Saturday, 3 October 2015

Trading cookies

20:36 Posted by The Thalesians (@thalesians) No comments

I've spent nearly a week in the USA, mostly to present my research at various funds, public talks and also at the Fed. I have admittedly, spent a rather large amount of my spare time sampling the most calorific parts of American cuisine: burgers, cheesecakes and cookies (including the one pictured above, which I'd describe as more like a quasi-cake, than a cookie). It has got to the stage, where I suspect I won't be having another burger for a very long time (too much of good thing I suppose).

I suspect, not everyone will agree with my taste, when it comes to food. The thought of a burger dripping in cheese and fat, is likely to make some seem less than hungry. However, as someone said (no amount of Googling will likely reveal the original quotation), you'll never make friends over salad. I would conjecture though, there's a distinct possibility of making friends over a burger. It might seem a bit irrelevant, talking about food on this blog and the matter of taste when it comes to food, given this blog essentially purports to be about "finance".

However, bear with me! When you invest, what are your main motivations? Do you prefer higher risk strategies, which offer more reward, but potentially more reward. Do you like more quantitative trading strategies, or would you prefer to use more in way of discretion when you trade? The questions are indeed endless. Just as with food, where tastes are not shared by all, when it comes to these investing questions, often there will be no answer which is suitable for everyone. One person's favourite trading strategy, might be totally inappropriate for another person.

It's something I can often encounter when I'm presenting my research on various systematic trading strategies. Often it is based upon some sort of basic premise, whether that is some of sort intuition based on economics or general market behaviour etc. However, if you don't agree with the general rationale, then it's difficult to see how you can believe in a general strategy. More unusual trading strategies, which use novel sorts of data, can often face an uphill battle to face acceptance, for this reason. In a sense, your doubts need to be disproved.

Without having an underlying rationale (or if you have difficulty believing in one), it can be troublesome to discern between a random trading strategy and one you have developed. That's why whatever rationale you have needs to be fairly well thought. Experience, is probably one thing which helps most of all when attempting to understanding the rationale behind a trading strategy (or indeed the converse, that it has no rationale and shouldn't be used!)

I'll be in Paris 6-9 Oct at the WBS Fixed Income conference, where I'll be hosting a systematic trading workshop and at some of the events below.

Like my writing? Have a look at my book Trading Thalesians - What the ancient world can teach us about trading today is on Palgrave Macmillan. You can order the book on Amazon. Drop me a message if you're interested in me writing something for you or creating a systematic trading strategy for you! Please also come to our regular finance talks in London, New York, Budapest, Prague, Frankfurt, Zurich & San Francisco - join our group for more details here (Thalesians calendar below)

05 Oct - Boston - Saeed Amen - Trading Thalesians Book Talk / PyThalesians Python Interactive Demo (Boston Algorithmic Trading Meetup Group)
09 Oct - Budapest - Taylor Spears - On the Sociology of CVA
14 Oct - New York - Dan Pirjol - Can one price Eurodollar futures in Black-Derman-Toy? (Thalesians/IAQF)
21 Oct - London - Robert Carver - Lessons from systematic trading


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