Mathematics skills for discretionary trading.

Quote from nononsense:

gnome,

You must have picked up the forensics idea from Jonathan Swift's reflections on "the Market".

Meantime, secure on Garraway cliffs, A savage race, by shipwrecks fed, Lie waiting for the foundered skiffs, and strip the bodies of the dead."

nononsense
:D
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Actually, no. This one is my own. But I have recalled many, many times my first chemistry lab in college. It was to write down as many "observations" as I could about a burning candle. When the graded lab was returned, the professor included a list of some 80-ish possible observations. Nobody in the class got anywhere near that many. I can't tell you what a profound impact that one simple lab has had on my professional life.

And then there's that Yogi Berra truism... "You can observe a lot just by watching."
 
Quote from gnome:

Actually, no. This one is my own. But I have recalled many, many times my first chemistry lab in college. It was to write down as many "observations" as I could about a burning candle. When the graded lab was returned, the professor included a list of some 80-ish possible observations. Nobody in the class got anywhere near that many. I can't tell you what a profound impact that one simple lab has had on my professional life.

And then there's that Yogi Berra truism... "You can observe a lot just by watching."
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I fully agree.
Be good,
nononsense
 
I hate to say it, but simply being able to do simple calculations in an instant is the #1 math skill for a discretionary trader.

I know profitable career traders who get hysterical when Google goes from 180 to 200, but only moderately interested when Stock X goes from 3.50 to 4.00.
 
hi,

I actually just finished my math undergrad a year ago. I don't think have a degree in math gives me any type of edge whatsover.

The most valueable thing I take away from studying math undergrad is that it changed my thinking in regards to challenges or problems in anyway....When faced w/ a decision now, I tend to be able to isolate the most important issues and think in terms of what action would lead to what outcome etc. Its very hard to put in works but studying math gives you a great mind for attacking issues that can seem complicated and overwhelming. It also helps greatly to break down huge problems into steps that lead to a solution.

But stuff like that doesn't necessarily give you an edge over somebody that doesn't know what an intergral is.

So I guess in short....in my own personal expirience....no 'book learned' math skills help me trade. But the way math taught me to solve problems, I think is valueable in everything.

Now....I don't know much about options, but I imagine statistics/financial analysis may be extrapolated there a bit more directly.
 
I think that mathematics has not a damn thing to do with trading. The setups I see day after day have more to do with making the crowd wrong than any conceivable mathematical modelling. To paraphrase Shakespeare, "The are more forms of manipulation than are dreamt of in your mathematics, Polonius".
 
Quote from John Merchant:

I think that mathematics has not a damn thing to do with trading. The setups I see day after day have more to do with making the crowd wrong than any conceivable mathematical modelling. To paraphrase Shakespeare, "The are more forms of manipulation than are dreamt of in your mathematics, Polonius".
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Hypo, that's why you end up going back to, looking for a 9-5 every three months (unemployment benefit cycle). :D
 
My trading career is 9 years old, and I've yet to make use of any math beyond grade school level. Sure, MIT quants can be successful in the markets, but most successful traders I know have no need for Algebra, let alone calculus in their trading.
 
combine math with common sense and you might have a powerful set.

there are some traders who are brilliant in math but suck in trading because they have no common sense. they're too square-headed to grasp basic human psychology or how things just are without math.

and then there are the local average joe's who might have some common sense but totally suck in trading because they lack the ability to comprehend anything that's slightly complex. they fail from over-simplication.

nonetheless, higher math is better than no math. that background will serve you well.

just don't be retarded... like trying to find an algorithm to fit a square block into a circular peg.
 
KTMEX. I make a cool grand a day consulting. When I can make that much trading, I will quit working. So far you have failed to show me the way! But I believe that Saint Jack will!

"Oh Lord, woncha ya buy me
A Mer-cedes Benz!
My friends all drive Porchies,
I must make a-mends!
Worked hard all my laftime,
No help from mah Fr-iends!
Oh Lord, woncha buy me
A Mer-cedes Benz!"
 
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