When trading the pre race markets it seems obvious that you have to master "reading the market" in order to have any hope of long term success.
My question is do you consider this skill an art (i.e. aquired through practice, experience and instinct) or is it a science (i.e. developed through studying the mathematics of how the numbers interact with each other.)
Furthermore can this skill be taught or only learned by experience? Any Thoughts?
Reading The Market: Art or Science?
There is definitely an element of both, studying 1000s of markets one after the other over months and years you gain experience and skill in how to read the market moves what drives them and the characteristics and per-cursors to look out for when deciding on the likely price direction or entry & exit point.
From a scientific or mathematical point knowing when your presented with a opportunity where by entering the market at that moment your potential upside is far greater than the possible downside will also see you profit long term
From a scientific or mathematical point knowing when your presented with a opportunity where by entering the market at that moment your potential upside is far greater than the possible downside will also see you profit long term
I would also say that it is definitely a combination of the two.
I think you can be scientific in your approach, and that will definitely help you find an edge. Though I find that my best trades tend to come on instinct.
You can explain the scientific reasons behind a trade, though with instinctive trades its hard to explain why you did what you did. It just comes from experience and constant learning and refining your skills.
As for whether it can be taught, i suppose that is all down to who is teaching you.
I think you can be scientific in your approach, and that will definitely help you find an edge. Though I find that my best trades tend to come on instinct.
You can explain the scientific reasons behind a trade, though with instinctive trades its hard to explain why you did what you did. It just comes from experience and constant learning and refining your skills.
As for whether it can be taught, i suppose that is all down to who is teaching you.
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vankancisco
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- Joined: Mon Dec 14, 2015 8:54 pm
This is an opinion from a mere novice with regards to trading markets, but I find the best trades and opportunities come from applying simple logic and basic maths. It may be suitable for a very small number of people, but once you start venturing into the realms of art & science, you're probably going to be diverted from your primary objective.
I'd more or less agree with that.
You can explain art with science but not the other way around. You find a lot of traders get a 'feel' for a market but when it shifts they are out of business. So it's worth understanding what you are doing and how that works.
You can explain art with science but not the other way around. You find a lot of traders get a 'feel' for a market but when it shifts they are out of business. So it's worth understanding what you are doing and how that works.
Thanks for the replies. The concensus appears to be that reading the market is a combination experience, instinct and maths / probabilities. So it is a combination of both art and science.
If this is the case it leads me to wonder about the long term viability of automation as a stategy. Surely the "artistic" element referred to above cannot be incorporated into an algorithm, programme or computer model.
If this is the case it leads me to wonder about the long term viability of automation as a stategy. Surely the "artistic" element referred to above cannot be incorporated into an algorithm, programme or computer model.
I would say the artistic element of automation would be having the creativity to come up with a set of rules that work, or having an idea that could lead to doing so.
The scientific part would be testing it, and working out how to best execute it for best results.
The scientific part would be testing it, and working out how to best execute it for best results.
Fair point well made.oscar123 wrote:I would say the artistic element of automation would be having the creativity to come up with a set of rules that work, or having an idea that could lead to doing so.
The scientific part would be testing it, and working out how to best execute it for best results.
But I was wondering how you could incorporate human charachteristics such as instinct or intuition into a computer programme.
If it is possible to trade profitably using automation or computer programmes this would seem to contradict the notion that reading the market is a combination of both art and science and support the idea that analysing the market is purley a numbers game?
I don't see the two things as being strictly either / or, nor necessarily having to be both at once.
There are many ways to skin a cat.
Where computer programs do have an edge is reacting quickly, making fast mathematical calculations, continuously repeating actions without getting distracted, monitoring many things at once. One of its advantages is precisely that it has no emotions when carrying out its given rules.
However its probably true that someone 'reading the market' intuitively is probably picking up on lots of signals which can't easily be translated into a set of rules either. A computer also can't 'read' the horse that's playing up, or the tennis player who's choking.
There are many ways to skin a cat.
Where computer programs do have an edge is reacting quickly, making fast mathematical calculations, continuously repeating actions without getting distracted, monitoring many things at once. One of its advantages is precisely that it has no emotions when carrying out its given rules.
However its probably true that someone 'reading the market' intuitively is probably picking up on lots of signals which can't easily be translated into a set of rules either. A computer also can't 'read' the horse that's playing up, or the tennis player who's choking.
There is always a place for both manual and automation and each have there own advantages and disadvantages but you cant incorporate everything into a program where as there is things you cant do manually but even a very simple program could do with ease.
With manual trading you can react quicker and take advantage of situations that arise to additional information that was never or cant be put into a program - ie a horse starts to sweat before the start of a race this will have a influence on its price movement, a sharp manual trader will pick this up and act on it immediately at best the automation will wait for numbers to align before issuing its commands or maybe do nothing if its programmed to be looking for something else.
You can also get a feel for how the money is moving through a market when observing it and act accordingly where as a program is just looking at the raw numbers.
With automation you can monitor literally hundreds of markets all at the same time and with no emotion involved its just pure numbers based, and in certain instances automation will get the bet on much faster than any human could possibly react and do manually especially with markets like IR horse racing.
With manual trading you can react quicker and take advantage of situations that arise to additional information that was never or cant be put into a program - ie a horse starts to sweat before the start of a race this will have a influence on its price movement, a sharp manual trader will pick this up and act on it immediately at best the automation will wait for numbers to align before issuing its commands or maybe do nothing if its programmed to be looking for something else.
You can also get a feel for how the money is moving through a market when observing it and act accordingly where as a program is just looking at the raw numbers.
With automation you can monitor literally hundreds of markets all at the same time and with no emotion involved its just pure numbers based, and in certain instances automation will get the bet on much faster than any human could possibly react and do manually especially with markets like IR horse racing.