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Ahh-hah ! You see this is where watching the equity curve would tell you that you are bouncing off trees rather than moving through the forest unimpeeded. Also, if you recorded your journey through a large forest rather through a simple patch of trees you would have a better gague on growth patterns of trees and hence your path.
Taking this a step farther, pine trees grow differently than redwoods. So, you would run into trouble if you took a recording of a journey through a redwood forest, and used it to guide you through a pine forest.
What people fail to understand is by virtue of picking some set of parameters we are optimizing. I see people with smug looks on their face when they say they don't believe in optimizing, but are hell-bent on making decisions with a 12,26,9 MACD.
It's like a social drinker berating an alcoholic. They both drink alcohol, it's just that the social drinker ensures he doesn't wake up in the gutter. Over optimizing is a disease just like over drinking.
Regards,
GaryJoseph Platt <jplatt@xxxxxxxxxxxxxx> wrote:
Lots of talk lately about Optimization, Overoptimization, Robustivity, Randomness, etc. Regarding optimization here is a copy of an email I sent to a FastTrack friend of mine recently....don't know if it makes any sense or not. ****************************************************************************************You know, most all systems depend on optimization at some level but one day when I was in a dreamy mood, (perhaps muscatel induced), this analogy with regards to optimization popped into my head. Takes a little imagination....Suppose a person decided to take a one mile walk through a well treed area of woods. He would have no trouble negotiating the path since the trees are quite visible and he could navigate a path right around them.Suppose further that he had been carrying some kind of an electronic
recorder with him (this is the part that takes a little imagination) and every step along the one mile stretch was recorded.Still feeling energetic he decides to pick up where he left off and try another one mile hike through the next stretch of woods. He reasons that it's not necessary to look for an unobstructed path, at least not as carefully as he did on the first stretch, because after all he has a recording of the whole journey and all he has to do is put it in the "play it again Sam" mode.The analogy doesn't have a very happy ending....he got through the second mile alive but just barely....you would hardly recognize him.But to be fair there is a difference between trees that, as far as we know, grow randomly and the stock market which arguably isn't totally random as many claim.****************************************************************************************I guess my friend got the email OK
but his only response was "watch out for the trees"......Joe PlattSend BUG REPORTS to bugs@xxxxxxxxxxxxxSend SUGGESTIONS to suggest@xxxxxxxxxxxxx-----------------------------------------Post AmiQuote-related messages ONLY to: amiquote@xxxxxxxxxxxxxxx (Web page: http://groups.yahoo.com/group/amiquote/messages/)--------------------------------------------Check group FAQ at: http://groups.yahoo.com/group/amibroker/files/groupfaq.html Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
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