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jose, i agree with you.
but i think i may add a small point. whatever we
do, we need to believe in it. at least i am that way. sometimes i earn money
although i dont believein the position. those times geerally i ted to take the
profit early. and sometimes when i am on loss, i wait for the position with
uncessary patience, those times generally i bypass the stoploss.
why do we do this although we know system
works???
because, we dont believe in the system. what would
make one believe i the system?
i think this is the critical question here.
sometimes if you construct a system which is complex enough for you to make you
believe in the system, or sometimes if you can backtest all the features of your
system neatly and get good results and you dont look for complexity or anyother
thing that may affect your feelings, that may also be enough for you to believe
i the system. in that case you are assuming the past performance will reflect
the future. but having this very assumption i mind also may decrease your belief
in the system..
i dont know what would the christian thing to do
here : ) but i do know that tastes, colors and what it takes to make you believe
in a system varies a lot.
regards,
dr.torque
----- Original Message -----
Sent: Monday, March 14, 2005 9:01
PM
Subject: [Metastockusers] Re: Making
Money Shooting Deer in the Woods
Complexity vs simplicity - it all comes down to the
Occam's Razor
philosophy. The minimal approach, the path of least
resistance, is
often the better one.
A favourite quote:
"Dilute
simplicity, and it becomes complex" - William Schamp.
jose '-)
http://www.metastocktools.com
---
In Metastockusers@xxxxxxxxxxxxxxx,
"superfragalist" <jackolso@x...
>
wrote:
>
> Why newbie's seek complexity is certainly a complex
issue. There are
> a number of possibilites, including the ones you
mentioned.
>
> Newbie traders look for anything and everything
that will make them
> money. Once they find something, say a chart
pattern, they get
> hooked and tell other people about the amazing chart
pattern that
> works for them. The other newbie's are mesmerized!! It's
deer in the
> headlights for the guru's.
>
> Of course the
chart pattern doesn't work for 95% of the other
> want-ta-be's who try
to use it--not because it's bad, but because
> the newbie using it can't
explain all of the things that the
> computer in their head is doing to
filter those charts. Even if they
> could explain it, others don't have
the mechanism to compute it the
> same way. That's what traders mean
when they say a system has to fit
> the person using it.
>
> In addition, some newbie's believe that doing a complex analysis
of
> the market is going to turn up something that other people
don't
> know or can't see--and it does. It turns up complexity, more
and
> more of it. But they feel good about themselves because only
a
> handful of people can deal with the complexity that they can.
>
> The opportunity costs of searching every plug-in, Gann
method, chart
> pattern system or whatever is very, very expensive. As
I've said
> before, it makes the tuition at Harvard look cheap.
>
> I can't explain why so many people disregard the simple. But
they
> do.
>
> Here are my three rules of simple:
>
> 1. Simple is always the best.
> 2. Simple is the hardest for
most people to find.
> 3. Simple is the least used.
>
>
Here's an example: If the market is in an uptrend, something around
>
60% of the stocks are advancing on a daily basis. That means that
> any
system generating a reasonable size portfolio should be able to
> find
60% winners--at least--especially if it picked all the
> candidates
using a random number generator.
>
> Newbie's have been told to
test a system across all kinds of market
> conditions! Doing that covers
over the fact that when 60% of the
> stocks are advancing, this system
is only finding 40% that move up.
> Duh! Let's skip that experience.
>
> That's why I recommend Roy's newsletter--it has explanations
that
> anyone can understand and use now to make money. Unfortunately,
the
> majority would rather keep thrashing around in the woods looking
for
> a deer to shoot than to simply stroll over to the supermarket
and
> pick up the sweet filet ready to put on the barbi.
>
> Oh well!
>
>
> --- In
Metastockusers@xxxxxxxxxxxxxxx, "metastkuser"
>
<andysmith_999@xxxx> wrote:
>
> "There are easy ways to
make money and hard ways to make money, 99%
> of the people choose to
make it hard." -- I am interested in the
> psychology behind this. I
believe there are 3 possible reasons:
>
> 1) because doing it
the hard way (lots of optimization, complex
> system development,...)
can pose an intellectual challenge to some,
> and this can be more
"thrilling" than a boring system which makes
> money. Not good.
>
> 2) because traders believe that the "hard way", when it
works,
> yields better returns than the "easy way". Not sure if this is
true
> or not.
>
> 3) because the hard way give the trader a
differentiation/edge over
> others using the easy way. Probably not
true.
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