jounalists and historians do not know where to look or write about it. Perhaps, it was because the indicator designers used what was convenient for them.
I did as well, but I played by the science and reasoning rules instead of the "money making" rules.
Jerry does not ask me anything but he does ask others about "money performance". He may be usiung mathematics to analyze "money making". He gets nothing related to the market's offer. The little P's do, however.
Here your question is about "in kind". That was spoken of.
Choosing the "ings" was a consequence of the IF, then construct. Having time rate of change involved was the key to moving out of the CW orientation. Buffett is a cool cool example bcause he is a codger as am I. He does not time the markets. He is not an "ing" man; he onoly does "durable value". Cows do that with cream; they know to make milk that sepates, if it sit for a while or gets spun hard enough.
Choosing "ings" that relate to the mechanism for making money was a by product of thinking logically.
Alol of the ATS stems from the "foundation" of the HS and PM whcich are precisely "in kind".
I generate about 70 degrees of freedom using a Boolean Algebra "in kind" construct. By havinga go/nogo orientation to time rate of change, I am in the cat bird's seat.
Look at SKO's last pass on Q's (volatility and overlap). They are "ing's" too, IF a person is wired to "inging" it. I am. volatility increasing or decreasing. overlap increasing or decreasing. These are all IF's.
The THEN is used for making money. Money has two characteristics and they are orthogonal. Here, again, inductive approaches are fucked royally. they deal in opposites about 150% of the time; much more than all of the time.
Lets have a shoot the messenger moment for laughs. Ho HO.
What does it take for a person to deal "in kind" and recognize the market does not deal in opposites?
As you see on bar 57 the market long failed...
Price does two in kind things: continue and change. In Boolean terms these are mutually exclusive. Ig you are not in one you are in the other. BUT you find out deductively using the science of the null hypothesis.
This is getting long. Nice long failure.
