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Steve:
I don't disagree with what you wrote. However, I'll add one thing: Let's assume
Trader J or Omega Head is right in his assumption and take it to its hilarious
conclusion. You now work for BOX Omega, the creation of some mad programmer 100
years ago. And all markets are now being traded with computers...It's no longer
possible to compete with these computers because programmers have now been able
to surpass the ability of mere humans to make decisions. All trading has now
been reduced to computation ...
Uhhhh...folks...if it was THAT programmable, the freakin' boxes would all be
doin' the same thing! They'd be the easiest freakin' sheep to trade against.
They'd all have sifted their way to a standstill and every time one of them went
to trade, they'd all trade, ad nauseum...
It just doesn't work that way.
I agree some parts of trading are automatable. That doesn't lessen the
importance of knowlege of the markets. In fact, it puts a premium of those of us
that can think, react, and use our insight to take advantage of the quick herds
of sheep roaming the electronic fields of trading these days. We're now the
quick nimble mountain fighters, taking our shots as that fat grazing herd moves
into view, and then hiding behind the rocks when they raise their big shaggy
chip-filled heads....
Like that mental picture, Neal?
Best,
Tim Morge
Steven Buss wrote:
>
> I'd add just a few caveats to the essential point that Trader J and Bob
> Fulks made. The caveat speaks to the objection that Tim Morge made in a
> separate reply.
>
> The caveat is simply this: I'm not sure that "programming skills" per se
> provide a fundamental advantage over time. Equally, if not more, important
> is one's ability to observe market behavior and to develop (or borrow from
> reading) a theory of that behavior that can be designed into a program
> concerned with trading. There are alot of "programmers" out there who won't
> ever be successful because they don't take the time to observe market
> behavior and/or develop their own coherent set of theories about the market.
>
> I think this is close to the point Tim Morge is making. He's saying that
> there is knowledge about market behavior that a "mere programmer" can't
> compete against. I agree with him on this. I believe though that Tim
> overstates the case by underestimating the extent to which "knowledge"
> (including his knowledge about market behavior) can be captured through
> robust software analysis and design techniques and re-expressed in the
> language of a computer program. This is the point that Bob Fulks makes re:
> the knowledge required for chip design.
>
> I would take Bob's point a step further. In institutional settings, over
> time, even mediocre "mere programmers" as a group may be very competitive
> given the longevity of their trading program work product.
>
> For individuals rolling their own, I think the situation is different. To
> me, the knowledge that one must have to build a trading system that has odds
> that I feel comfortable with is intimidating. But there is an enormous
> amount of market knowledge in the public domain that one can incorporate
> into one's consciousness through mere reading. So, my proposition (hope?)
> is this: that the individual programmer/traders who become successful most
> rapidly will be readers....
>
> Steven Buss
> Walnut Creek, CA
> sbuss@xxxxxxxxxxx
> "There's nothing more practical than good theory."
> -----Original Message-----
> From: Bob Fulks <bfulks@xxxxxxxxxxxx>
> To: Trader J <editorial@xxxxxxxxxxxxx>
> Cc: Neal T. Weintraub <thevindicator@xxxxxxxxxxx>; Steven Buss
> <sbuss@xxxxxxxxxxx>; omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
> Date: Monday, August 03, 1998 6:23 PM
> Subject: Re: Trading as a way to financial success (a reply)
>
> >At 7:28 PM -0400 8/3/98, Trader J, or Omega Man, (or whatever) wrote:
> >
> >>I tell young traders: Work on your automation/systems. Don't buy mine.
> >>Build your own. Know which way you want to trade - then automate
> >>everything. Decide what you want the machine to do, and make it work for
> >>you. When it becomes entirely machine against machine, the best
> programmer
> >>wins.
> >
> >You got it man!
> >
> >I worked in the field of designing software tools used by designers of
> >microchips. For many years, a really good chip designer could run rings
> >around the best software systems. They were "creative", had "intuition",
> >and could see things that the machine couldn't see. Then it was
> >neck-and-neck for a while as the humans fought to stay ahead.
> >
> >Then, the software moved ahead and now there is no looking back. No company
> >would ever consider designing a complex chip by hand anymore. Now, software
> >will win by at least an order of magnitude.
> >
> >The same happened with mechanical design.
> >
> >It is only a matter of time with trading. Some of the brightest software
> >guys I had quit and went to work on Wall Street where they were paid
> >ridiculous sums. They are given supercomputers to play with and treated
> >like gurus.
> >
> >The key is that software can continue to accumulate knowledge over time.
> >Each new person who works on a program adds new features to what already
> >works. It only gets better over time. Whereas people retire and die and
> >take their secrets to the grave with them, and each new generation largely
> >has to start over.
> >
> >Why do you think there is always such a shortage of computer programmers?
> >
> >"When it becomes entirely machine against machine, <and it will soon>, the
> >best programmer wins."
> >
> >Bob Fulks
> >
> >
> >
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