The Merriam-Webster dictionary defines truth as "the state of being the case" or "the body of real things, events, and facts" or "a judgment, proposition, or idea that is true or accepted as true." But really what is it? If water is falling from the sky I can say its raining. Is it the truth? In my geographic position I may be correct, water is falling on my head. Let's say my friend lives in the town over where the sun is shining. If I call him and say it is raining, they may not believe that because evidence in his surroundings state the opposite. In yet another area of the world, rain may not be falling from the sky but it may be quite humid outside in which water molecules are dense enough to say I feel damp but not rain... This example is merely anecdotal to the point of the matter. In terms of "data" the truth may be the average or, through the law of large numbers, the likeliness of a statement based on the data to be actual in practice. Merriam-Webster's third definition of truth is more akin to the term "conventional wisdom" which was coined by the economist John Kenneth Galbraith. He wrote, "We associate truth with convenience, with what most closely accords with self-interest and personal well-being or promises best to avoid awkward effort or unwelcome dislocation of life. we also find highly acceptable what contributes most to self-esteem." So put simply, what individuals may state on a day to day basis as truth are falsities that they believe in because they believe it is accepted by most and adds to the individual's self esteem. Within the confines of trading, this can be an explanation to why new traders may emphasis their winning trades whilst not speaking about their losses.
This leads to my conclusion that the "truth exists within its entirety", or in other words, truth is a shotgun not a sniper rifle. It can be as vague as it wants to be and is only limited by the data available. Hence, everyone in the world knows nothing. We play an international game of telephone, if only to crutch up our already inflated egos. In the essence of truth, what we consider conventional wisdom, fits the role of averages in data. It is convenient to assume that you are an above average student because you get a A average in class relative to everyone else in class. This ignores the population of everyone who's taken that class (and law of large numbers). If the data was available, and you did all the calculations, you may find you are in fact a D student. Another example, a lake is on average 3 feet deep, but you may be 6 feet tall and still drown in it. See the flaws? When the truth exists within its entirety, we are playing with the law of large numbers. The huge hole in this is... when is it large enough? The data we have for trading is nothing in comparison to the future data that hasn't come to existence yet (assuming the forex markets don't collapse soon). We can only optimize with what we have and test the systems with out-of-sample data to determine its robustness. The worst we can do is assume a back-test of a month and a win/loss ratio of 3:1 is sufficient. Now going back to the telephone game...
One of my buddies whom which is older, wiser and digging his way into the realm of finance talked to me on the phone one day and told me to forget everything I was going after and try to make as many financial friends in financial institutions as possible to get information from. My own uncle told me to forget about what I was doing and told me to find a way to get information faster. I politely accepted what they both said but do not believe in either of those statements entirely. Nicholas Nassim Taleb, author of the Black Swan, spoke about how humans have a way of tunneling information and that there really is no such thing as an expert. I believe his words carry more weight only because I observe the same thing. If I have expert friends in the financial realm its not gonna help if what is affecting the financial realm today or tomorrow is outside of the financial realm... for example, the Exxon Valdez oil spill in 1989. Am I to put the effort of having friends on the tanker so that I know quickly that it happened? It is an effort in infinite exhaustion. Plus, I don't believe friendship for the purpose of extracting information is really friendship at all. It is an unethical waste of time.
Now about tunneling information, I find it endlessly entertaining to have to write essays for classes when essays are just a load of @$!#. Excuse my language but bear with the emphasis. I will be only exercising what has already been done by thousands, no, millions of other students. I'd rather do numerous dissertations throughout my college career because that adds to the pot of human knowledge. When you write an essay, you take sources and quote or paraphrase their ideas to persuade or explain whatever the essay is about. Its been said, "when you plagiarize someone else's work, at least you're copying just one person's ideas; when you write an A paper, its because your copying a lot of people's ideas." I'm a bit guilty right now since I've done my fair share of tunneling in this written piece. So I'll create some new knowledge for you(I'm assuming this idea hasn't been done/disclosed yet).
In terms of forex trading: Japanese candlestick analysis that was started in the Western world by Steve Nisson is invaluable since candlesticks hold vital information about the fight between the bulls and bears, if you're curious about that subject alone look it up. I would like to take this information and have it coded in an EA, so that candlestick formations will be recognized as signals by the program. With this ability I will also attribute the use of multiple time frame analysis. With this subject I don't mean looking at it in terms of just three time frames like 15min, 1hr, and daily. No, I mean in terms of viewing patterns from 30sec,31 sec, 32, sec...1min, 1min 1sec, 1min 2sec...5min 1sec.... etc... to monthly. This is an idea and I plan on working on this idea until I have an EA that does this successfully (level of success will be determined by how much money gets pumped out into my account).
The basis of this idea came from all that was said prior and what will be said now. Information diffuses through person to person through the whole world. This process has become more and more connected but still less and less reliable due to the amount of people saying things. Hence, the invention of the internet, computerized trading, the increase in numbers of speculative money, and the number of traders. Now information is known to us TA people to diffuse through price movement of currencies in this particular case - from the tick chart all the way to the yearly, the price movement holds data that deems the price to move up and down. Since candlestick patterns hold a story, between which of the bulls or bears are winning, and multiple time frames allow us more data to see the pattern, then I think I might have another project to work on this whole summer!!!
This leads to my conclusion that the "truth exists within its entirety", or in other words, truth is a shotgun not a sniper rifle. It can be as vague as it wants to be and is only limited by the data available. Hence, everyone in the world knows nothing. We play an international game of telephone, if only to crutch up our already inflated egos. In the essence of truth, what we consider conventional wisdom, fits the role of averages in data. It is convenient to assume that you are an above average student because you get a A average in class relative to everyone else in class. This ignores the population of everyone who's taken that class (and law of large numbers). If the data was available, and you did all the calculations, you may find you are in fact a D student. Another example, a lake is on average 3 feet deep, but you may be 6 feet tall and still drown in it. See the flaws? When the truth exists within its entirety, we are playing with the law of large numbers. The huge hole in this is... when is it large enough? The data we have for trading is nothing in comparison to the future data that hasn't come to existence yet (assuming the forex markets don't collapse soon). We can only optimize with what we have and test the systems with out-of-sample data to determine its robustness. The worst we can do is assume a back-test of a month and a win/loss ratio of 3:1 is sufficient. Now going back to the telephone game...
One of my buddies whom which is older, wiser and digging his way into the realm of finance talked to me on the phone one day and told me to forget everything I was going after and try to make as many financial friends in financial institutions as possible to get information from. My own uncle told me to forget about what I was doing and told me to find a way to get information faster. I politely accepted what they both said but do not believe in either of those statements entirely. Nicholas Nassim Taleb, author of the Black Swan, spoke about how humans have a way of tunneling information and that there really is no such thing as an expert. I believe his words carry more weight only because I observe the same thing. If I have expert friends in the financial realm its not gonna help if what is affecting the financial realm today or tomorrow is outside of the financial realm... for example, the Exxon Valdez oil spill in 1989. Am I to put the effort of having friends on the tanker so that I know quickly that it happened? It is an effort in infinite exhaustion. Plus, I don't believe friendship for the purpose of extracting information is really friendship at all. It is an unethical waste of time.
Now about tunneling information, I find it endlessly entertaining to have to write essays for classes when essays are just a load of @$!#. Excuse my language but bear with the emphasis. I will be only exercising what has already been done by thousands, no, millions of other students. I'd rather do numerous dissertations throughout my college career because that adds to the pot of human knowledge. When you write an essay, you take sources and quote or paraphrase their ideas to persuade or explain whatever the essay is about. Its been said, "when you plagiarize someone else's work, at least you're copying just one person's ideas; when you write an A paper, its because your copying a lot of people's ideas." I'm a bit guilty right now since I've done my fair share of tunneling in this written piece. So I'll create some new knowledge for you(I'm assuming this idea hasn't been done/disclosed yet).
In terms of forex trading: Japanese candlestick analysis that was started in the Western world by Steve Nisson is invaluable since candlesticks hold vital information about the fight between the bulls and bears, if you're curious about that subject alone look it up. I would like to take this information and have it coded in an EA, so that candlestick formations will be recognized as signals by the program. With this ability I will also attribute the use of multiple time frame analysis. With this subject I don't mean looking at it in terms of just three time frames like 15min, 1hr, and daily. No, I mean in terms of viewing patterns from 30sec,31 sec, 32, sec...1min, 1min 1sec, 1min 2sec...5min 1sec.... etc... to monthly. This is an idea and I plan on working on this idea until I have an EA that does this successfully (level of success will be determined by how much money gets pumped out into my account).
The basis of this idea came from all that was said prior and what will be said now. Information diffuses through person to person through the whole world. This process has become more and more connected but still less and less reliable due to the amount of people saying things. Hence, the invention of the internet, computerized trading, the increase in numbers of speculative money, and the number of traders. Now information is known to us TA people to diffuse through price movement of currencies in this particular case - from the tick chart all the way to the yearly, the price movement holds data that deems the price to move up and down. Since candlestick patterns hold a story, between which of the bulls or bears are winning, and multiple time frames allow us more data to see the pattern, then I think I might have another project to work on this whole summer!!!
