There was the Mark Haines bottom and now we have the Nitro bottom.
Kudos to MMs
- Thread starter nitro
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Being a "frequentist" is bad in [today's] markets.
I could do something far simpler I suppose, I could just count the number of times a specific word comes up on a daily basis, and assign a higher prior to that event. I have not moved to Laplacian-Bayes yet, but this would be a nice addition.
It would not be easy. I would have to gather all the highly sensitive market words, then I would have to scour some source to get the story and rank it somehow. It is certainly doable, but not a trivial undertaking. Also, it would make my system even less back-testable...
Worth the effort. Maybe I will make this a very high priority for the next version.
People often go about the endeavor of trading in the wrong way. This thread chronicles my journey in achieving complete objectivity, hoping one day to implement complete automation.
Think of this in relation to the intellectual journey that Darwin had. First he went on the on a voyage chronicled in "Voyage of the Beagle", gathering evidence, cataloging, finding correlations between the evidence, etc. Then, once he had his idea and the evidence to back it up, he wrote the "Origin of Species".
This thread is mostly at the stage of the "Voyage of the Beagle". The difference is that in markets, you must experiment with real money, because you are not just testing a thing "out there", but yourself as well.
One final observation. People often feel they have to understand everything at once, to go all in or not at all. Other people never leave the training wheels and give it a real try. I suggest that we should approach trading in the way this book describes, by making "Little Bets"
http://www.amazon.com/dp/B0043RSJTU/ref=pe_113430_20607060_pd_re_dt_dt2
and constantly refining your thinking, to complement linear procedural thinking with "crazy ideas". If your failures don't cost much and you get lots of information feedback from it, as explained in the book, it is well worth it if you can form a theory from the failures. This is harder than it seems in markets because there are so many moving parts all of which have time-changing dynamics. That is why a scientific thinking approach is so critical.
Anyway, more random thoughts.
Think of this in relation to the intellectual journey that Darwin had. First he went on the on a voyage chronicled in "Voyage of the Beagle", gathering evidence, cataloging, finding correlations between the evidence, etc. Then, once he had his idea and the evidence to back it up, he wrote the "Origin of Species".
This thread is mostly at the stage of the "Voyage of the Beagle". The difference is that in markets, you must experiment with real money, because you are not just testing a thing "out there", but yourself as well.
One final observation. People often feel they have to understand everything at once, to go all in or not at all. Other people never leave the training wheels and give it a real try. I suggest that we should approach trading in the way this book describes, by making "Little Bets"
http://www.amazon.com/dp/B0043RSJTU/ref=pe_113430_20607060_pd_re_dt_dt2
and constantly refining your thinking, to complement linear procedural thinking with "crazy ideas". If your failures don't cost much and you get lots of information feedback from it, as explained in the book, it is well worth it if you can form a theory from the failures. This is harder than it seems in markets because there are so many moving parts all of which have time-changing dynamics. That is why a scientific thinking approach is so critical.
Anyway, more random thoughts.
Manufacturing weaker than expected, markets selling off until they realize that the FED won't stand still for it. QEIII or some form of stimulus but on the same magnitude, is now on the table.
In all these Debt-ceiling talks with republicans, the FED is the Dems trump card. I understand the reason to be fearful of gigantic debts, but it is all a question of timing. Markets are really confused because they react to momentum and rhetoric, not logic.
In all these Debt-ceiling talks with republicans, the FED is the Dems trump card. I understand the reason to be fearful of gigantic debts, but it is all a question of timing. Markets are really confused because they react to momentum and rhetoric, not logic.
