tag:blogger.com,1999:blog-20374666.post8219135503470720760..comments2024-03-05T07:50:04.017-05:00Comments on Stockbee: The search for profitable ideasPradeep Bondehttp://www.blogger.com/profile/16750002566366368685noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-20374666.post-60842532403229011492007-02-22T11:51:00.000-05:002007-02-22T11:51:00.000-05:00Brett Steenbarger, PhD is a PhD in psychology. Mos...Brett Steenbarger, PhD is a PhD in psychology. Most of the stuff on his site is very basic stuff for building mechanical trading systems. It is more suitable for absolute beginners.<BR/><BR/>High frequency finance is completely different field. It uses different kind of models and the creativity invloved in it is different.Pradeep Bondehttps://www.blogger.com/profile/16750002566366368685noreply@blogger.comtag:blogger.com,1999:blog-20374666.post-89497835811337894572007-02-21T17:04:00.000-05:002007-02-21T17:04:00.000-05:00Brett Steenbarger, PhD on mechanical system creati...Brett Steenbarger, PhD on mechanical system creation, " Your best ideas will come from intensive observation, but some of the best ideas are the simplest and most straightforward."<BR/><BR/>I don't think trading is similar to advertising. Observation #1.Unknownhttps://www.blogger.com/profile/07940721399571851897noreply@blogger.comtag:blogger.com,1999:blog-20374666.post-8522882493463823282007-02-20T00:29:00.000-05:002007-02-20T00:29:00.000-05:00I wouldn't necessarily call it "craft". My own me...I wouldn't necessarily call it "craft". My own methods involve using descriptive statistics to identify a potential trade idea and then using inferential statistics to test the robustness/validity. <BR/><BR/>The key is to identify significant patterns that actually translate to a structural or informational edge. Victor Niederhoffer and his traders test over 100 hypotheses/day based on their own sharp observations. Of course the majority get thrown out but the ones that pass the tests are obviously profitable. This idea of "throw everything at the wall and keep whatever sticks" is common among successful quant discretionary and system traders. It all starts with observations, not ideas.Unknownhttps://www.blogger.com/profile/07940721399571851897noreply@blogger.comtag:blogger.com,1999:blog-20374666.post-88621169341555073962007-02-19T08:38:00.000-05:002007-02-19T08:38:00.000-05:00That is a craft based approach to trading. It is n...That is a craft based approach to trading. It is not very suitable for automation and scaling.<BR/>There are hundreds of automated systems currently running in the market, they use very different logic and based on scientific principal and have bilions of dollars behind them.<BR/>High frequency finance is an entirely different field.Pradeep Bondehttps://www.blogger.com/profile/16750002566366368685noreply@blogger.comtag:blogger.com,1999:blog-20374666.post-59154280053009277602007-02-17T12:56:00.000-05:002007-02-17T12:56:00.000-05:00A lot of the creativity in daytrading comes from s...A lot of the creativity in daytrading comes from simply observing the market for hours upon hours. Patterns will emerge and you will develop an intimacy with important market internal indicators that is impossible to learn explicitly by reading books or articles. You learn how different indicators interplay, especially certain market internal sentiment indicators and external indicators such as other markets. <BR/><BR/>One of my favorite relationships that I have discovered is the tendency for options market makers to lower the implied volatility premium when liquidity enters the market measured by internal and external breadth indicators. <BR/><BR/>To generate solid day trade ideas requires probably about 80% astute observation and only 20% rationalization.Unknownhttps://www.blogger.com/profile/07940721399571851897noreply@blogger.com