I am not an expert, but I think you'd want to know whose lunch you are eating and why that lunch is being given away. If you can't provide a hypothesis for your alpha, there is a fair chance that it's a result of random change, that the effect existed for a reason or that you would not be able to exploit it for some reason.
Do you need to understand where the edge comes from?
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If you do not know the logic behind your edge how do you improve it or recitify it when it breaks down ? AI and machine learning seem nothing but curve fitting to me but i am trying to be open to it , my knowledge on it is limited . I still believe human concepts are way more powerful than any AI at this stage . Algos for me are nothing but a mathematization of a thought process , a clone of emotionless objective thinking , a reflection of me not caught up in the moment but measured and contexted .. An edge without a defined process is not repeatable and therefore no edge at all . Edges dont involve guessing , edges are the result of an empirically proven mathematical rule set .
Yeah, algos are like robots in a automotive supply line, instead of humans running around with screwdrivers and hammers in their hands and every 5 minutes wanting to run off for a piss, cup of coffee or chin wag, robot keeps on going thru the pain.
Having utility vs understanding underlying principles is similar to being a driver vs a mechanic.
If the market is seemingly random, why shouldn't an explored strategy be? Even top AI researchers will admit they don't understand or can provide 'history for' 'why or how' a developed neural network comes to the 'answers' it does. What type of ML are you referring to precisely? Obviously the first thing to learn is what ML is going to yield or provide desired results and be best suited for your data set etc. I think when you are working stats like that say only 1% of your test variations are going to yield results - people are naturally quick at that point to 'discount' the why. After all who cares 'why' if the great unknown and trial and error has placed the answer in your lap. Whilst perhaps not the answer itself, it is always a start of further experimentation along similar lines - and that is what the ML quant industry is. layers upon layers, output to input, reprocess, parallel - all forms of data manipulation and experimentation. There is also so much pure mathematical and scientific underlying research that it is almost impossible for a person to accurately describe how they came to being a 'utility' for them consume. This is the nature of progress and the 'hive mind' I guess. One could say that a 'Quant' is a modern day information economy based Alchemist. So its possible to understand 'how' it works at a conceptual level, but to answer 'why' might lead us down the path of metaphysical answers.
In contrast to popular opinion, 'seemingly' random is distinct from 'factually' random as well as 'seemingly' not random and 'factually' not random.
The market operates on negative logic. One can know a thing by methodically knowing what it is not. Using the appropriate math, the possible mathematical permutations of the price and volume relationship are finite and transforms perception from 'seemingly' random to 'factually' not random. Statistics are powerful and boolean is more powerful still.
The last two sentences of your quoted post are enjoyable and if I may add, 'Qual' is inclusive of 'Quant'. The metaphysical answers one seeks are paradoxically not external but a relationship of external and internal factors as a state of being.
Human emotions have been constant throughout our concept of time and are trans-cultural. Participation in the markets is an emotional experience. Certainly there is the assertion that to be successful in this engagement one must put their emotions to the side. That approach elevates the un-feeling and mechanical which does produce results that are acceptable to most.
However, there is a knowing that is inaccessible by mechanical thinking which lies in the domain of intuitively discerning 'gestalts' in a blink - as the book of the same title explores.
Throughout time mystics have asserted the metaphysical properties of numbers. If one were to explore and include this knowledge then reducing things in our perception down to a basic granularity can provide insight not available by any other means.
In my mind, 'direct experience' avails one to knowledge and wisdom that 'book' knowledge and languaging in general can only point to.
Wooden Books as a publisher has many quality offerings in this vein. One of my favorites is 'Quadrivium: The four classical liberal arts of number, geometry, music and cosmology.'
Personally, simultaneously with developing automation, my perspective of the markets is currently evolving to include music and cosmology.
Everything is inter and intra-related, as Aldous Huxley put forth in his seminal 'Doors of Perception -'
"If the doors of perception were cleansed every thing would appear to man as it is: Infinite. For man has closed himself up, till he sees all things thro' narrow chinks of his cavern."
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If you don't know what your edge is, you probably dont have one.
Thank you for your reply @Sprout, very insightful and enlightening words and I find very interesting to see some sacred geometry/metaphysical aware thoughts on trading. I try to incorporate as many such numbers as possible in my variables. Whilst not always always relevant, I like to think it helps anyway.
I think you are right. We live in a duality, and please excuse the analogy but what if these metaphysical answers are indeed our internal perception of 'area under the curve' relative to the 'unseen/unknown'. A kind of imbalance or threshold if you will, which triggers 'the need' to know (or at least awareness as you infer) of what is on the other side. Is this why we seek answers externally?
I would love to read your book recommendation so please PM the link as post link was broken.
Thank you for your reply @Sprout, very insightful and enlightening words and I find very interesting to see some sacred geometry/metaphysical aware thoughts on trading. I try to incorporate as many such numbers as possible in my variables. Whilst not always always relevant, I like to think it helps anyway.
I think you are right. We live in a duality, and please excuse the analogy but what if these metaphysical answers are indeed our internal perception of 'area under the curve' relative to the 'unseen/unknown'. A kind of imbalance or threshold if you will, which triggers 'the need' to know (or at least awareness as you infer) of what is on the other side. Is this why we seek answers externally?
I would love to read your book recommendation so please PM the link as post link was broken.
After several attempts, I don't know why the link is broken nor how to fix it.
In contrast to Buddhism which teach that all desire leads to suffering, while I can find evidence to the truth of this claim, imho it is also true, that desire is the leading edge of conscious co-creating. Ego has a desire, the divine spark of source within ourselves aligns to that desire and offers up emotions as a compass.
This compass of emotions is a direct reflection of our focus of attention. There are fundamental spiritual/natural laws that operate regardless of our attention to them or not. One example is the law of polarity, law of vibration or the law of attraction. With one, opposites attract each other and the other like is drawn to like. Paradoxically, they both exist. For me, clarity comes from context. I believe that consciousness is the fundamental building block of the universe (at least our perception of it) and our awareness is the focuser of our intention.
The quality of the questions you ask will give you the quality answers you desire.
So in respond to your question, from my perspective, there is the universe orchestrating a rendezvous through time to fulfill any desire that has been stimulated within ourselves.
The next step in this process of co-creation is whether we allow this manifestation or not, and further as possibilities crystalize into actualities and further into realizations all are dependent on this process of allowing. This process is how the universe expands into more of what is wanted and less of what is not from an egoic perspective. Fundamentally, whether our ego desires it or not, what we receive matches our vibratory offering.
Paradoxically, how can we 'know' a truth from outside of us unless we have some sort of reference to base it upon? I assert that this reference is an internal 'knowing.' Whether that internal knowing is based on our 'inner being' that exists independent of time or the one that is based in time such as our ego is a point of discernment that 'flow states' give access to. The Self compared to the self. One's Soul compared to the soul.
Meditation is a proven and popular access point to this discernment.
I subscribe to a Pronoia perspective vs one that is based in Paranoia. They are mutually exclusive. It is also why principals of extracting the markets full offer to those that are centered in self-aggrandizement at the expense of a larger and more inclusive well-being is inaccessible. Even though I frame this is dualistic context, there is also the set of intersection between these two domains.
The answers to your questions are always within your reach and do not require any sort of mediation, priest or guru - although they can certainly point the way.
Imho, it is as simple as; "Know thy Self and to thine Self be true."
So with all that said, questions are much more potent than answers. It's the quality of the questions we ask that improve the quality of the answers. Each answer is just a step upon the path of a higher realization to even greater states of more inclusive Being.
Funny in that this is my verbose way of reflecting to you what you had more simply said.
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That's a lot to absorb but very interesting. Thanks you. I am going to have to look into this Pronoia concept further, as I have been experiencing a bit of the latter recently when it comes to trading haha. I won't go into detail, but yes I believe in a 'form of matrix' like you. Benevolent, manifest or control mechanism I'm not sure yet. Having devoted myself to 'extracting the markets full offer' and 'standing on the precipice' of success - senses finely tuned to this area began to pick on a series of interconnected events which 'revealed' themselves to me - in order to ultimately put me back to 'level' or zero. Whilst still profitable, this has 'forced' other events related to 'well-being/family' to transpire (perhaps first). I detect a lot of Gnostic principles here and it reminds me of a video.
Without sounding corny I hope - perhaps the answer to this thread question has been answered now in so many words...
The trading 'edge' is the path we are walking. If we know it to be true, it will remain the 'edge' between chaos and order. Do you have a better maybe funnier way to say this?
but very interesting. Thanks you. I am going to have to look into this Pronoia concept further, as I have been experiencing a bit of the latter recently when it comes to trading haha. I won't go into detail, but yes I believe in a 'form of matrix' like you. Benevolent, manifest or control mechanism I'm not sure yet. Having devoted myself to 'extracting the markets full offer' and 'standing on the precipice' of success - senses finely tuned to this area began to pick on a series of interconnected events which 'revealed' themselves to me - in order to ultimately put me back to 'level' or zero. Whilst still profitable, this has 'forced' other events related to 'well-being/family' to transpire (perhaps first). I detect a lot of Gnostic principles here and it reminds me of a video. Without sounding corny I hope - perhaps the answer to this thread question has been answered now in so many words...
The trading 'edge' is the path we are walking. If we know it to be true, it will remain the 'edge' between chaos and order. Do you have a better maybe funnier way to say this?