This is - The Game & META
- Thread starter Nobert
- Start date
Doesn't correlate to the markets in any way, in my mind. I might be biased because I played MMORPGs for a long time, so know what the Brit is speaking about. (And he's never played EQ, which never had the problems he's describing.)
Because an MMORPG has a fixed endpoint for every "stage" (or expansion), an end goal. The markets do not.
The market is not a co-op endeavor where John Nash's theory applies, which is kinda' what I am getting the author is speaking of. His theory applies perfectly well for group-think, which is what co-op MMORPGS are. The markets are not.
His whole spiel about the "meta" of a game, in how every participant will gravitate towards the easiest way to become number 1, to be the best, does not apply to markets, or to good MMOs like EQ. Everyone has a role, and the littler peeps contribute to the whole to achieve a successful outcome, FOR THE GROUP.
Reminds me of John Wooden...
timestamped...
"A player who makes a team great is more valuable than a great player. Losing yourself in the group, for the good of the group, that's teamwork."
In the markets, there is no team. There is no "meta". There is no group-think. There is simply an endless horizon with no goal except for the individual on a path to have more money than he/she had before they started on the path.
One could argue that the r/wallstreetbets crowd achieved this level of group-think when they went after GME and AMC shorts earlier this year, but they were not doing it because there was a "meta" mentality. They were doing it to enrich themselves, and hoped they got some good dosh for it.
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Strategies that "don't work anymore" -- when a trader talks about those, or says that "no strategy works forever," my inference is that the trader lacks a basic model of how markets actually work.
A trader who develops one or more basic models of how markets actually work does not bother with such "strategies," because the basic workings of markets are constant across all markets, at all times, & for all timeframes.
If you can develop a model, or models, of how markets work, why would you bother with strategies that are at the outset considered ephemeral ?
This view chimes with the observation in the above video that
A basic model of how markets actually work enables a 100+ method, and all the ephemeral "strategies" are sub-50.
An important caveat is that having a basic model of the market is not sufficient -- trading it is a different task, and especially difficult if one is at the same time elaborating and refining the model, or models -- just like the video reference to multiple metas and the need to coordinate them.
A model may precisely capture important nuances, seeming contradictions, and "surprise" events in the market, but that does not assure that the trader will detect and respond appropriately to the modeled-scenarios when they instantiate in real-time, especially if there are multiple inter-related models that require simultaneous coordination.
In my opinion, the solution here for the trader is:
A trader who develops one or more basic models of how markets actually work does not bother with such "strategies," because the basic workings of markets are constant across all markets, at all times, & for all timeframes.
If you can develop a model, or models, of how markets work, why would you bother with strategies that are at the outset considered ephemeral ?
This view chimes with the observation in the above video that
"... the existence and knowledge of the meta way to complete any task renders every other approach of that task at best inferior and at worst completely pointless. To put that simply, if there exists a way to catch a 100 fish in an hour and another way to catch 50 of the same fish in an hour, why would you ever choose the 50-method ? You'd be limiting yourself, which means the 50-method may as well not exist, it's completely outclassed."
A basic model of how markets actually work enables a 100+ method, and all the ephemeral "strategies" are sub-50.
An important caveat is that having a basic model of the market is not sufficient -- trading it is a different task, and especially difficult if one is at the same time elaborating and refining the model, or models -- just like the video reference to multiple metas and the need to coordinate them.
A model may precisely capture important nuances, seeming contradictions, and "surprise" events in the market, but that does not assure that the trader will detect and respond appropriately to the modeled-scenarios when they instantiate in real-time, especially if there are multiple inter-related models that require simultaneous coordination.
In my opinion, the solution here for the trader is:
- Trading at higher time frames,
- Trading fewer tradables, and
- Trading automation (write software! -- one more task for the trader...)
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