Do you believe in data mining?

luckyputanski · Apr 25, 2023

Do you believe that it can be profitable to trade a "system" build from rules found by data mining? Assume that everything (data preparation, significance testing, trading assumptions) is executed properly (whatever this means for you).

danielc1 · Apr 25, 2023

We trade what we believe, so there is no right or wrong in this. For me, it is first the idea that has to make sense. Data is only that, data. At best, it still only represents a fraction of what is really happening with the subject.

maxinger · Apr 25, 2023

For me, no.

For some others, yes.

swingtrader123 · Apr 25, 2023

Yes, data mining is important tool. Technical analysis is data mining; so is back testing.

easymon1 · Apr 25, 2023

+ proper data analysis.
Add proper execution . . .

TrAndy2022 · Apr 25, 2023

If you buyandhold equity index like SP500 you are still Momentum investing, because they change their holdings frequently. So yes, data mining is everywhere even you do not nothing.

RedDuke · Apr 25, 2023

Data mining works, as long as you do
Not confuse it with curve fitting.

jys78 · Apr 25, 2023

What do you mean? It certainly exists, not sure how someone could rationally not "believe" it.

SimpleMeLike · Apr 25, 2023

luckyputanski said:
Do you believe that it can be profitable to trade a "system" build from rules found by data mining? Assume that everything (data preparation, significance testing, trading assumptions) is executed properly (whatever this means for you).

Hello luckyputanski,

I do not know what to believe in anymore.

If it looks good in back test, in one year, it will look ugly with real money.

schizo · Apr 25, 2023

luckyputanski said:
Do you believe that it can be profitable to trade a "system" build from rules found by data mining? Assume that everything (data preparation, significance testing, trading assumptions) is executed properly (whatever this means for you).

It depends on the data you mine. I mean, there are literally tons of data floating on the web every waking second. It's mind boggling just thinking about it. Unless you have the manpower and the resources (eg. $$$), you can forget it about it.