Do you see patterns in Random Walks?
- Thread starter atlTrader666
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I don't understand the hostility some traders have towards academics. You realize they are probably a lot more educated than you are? Many of them are also more intelligent? How the hell do they come up with all the science which enables things like GPS, CPU's, cell phones, airplanes, satelites, space travel, etc. if they are such morons? Is it just because anti-academic traders are too stupid to understand the papers they write so that they envy them?
Academics think and analyze things on a more concrete basis, not feelings, or random thoughts, etc. However they are still human beings and have intuition just like a trader though usually for a different purpose. They just use their intuition to get a starting point to analyze something with concrete mathematics. Most successful traders are essentially doing pattern recognition, which is something Academics invented ways of teaching computers to do. If you have ever experimented with a neural network to predict prices, you can get pretty accurate predictions short term. Of course, it doesn't work forever but what system does? What a neural network is doing is also pattern recognition which it learns from market data.
Very, very few actual academics believe the market is totally random. The problem is that if you look solely at price action, it behaves almost identical to a random walk because a large collection of human beings trading the markets fade between being rational and irrational at random cycles and sometimes they are in sync, sometimes they are not. This being the case, the market viewed as a black-box is random. When you see a paper about how the market is random, usually it only means the price action appears random when you don't take into consideration the structure of the market, and it is a mathematical FACT. It doesn't necessarily mean that the market IS random once you start to analyze various parts of it. However, if you start to study the machinery it starts to become less random because you can find correlations between various things, or you can predict what other human beings are thinking at a particular time. Perhaps you are listening to crackpots who claim to be academics.
More advanced papers studying markets have been coming out over the last few years, and many of the papers have some success at predicting things. Why the hell would an academic who wrote the paper say the market is totally random when they can predict things moderately successfully?
I am a PhD math student. Mathematics is FACT, and I can tell you that academics are like wolves. They are just waiting to find an error in your paper. They will eat you alive if you are wrong about anything. This is a good thing, as it makes it so you have to be very precise, and you have to have completely, logically sound arguments.
I took some chemistry in high school.
Thank you, but let's see how long I last first...
I also fully agree with your statement, both with regard to individuals, and the vast amount of pseudoscientific research on which some disciplines are unsoundly based.
For someone who takes great joy in questioning one's surroundings, it can be excruciatingly difficult to accept most people's desperate need to cling to familiarity and routine. For me that defies the very reason to perpetuate one's existence...
What do you think makes Nietzsche an authority to speak about facts?
This is the old unsolved debate between realism and empiricism.
Nobody knows the answer. Nietzsche did not know either.
I'm only interested in lies that work. They don't need to be exactly THE TRUTH.
Most people that seek a PhD have personality problems, they cannot face reality and the university is a way of hiding from life. I tell you so because I have been there. Those that write papers about the market should first trade a bit to try to understand it. Most PhDs I have met have this:
http://en.wikipedia.org/wiki/Asperger_syndrome
You may be different. But I see the contradiction in your post:
"You realize they are probably a lot more educated than you are? Many of them are also more intelligent? "
"Mathematics is FACT, and I can tell you that academics are like wolves. They are just waiting to find an error in your paper. They will eat you alive if you are wrong about anything. "
Intelligent wolves?
Im sorry, but you are wrong. PhD's are no different than anyone else, though my experience is limited to those that specialize in science. Not all of them are more intelligent than the average person, but many of them are. Some of them have quirks, but so do guys that play DnD or WoW in their parents basement and never went to college, or dropped out like my roommate did in undergrad (and he did it to play WoW).
I work full time for one of the bigger trading platform companies I won't mention because my colleagues regularly come to this forum. I go to school part time for my PhD. For fun I like to do outdoor activities like hunting, hiking, boating, etc. Pretty much everyone I met at 3 universities I have been to are exactly the same. People trying to get a very good education so they can get a good job but otherwise normal in every way. Its not surprising that so many people in my age group 21-30 are continuing education since we have a 24 percent unemployment rate in this economy if we don't.
At the rural community college I went to there were farmers and mechanics in my calculus classes. One of my professors there was a full time professor and full time farmer. Every once in awhile you get someone like you described, and usually they are just brilliant weirdos. They still have contributions to science which are usually very abstract and it takes awhile for more practical people to find applications for them. The majority are still normal people you wouldn't be able to tell the difference between them and from someone on the street. They still go out with their friends skiing, hiking, camping, drinking, etc., and even though I may be an example of a mildly introverted math guy, most of them are very extroverted people. Many of them have full time jobs where Aspergers would probably be a detriment.
One of my classmates works in the natural gas industry making big bucks as far as I can tell, and he is pursuing a PhD. Another one worked for a firm as a database programmer before going full time. I haven't met everyone yet, but they look, act and dress normally. There are actually a lot of really beautiful girls that are pursuing math PhD's as well, and believe me, you would not ever assume they are the stereotypical ugly science lady with Aspergers.
If you still don't believe me, then consider this. There are not enough jobs at universities to allow for even HALF of the students getting PhD's to become professors. In fact, about 80 percent of us will eventually work in industry, and probably make a lot more than our professors do which is something our professors readily admit. That being said, tenure track positions are very nice and laid back with perks you won't get in the corporate world. It is one reason why its so cut-throat. There is a lot of competition to get Post-Doc positions, as well as tenured track positions and one measure they use to pick you for such positions is your number of publications. The problem with this is that many times people pump out shit papers just to get published. This is particularly common among Chinese grad students, but there are so many of them that is probably the reason I notice it more. However, this is not exclusive to papers on trading. It happens in pretty much every single field there is.
Reputable journals and conferences don't stand for it, so if you can identify the ones that are good, you will get decent well-thought-out papers about 99 percent of the time. Part of being a grad student is learning to review papers and throwing out the crap ones, as well as learning the correct sources to get information. Before I moved, I worked in Houston in computer vision. There were slews of crap papers in the smaller conferences, but the big ones such as CVPR only has a 5 percent acceptance rate. Always look at the conference/journal the paper comes from before you read it. Then, look up the conference/journal's acceptance rate. Generally, the lower it is, the better the papers are.
I can understand if someone is a little confused after reading a bullshit paper when they don't have these skills or is unaware of the system, however that is not really the good scientists fault. There are fakes in every discipline, just look up automated trading strategies for sale on Google some time.
I wrote a much more detailed explanation but I will explain why this thread died out.
The esoteric knowledge needed to profit from random markets is the the knowledge to find profitable patterns and the marketing savy to change the change the nomenclature and the traditional definition of random.
The esoteric knowledge needed to profit from random markets is the the knowledge to find profitable patterns and the marketing savy to change the change the nomenclature and the traditional definition of random.