Biology vs Technology

In one of my theory presentations the other day; I got to use "Species 8472 vs Borg" in the speech.

I was talking about robot production vs biological production; and how I've concluded that the bio model is vastly superior (caveat: after surviving initial onslaught) So I'm apply bio models to my trading.

I am also applying warcraft attack models as well. Amazing how much trading I learn from Star Trek and video games...

Huh?

Cool story. I just drank a Cherry 7up.

Twoblink,

I always look forward to your posts ; )

Please can you go in to a little more detail?

Recently I've been looking into a concept that is a little similar to this I think, its called "Metagaming".

Darkstar has made a few references to it in this thread:

http://www.forexfactory.com/showthread.php?t=267407

Look forward to hearing more.

James.

So the theory is, "in the future" there will be 2 groups, the "techs" vs the "bio's".

You've got Terminator like machines that start a war blah blah blah and rebel against humans. The other part is probably injecting animals with different strains of crap and ending up with zerg-like creatures.

In either case, the number growth model is what I'm interested in.

So let's start with the techs:

They have the advantage of that, think of it like an assembly line, working 24/7. They keep cranking out killer robots, and so it's a linear growth. 10 robots per hour, etc.. something like that. The only way to increase production though; is to create another facility.

The major advantage of this model is that, you get a constant stream of ready-for-battle robots. The downside though is that it's linear growth and not exponential, and if you want to tweak one little item, you actually can't. You'd need to retool or muck with the assembly line which would cause downtime.

The "Bio" model however, is quite different.

A queen of some sort spawns a bunch of little creatures. Or hatches eggs. Think starcraft; why the zergling rush works; because while terrans produce just one marine, you are able to hatch 6 zerglings. So the biggest advantage of bio method is that, you can get exponential growth instead of linear.

BUT, the problem with the bio model is that, when they are still in egg form, they are very vulnerable; and also, they might take time to develop; and they are still vulnerable during that period.

So when you compare the two models, I think the bio model wins, assuming you can survive the initial vulnerability. Once you've gone "one generation" then you are doing pretty well; once you've gone two generations, then you are doing really well, and by the 3rd generation, you are unstoppable.

So this being FF, what does this have to do with Forex?

Plenty.

Let's say, I wanted to trade the tech model...

So we pick a factory, in this case, I will pick EURUSD. I use indicators, or price action, or whatever triggers my entry criteria, and I enter. Now, you can only sit to either add more positions or exit. You can't be saying "I want to go long, for the long term, but short for the short term" it doesn't work if you have open positions because you will either close yourself out or hedge yourself to a stalemate. So you can only produce from one direction (you can add but never go against yourself) from one pair. This is a good idea if you are day trading, as day trading one pair only is to your advantage. After a while, you will be line an assembly line, putting together multiple signals into an entry criteria, and you will just be cranking at the specific pair.


The Bio model however, is quite different. You will try to "spawn" a bunch of potential trades all at once; so let's say you have 10 pairs that you are looking at, or any pair that has a spread equal to or less than 3 pips. You put in a bunch of stop entries, hoping one of them hits. You already know that most of them won't, but in the off chance that they do. One however, you build up enough capital, you will start to spawn even bigger batches, such as all pairs with spreads less than or equal to 4 pips... which might be something like 18 pairs, depending on your broker.

In picking on focusing on just one pair; or spreading it around on multiple pairs; I have no doubt this is a question asked often.

If you play starcraft, then you've answered this question for yourself, do you play Terran, Protoss, or Zerg? Their army amassment method that you are most comfortable with, will also probably give you insight into which method you prefer.

Twoblink,

I know that you never went into detail about it but isn't this along the same lines as you "cocaine distribution model"? When I think about the Bio method of entering different orders in different markets is this not also similar to buying a large quantity of cocaine then passing it out to dealers who work in other towns for resale?

With the Bio model when I think about all these orders having a low chance of survival in the initial stages as a lot will be killed, however when we do have a winner it would therefore be highly important for the winning trade to regenerate itself over and over again so that an exponential growth is achieved.

Its a very interesting idea and would require testing the main downfall I could see would be that if we were to run this through a traditional bucket shop then I think that our exponential growth would be slowed due to the costs involved with having a high trade frequency. These could be limited by maybe using limit orders for entry and also having a strict slippage policy.

What would be achieved in the longterm would surely result in having a small but persistent edge with a slight similarity to how the casinos operate.

I take it that our initial survivor could then be added to so as to simulate a growth followed by a resporn?

We could also use intelligence by looking at what produces a high death rate in the initial stages and make changes to this so as to produce an almost evolutionary process.

Think I'll try and draw some pictures of this later so I can visualize it better but I think the model would look almost lke a reverse pyramid.

I love this out of box thinking.

James.

The Christians of old call it the "lighting a candle effect" and this is very very important concept.

Basically, when I use a candle to light your candle, the fact that your candle is lit, does not diminish the light given off by my candle.

What does this have to do with anything? Plenty.

In a bio model, food availability not withstanding, a production of a 2nd spawn does not reduce the ability of the 1st spawn to reproduce, AND production is effectively now doubled. Contrast this with the robot model. When model #321 rolls off the floor, he has no influence over how fast model #322 rolls off the assembly line, nor does he contribute to the assembly line or increase the assembly line's capacity or speed or quality. The robot model generates independent robots that contribute nothing back. The bio model effectively increases everything.

The other critical part is that for the bio model is that it can mimic the SIMD model in computers. SIMD = Single Instruction Multiple Data. Like video cards. Any singular improvement or instruction or added or subtracted ruleset can be applied simultaneously to all zerg. For all you programmers out there who do OO, this also means it has OO implications of inheritance and encapsulation.

This is really innovative, out of the box thinking. I don't have the intellectual ability to make a meaningful contribution to the thread but, will be an avid reader.

Bio Model


Like the Equity Millipede .. from this thread ...

http://www.forexfactory.com/showthread.php?t=245149

btw.. viruses are biological too .. and far more superiour than .. zergs.. lol

Not really.. bacteria I might believe but not viruses; viruses require a host to reproduce, bacteria does not.

I try to take from every facet of my life and apply it to trading. Poker, Blackjack, video games, calculus, photography, you name it and I use it to my advantage in my trading. For example, with photography, if you don't have enough light, some camera sensors will let you do "pixel binning" where you combine say, 4 pixels and mimic one large pixel so you get more light. If there is not enough movement, you can "pixel bin" say 4 different pairs and get the same amount of ATR within a day.

Everything is applicable when you open your eyes to it. There are a lot of problems with trading and a lot of potential optimizations, and these are common problems in all the environment around you. Why reinvent the wheel when you can just take it from another discipline that has already solved the problem?

One of the things I'm trying to work into my trading and I think I've successfully done so, is summed up in this image:

http://www.sttff.net/images/TFF074c.jpg

Here 9 Species 8472 ships synergize their weapons. My "front loading" model of semi-pyramiding mimics this also. Very cool. Also, since Species 8472's ships are of the same genetic material, this means to me, that when your account size gets bigger, synergizing multiple-markets become a natural conclusion. Bet you never thought species 8472 can teach so much about trading FX!

It seems you apply it more toward trade management than chart (or news) study.
Yeah, I do similar, if not as much and only to keep loose, for mental imagery to inspire how to read the chart: Geology (mountains, caves, rivers); airflow, plants, and gears; and, human body - speech interactions.
Mathematica.com demonstrations, physics games, Science Daily articles, and a basic anatomy textbook can work studying.

yea viruses are non lifeforms .. except of


http://www.economist.com/node/17358573


interresting isnt it ? ..


and in terms of Forex etc.. we have to be predators .. not producing food for everyone else .. ie loosing ..


its either eat or be eaten... trading is not about shareing but taking ..

i kinda like the idea of quantum physics and fractal geometry and even global scaling.. but studying these three concepts . in order to find something wich can be addaptet to tarde the markets will take ages.. and if u found something .. u found probably the key of life .. asell .. is it worth it ?? of course it is.. but i aint make money doing .. it

so i rather stay .. to KISS .. keep it simple stupid.. and achive .. my goal


cheerz

for everyone else google and study

Global Scaling
Quantum physics
fractal geometry

I agree with your thinking.. I do the same thing, using analogies to understand the markets allows me to continuously exploit new ideas and/or answers.. I also find many guru's have the same type of thought process when guiding others to enlightenment.

By the way.. what you said in one of your threads was very insightful.. about trading more money on your winning trades and less on your losing trades.. its like MIT and blackjack.. bet small until the odds are in your favor and then adjust for larger position sizes.. and this comes back to your analogy..

you can look to things like MIT and blackjack example and apply such things to the market for more insight.. could do the same with snipers and ect..

sniper need the bullet to move in there favor just like the market.. but you can't just be concern with the wind you feel.. what about the cross winds along the path to your target etc.

and the examples keep coming.. very insightful stuff my friend

I am currently mucking with the concept that for one pair; like EURUSD, I'd go with the tech-reproduction method, and all other pairs with Bid/Ask under 4 pips, I'd go biological. That way, I'd have one producing a small stream of income while the rest is generationally producing income.