• Australian (ASX) Stock Market Forum

Trading: Art or Science?

Discussion in 'Beginner's Lounge' started by ceasar73, May 2, 2012.

  1. ceasar73

    ceasar73 Well-Known Member

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    Art, Science or a both?

    thanks

    ceasar73.:)
     
  2. ROE

    ROE Well-Known Member

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    All investment techniques are part science part art because there are many unknown variables and forces outside the explanation of science.

    Like greed and fear try to put science to it and see what it spit out :D
     
  3. Gringotts Bank

    Gringotts Bank Well-Known Member

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    90% art, 10% science.

    *sits back and waits for Trembler and tech/a to let us know what time it is*
     
  4. odds-on

    odds-on Well-Known Member

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    Neither art nor science, it is 100% magic.
     
  5. tech/a

    tech/a No Ordinary Duck!

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    Discretionary --- ART
    Systems ---- SCIENCE.

    Extreme positve results --- LUCK
    Poor results ----- None of the above.
     
  6. wayneL

    wayneL Rotaredom

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    Define science... A lot of what claims to be science these days isn't anything of the sort. :sly::sly:
     
  7. Sdajii

    Sdajii Sdaji

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    Haha! Nice! :)


    It's obviously different for everyone. For some people, it's 100% science. Some of them fail and some thrive. I suppose for the 100% science people it depends on how good their science is.

    I think for everyone it's at least a bit science.

    For many people it probably fluctuates. It does for me. When I was starting it was about 85% art and 15% science, I was day trading and that's when I was by far the most profitable. Luck played a big part, especially early on in my first few weeks where I basically fluked about 10 times my initial money on extremely risky trades in extremely speculative companies I knew little about, but it can't have been pure luck since it went on for a few months. Even then I knew that as I learned more it would become more science because knowing how to do it as a science would stop me feeling comfortable doing it as art. Also, I started with all of about $2,000 and didn't mind risking it with arty methods, but once it was tens of thousands I was scared of losing too much, and once it was hundreds of thousands I really cared about not losing.

    Now it's about 75% science, 25% art for me, but it can fluctuate depending on the situation.
     
  8. skyQuake

    skyQuake Well-Known Member

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    Fix'd that for you :cool:
     
  9. Trembling Hand

    Trembling Hand Can be found on the bid

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    I think its becoming a religion around here!
     
  10. Trembling Hand

    Trembling Hand Can be found on the bid

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    Hope I didn't disappoint :D.
     
  11. motorway

    motorway Well-Known Member

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    A Craft

    That uses objective tools and methods.

    At its best it has an artistic beauty

    motorway
     
  12. 5oclock

    5oclock Well-Known Member

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    Or BULL--ART !
     
  13. Gringotts Bank

    Gringotts Bank Well-Known Member

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    Take a science like chemistry. So long as you have a reasonable intellect, you do the study and you can become a proficient chemist. Over a predictable period of time you can become very reliable in knowing what happens when you mix x with y. You can write a formula to represent the reaction. This formula is repeatable not just by you, but by every other chemist in the world. You say to a chemist in Italy - "mix x with y and you'll get z, and here is the formula for exactly how many z molecules you will end up with". A whole sky scraper can be built using science. A high % of chemists end up with a paying job.

    Take an art like painting. Millions of people have studied art world wide and yet how many get to paint like Van Gogh? There's even a phrase that describes the process of trying to make it - "the starving artist". You can use exactly the same paints as Van Gogh, the same child-like brush strokes, you can go to Arles in the summer time, you can even cut part of your ear off, wrap it up and give it to your lover as a gift..... none of it will help. You might know all the art terminology but can you make a living doing it? How many do? Very few. Probably the same percentage as traders.

    If trading was science, you'd just study the trading course (like chemistry) and away you go. $$ in the bank. Career trader. It doesn't happen that way and has never happened that way. The Turtle experiment proved that a bunch of intelligent people given exactly the same 'science' will come out the other end with vastly different results. Of course some didn't follow the rules. But even for those that did, they just couldn't make it work... somehow it just didn't happen.

    On another thread I suggested that the missing link was attitude. An attitude of excessive fear or greed will cause you to make errors. An attitude of relaxed indifference allows you to see the markets as they really are (as opposed to how your particular 'model' sees it).

    None of this detracts from the brilliant science that some guys employ. I'm not in that league, but I have seen in my own trading how it can help, even with my limited application. eg. a simple backtest will tell you that you should be extremely wary about buying a spec stock that has risen >6% at the next open, and if you do, you'd probably not be wanting sell at the close. Chance of failure is extremely high. But if you can use your art, maybe you can see which few stocks will continue on upwards after their 6%+ rise.
     
  14. Trembling Hand

    Trembling Hand Can be found on the bid

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    Gringotts you would be better served leaving the pop-pseudoscience behind and look into what actually is the science behind expertise development. Be careful, lots of myths there as well but may I suggest some reading for you,

    Anything by K. Anders Ericsson
     
  15. Gringotts Bank

    Gringotts Bank Well-Known Member

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    There's nothing pop or pseudo about it. Sports science has done the work there. Level of arousal (= fear/greed) makes a huge difference in being able to perform at one's peak.

    Or just ask any top AFL coach what the most important factor is amongst players on Grand Final day. The players that want it too much need to be settled down. The ones who are scared witless by the big arena need to be given confidence. Otherwise errors will happen and the opponent will get a sniff of blood.

    I'll have a look at Ericsson and get back to you.
     
  16. tech/a

    tech/a No Ordinary Duck!

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    No
    I like my version.
     
  17. wayneL

    wayneL Rotaredom

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    Craft works for me.
     
  18. 5oclock

    5oclock Well-Known Member

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    TREMBLING have you found Anders Ericsson helpful for your trading ?
     
  19. Trembling Hand

    Trembling Hand Can be found on the bid

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    It makes no difference if you have no SKILL.

    No skills = crap outcome.
     
  20. Gringotts Bank

    Gringotts Bank Well-Known Member

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    Right, and skill is akin to art in terms of who has it, and who doesn't. Sure it can and should be developed to the best level possible, but everyone has a ceiling on that side of things.

    If Guy McKenna (GCS coach) took his worst player and spent an entire pre-season dedicating all his time to coaching that one mediocre player, that player will still not come close to playing like Ablett Jnr. It just wouldn't happen. In fact it wouldn't happen if he spent 10 years doing it.

    I'm saying, once your skill has reached its ceiling, it's better to focus on attitude (which is also a skill, but one that few people develop at all).
     
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