Trading: Art or Science?
- Thread starter ceasar73
- Start date
Art, Science or a both?
thanks
ceasar73.
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
- Joined
- 30 June 2007
- Posts
- 7,200
- Reactions
- 1,231
90% art, 10% science.
*sits back and waits for Trembler and tech/a to let us know what time it is*
*sits back and waits for Trembler and tech/a to let us know what time it is*
tech/a
No Ordinary Duck
- Joined
- 14 October 2004
- Posts
- 20,500
- Reactions
- 6,713
Discretionary --- ART
Systems ---- SCIENCE.
Extreme positve results --- LUCK
Poor results ----- None of the above.
Systems ---- SCIENCE.
Extreme positve results --- LUCK
Poor results ----- None of the above.
wayneL
VIVA LA LIBERTAD, CARAJO!
- Joined
- 9 July 2004
- Posts
- 26,441
- Reactions
- 14,124
Define science... A lot of what claims to be science these days isn't anything of the sort. 
Sdajii
Sdaji
- Joined
- 13 October 2009
- Posts
- 2,306
- Reactions
- 2,742
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.
- Joined
- 1 May 2007
- Posts
- 2,904
- Reactions
- 52
Trembling Hand
Can be found on the bid
- Joined
- 10 June 2007
- Posts
- 8,852
- Reactions
- 205
I think its becoming a religion around here!
Trembling Hand
Can be found on the bid
- Joined
- 10 June 2007
- Posts
- 8,852
- Reactions
- 205
- Joined
- 22 November 2010
- Posts
- 111
- Reactions
- 0
Or BULL--ART !
- Joined
- 30 June 2007
- Posts
- 7,200
- Reactions
- 1,231
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. $$ in the bank. Career trader. It doesn't happen that way and has never happened that way. The Turtle experiment proved that a bunch of intelligent people given exactly the same 'science' will come out the other end with vastly different results. Of course some didn't follow the rules. But even for those that did, they just couldn't make it work... somehow it just didn't happen.
On another thread I suggested that the missing link was attitude. An attitude of excessive fear or greed will cause you to make errors. An attitude of relaxed indifference allows you to see the markets as they really are (as opposed to how your particular 'model' sees it).
None of this detracts from the brilliant science that some guys employ. I'm not in that league, but I have seen in my own trading how it can help, even with my limited application. eg. a simple backtest will tell you that you should be extremely wary about buying a spec stock that has risen >6% at the next open, and if you do, you'd probably not be wanting sell at the close. Chance of failure is extremely high. But if you can use your art, maybe you can see which few stocks will continue on upwards after their 6%+ rise.
Take an art like painting. Millions of people have studied art world wide and yet how many get to paint like Van Gogh? There's even a phrase that describes the process of trying to make it - "the starving artist". You can use exactly the same paints as Van Gogh, the same child-like brush strokes, you can go to Arles in the summer time, you can even cut part of your ear off, wrap it up and give it to your lover as a gift..... none of it will help. You might know all the art terminology but can you make a living doing it? How many do? Very few. Probably the same percentage as traders.
If trading was science, you'd just study the trading course (like chemistry) and away you go. $$ 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.
Trembling Hand
Can be found on the bid
- Joined
- 10 June 2007
- Posts
- 8,852
- Reactions
- 205
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
- Joined
- 30 June 2007
- Posts
- 7,200
- Reactions
- 1,231
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.
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.
tech/a
No Ordinary Duck
- Joined
- 14 October 2004
- Posts
- 20,500
- Reactions
- 6,713
wayneL
VIVA LA LIBERTAD, CARAJO!
- Joined
- 9 July 2004
- Posts
- 26,441
- Reactions
- 14,124
Craft works for me.
- Joined
- 22 November 2010
- Posts
- 111
- Reactions
- 0
TREMBLING have you found Anders Ericsson helpful for your trading ?
Trembling Hand
Can be found on the bid
- Joined
- 10 June 2007
- Posts
- 8,852
- Reactions
- 205
- Joined
- 30 June 2007
- Posts
- 7,200
- Reactions
- 1,231
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).
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).
Similar threads
