• Observation and deduction are the key to developing a trading strategy;
• Understand what is meaningful and what is random.
• Scientists have humility; They know their best theories are only approximations of reality.
• Knowledge, for a true scientist, is always provisional; Ongoing empirical tests generate further additional observations and revisions.
• Scientists remain open to data that may invalidate their hypothesis.
• Scientists focus on the process and not the outcome. A single winning or losing trade does not prove a strategy works — but it does provide some additional data.
• The aim of Science is to understand through observable phenomna, what is going on in reality. This, Scientific traders do not "Trade Without Understanding;"
• Since all scientists understand probabilities, they never Oversize positions;
• Recognizing errors is key to an objective mind. Thus, why Traders should be prepared to admit error: never average down, and always use stop losses.
Good stuff, Doc. Thanks!
Trade Like a Scientist – Part One: The Scientific Mindset
TraderFeed, June 15, 2007
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.