Forex Trading Philosophy

Thank you C,
unfortunately that youtube link is blocked, but will search for Bohm's other videos on the topic.
I found his conversation with Krishnamurti (i have no doubt you are familiar with his philosophical views) which is pretty much about the things we have been discussing.
Your last post is too profound for me to understand at first reading, i will go through a few times more to comprehend it in full and will post my comment.
Have a wonderful weekend, my friend

Thanks for the vid Tash. Those dialogues are absolutely fantastic. They never suppress an idea and instead interrogate it deeply despite approaching the problem from two different perspectives (a philosophical perspective versus a scientific perspective). That is the best way for dialogue to be fruitful for all parties. So much of normal discussion we typically engage in is confrontational designed to suppress rather than solve. It takes a while to get into the spirit of the discussion but when you do it hits you like dynamite. What a great way to solve problems, through civilised and penetrating discussion about the things that matter. Isn't it amazing how simple discussion alone can be so inspiring.

Have a great weekend yourself Tash

the biological roots of self identity expressed through the means of struggle for survival are unquestionable. hundreds of millions years evolution has formed natural instincts of search for energy, reproduction and expansion. these are the basic factors which explain human behavior in general. you have explained all this to some extend and the only thing i would like to add is that from the evolutionary perspective, the first single cell which contained in itself the potential human being (and possibly the all other zoological species), has evolved through successful mutations which were welcomed by the existing environment and conditions of that period. it was the human specie that evolution favored most and armed it with the most incredible machine in the universe - the brain of great potentials. i think the inefficiencies of the brain is mainly due to survival instincts of the organism where brain makes attempts to make the best decision out of other available options which is more beneficial to continue the existence.
i would like to speculate that consciousness or self awareness is partially a product of very complicated processes that has occurred in human's brain and in
his body as a whole during the evolution.
self identity is an notion at basic level and it is mainly regulated by the instincts which was developed by struggle for survival. the higher
forms of self identity are expressed in animals and humans as collective entity. collective entity is a higher form of "self". this self is no
more an ego-eccentric biological organism, it is rather a social creature.
within the single cell to multi cell, complex organisms, human, family, tribe, nation, race and cosmopolitan man, reside the notion of self identity and self awareness at different levels. the higher level of self awareness, closer we get to understanding about the wholeness of the universe and that everything is interconnected. there is no "other". the "other" in our perception is just another form of "I". there lies the boundary between the lower level of self awareness and the higher level of self awareness. lower level of self awareness is essential to survival however when it becomes the obstacle to reach the higher awareness there we have a problem.
i also believe that there is another ingredient to self awareness and actually it is superior to the biological roots. this ingredient is called
the universal consciousness. it is not somewhere at some point. this consciousness is everywhere. there is absolutely nothing in the universe that
is not filled with it. you can call it the essential law, intellect, data or information. every single living organism has some level of access
to that information within itself. this access provide the being with enough information required for its survival. the universal
information/knowledge can be fully accessed/read when someone reaches the higher level of self awareness, when truly understands the meaning of
everything is one and one is everything.

Tash...thanks for that awesome post. It gives great food for thought.

I am with you every step of the way.

I must admit I do have roadblocks getting in the way when we refer to a 'universal consciousness' but have no problem dealing with consciounsess at the very rudimentary level as a 'feature' of a living organism that is distilled through evolution into higher forms of expression. I am working on this viewpoint of universal consciousness at the moment in spare time but am not sufficiently confident to post an opinion on this matter at the moment aside from the fact that there is probably some very good reason to accept it.

However.....we definately exist in a 'living system' as we are testiments ourselves to this fact of our universe but at the moment we are forced to conclude that there is a seperation that exists with 'life' and the balance of the universe. This is probably just a bias talking and we need to delve further into a system and it's processes to understand it. Evolution and survival is a key feature of any enduring pattern of nature and this principle IMO needs to be applied to any complex system such as 'the market' itself. Recent viewpoints of adapative markets and evolution of complex systems therefore fascinates me and provides a new way to interpret things from a more holistic viewpoint.

Within living systems themselves there is a further artificial seperation going on when we simply view consciousness as a product of the brain and while that may be responsible for a limited understanding of consciousness being our 'thoughts', an entire organism appears to exhibit a form of holistic consciousness by virtue of the relationship that exists between every cell in the body including the brain. We don't have to think to breathe for example that clearly highlights that our thoughts are a very small subset of the total 'consciousness equation'. Stimuli are processed in varying degrees by every cell in the body to put it in a form that can be consolidated and activated on by the brain. Processing is not simply restricted to the brain (but is significantly magnified by it to shroud everything else), which is why from a naive perspective that there is an immediate blockage or bias in viewpoint when you attempt to describe consciousness in any other way which is particularly limiting.

If we recognise the potential of the single cell which ultimately is the commencement point from which we grow into a complete organism, then the conscious potential has already been transcribed into the cell through it's code that has been shaped by environmental experiences over the millions of years of evolution and the transcribed result is now held in cellullar memory (information held in the genetic code). What previously has been thought of as junk DNA (or simply the product of random mutations) in fact now appears to represent genetic markers that hold information that relates to past environmental conditions and can be switched on and switched off when those conditions manifest (epigenetics). This arms us with survival robustness as when conditions change to a past context, then prior written code can simply be switched on allowing us to flexibly and quickly adapt to that situation. Life is an incredible survivalist. Recent research in genetics is allowing us to stretch farther than Neo Darwinianism and accept that perhaps there was always a bit of Lamarckianism in our 'directed survivalism'. It may not be up to simply random chance that we can now question our role in this universe, and we may have been fast-tracked to a point we now occupy by the system we inhabit (adapative evolution). Obviously all this information that has been integrated into an organism from it's environment that has shaped us but there may be a bit more going on than we realise thanks to system biases along the way.

I will hold it there as some serious work calls and will revisit this when I can think a bit more about it. Looking forward to more insightful posts from the guys that inhabit this thread.

PS Have a look at concepts such as system memory. Any enduring feature in a complex system seems to contain 'memory' and this translates to potential. Entropic laws of dissipation continuously attempt to deteriorate this feature but it has the propensity to last for a while. For example in a crude sense any sub system that is capable of retaining information from a prior system condition (by partial system seperation) such as a living system (using it's cell membrane to partially seperate) or an enduring market pattern such as a trend in a complex network of relationships. Having a memory creates a system bias as 'if conditions alter to a past condition which is still held in system memory' a system response can result in an immediate market transformation of past behaviour which then results in repeatable patterns occurring as an effective simplified system response - in other words this creates a repeatable bias in system form at all scales (eg. a fractal pattern). This in naive terms can be expressed as a feedback loop and is a critical part of consciousness. The brain also seems to work on this principle as a survival advantage. It continuously assesses stimuli against information held in memory to then conclude with an appropriate response from conditioning. Perhaps this is a feature that can be applied to all systems and provide a different way to look at the market as perhaps a 'sentient consciousness associated with information complexity'?

thank you for reminding about the adaptive markets and evolution of complex systems, i am all ears if you have anything to say about this matter.
the term universal consciousness (UC) has long become a new age jumbo-mambo concept and been abused by self made esoteric gurus. i hope someday science will have its own say on this issue. i can only deduce that there must be some kind of intelligence/bit of information/data in the core of everything. the very process of coding the information within the DNA and the source of that encoded information must be the UC. the source of any forces that may exist in micro and macro-world must be that UC. No matter how deep we research the micro or macro-world we always see the traces of intelligence and that there are specific set of laws in every fractal level that rule the relevant environment. i am always amazed at how the human organism work. every single cell functions so perfect without any external control and all parts interact with each other in order to sustain the whole organism. these cells are performing billions and trillions of complex processes in every second, yet we are not aware of anything.
these all can not be just an outcome of the properties of the matter (atoms, molecules etc). there must be something bigger that imposes the laws and generates those properties of the matter. whatever that intelligence is or what form it may have, we should not be looking for it outside.
now little bit about my own mambo-jumbo:
human consciousness is an integral part of the UC. human consciousness consists of everything he might have experienced - feelings, thoughts, memories, deeds etc. everything brain has processed is loaded to consciousness. some MIT scientists claim that they have found the location (neurons) in the brain where memory is saved. i highly doubt it. they might have founded the location which is responsible to process (and recall) the memory but i do not believe that memory is something material to store at a location. if this was true, then the memory can be destroyed. this is not the case. nothing in the universe is destroyed or lost. everything we have experienced, seen, heard, felt will exist for eternity as a part of our consciousness. after the brain's date is expired, the real "I", the consciousness will unplug from the brain and switch to the universal consciousness.
i am not sure to what extend systems may have memory but sounds like this is something needs to be researched. as far as i know there were some researches whether the US stock markets have "memory" and the conclusion was negative in the long run. but i would not be surprised if markets have short term memory.

In terms of trying to solve what it means for a system to have a memory it helps if I think of it like this. For progressively ordered sub-systems to appear in a Complex system such as our universe, we need time and a stable system environment for this order to emerge (emergent complexity). For instance when talking in terms of a systems evolution we are referring to the emergent conditions and inter-woven relationships that are the essential pre-requisites that need to be established before we can use them as a springboard to embark on the next phase of emergent complexity. This refers to the statement 'order creates order'. Just think in terms of the progressive evolution of a system that is required for an organism like ourselves to emerge.

An ordered sub-systems memory therefore relates to the causal sequence of relationships that must be progressively developed before we can launch forwards into an uncertain greater system, but armed with pre-requisite conditions about the prior system state that allow for progressive succesful adptation. Obviously if a system evolves too quickly (such as a market shock) the robustness of an ordered sub-systems survival achieved prior to that point is simply not sufficient to handle the significantly altered state. The result is that system structure or memory is partially erased through these events disabling the progressive complexity of ordered sub-systems. Why talk in terms of memory? Well it is not the system content that is the important feature that offers survival advantage but it is the network of relationships and co-dependencies that have arisen over time that 'provide a foundation' for future complex ordered form. The contents provide a skeleton but the system relationships both external to and internal to a complex ordered subsystem that makes a highly calibrated organism within it. I hope that makes sense! For example if a system is disrupted temporarily but is then restored back to a prior conditions, the pre-fabricated relationships allow the sub-system to restore far quicker that would otherwise be possible. The network of relationships that sequentially magnify order are 'Power laws' and are a feature of complex systems.

Now the fundamental constituents of a system can be defined by 'information' which describes the complete state of a system sufficient for an exact replication to be created. The state is defined by an exact description of the contents and it's configurations and relationships. Obviously more complex sub-systems need additional information to describe their state than simpler systems. Now the physical law of entropy always seeks to restore a system to perfect equilibrium, the most simple state available', but chaotic systems (while obeying this principle globally) buck this trend in isolated subsystems where these subsystems harvest negentropy from the environment (steal energy from the surrounds) and use this energy to locally work against this principle creating ordered sub-systems. This is what life does and is also prevalent in many complex systems do (eg. the weather). Of course these sub-systems are never permanent features of the total system and over time these structures dissipate, but these mischeivious ordered subsystems can progressively complexify and take on a life of their own through evolving co-dependent system relationships (memory) as described previously. When talking in market terms, you can see these semi-permanent forms of emergent complexity (non-random features) evolve in stable market conditions. :-)


Agreed mate. There is no better example of a machine in action than at the cellular level. It blows my mind delving into this. We are so unaware of our own complexity and are simply scratching at the surface with our knowledge.



Totally agree Tash. Information is conserved and never destroyed and perhaps one of the most fundamental laws of our universe. However our access to this information takes two different forms. There is classical information (the result of environmental decoherence) which can be copied and is available to everyone that is located in a vicinity where it can be received (but it is limited in extent to that contained in our hubble volume) and there is quantum information that must arise from how an observer interacts with the system. This is unique to an observer according to the quantum no-cloning rule. How participants interact with the system alters the information state of a system (the which is made available to others) and this is critical and probably the fundamental reason for why each observer has a slight different interpretation of the underlying reality. Simply viewing things from outside in does not address this information discrepancy. We as participants interact with our system and the interactions really matter and shape the reality that is presented to each and everyone of us. There is a two way information exchange going on in participation. A crossover between information elicited by the participant in the interaction (their enquiry) and a symmetrical exchange of information received from the system that responds to that enquiry. These exchanges shape our perspectives of our system and give rise to it's classical nature when in fact the underlying reality is all quantum.

In relation to how we store information in our brains, there is a lot of contemporary research pointing to the fact that information stored in memory by our brains is done so in a de-centralised manner and in digital form. Neurons act as ion gates with a voltage and create a binary 'open/shut' or 'yes/no' condition. The associated voltage from different neurons create 'brain waves'. Some research is suggestive that brain waves (EMR) carry information from decentralised locations in the brain and cohesively 'knit' this digital 'yes/no' information together to represent a memory. Brainwaves (EMR) may also co-ordinate and magnify neuronal firing associated with conscious awareness. There are tantalising suggestions (PS Tash....have a listen to this great thinker) via Karl Pribram et al that what is captured as stimuli received from our senses from our environment by our receptors is coverted into memory in digital form and then with an associated 'prodding of memory' by receiving similar stimuli in the future, the brain fourier transforms this information back into a restored experience (memory). The ability to re-use neurons in their digital binary code role allows for huge storage capacities in the brain as it is the digital output (the code) which holds the information. The brain therefore continuously compares received stimuli against patterns of code held in the brain (pattern recognition) via memory to determine how an organism will respond. Very much like how a hologram works to restore a 3D image from digital information contained in a photographic plate. To record a 3D image on a holographic plate you beam split a laser and allow one beam to shine on the 3D object and subsequently merge with the other beam to record an interference pattern on a holographic plate in 2D. If you later shine a laser at a particular incidence on that holographic plate, then the original 3D representation that was originally photographed is restored in it's 3D glory by fourier transformation of the interference pattern. The 2D record of information is extremely efficient for if you break the plate up into little bits, you can still restore the original 3D image by shining a laser at a particular incidence on a mere fragment........in fact information encoded on a 2D boundary is always far more condensed that it's 3D representation......and to understand this you need to understand 'black holes' and their event horizons (but this is digressing a bit too far).


PS Now when I try to convert these nested system ideas into an approach to analyse this market rather than coming to a conclusion, the result get's entirely confounding and complex. I see the market as one great globally interconnected system with sub system upon sub system, some with order, some totally disturbed all evolving forward in different ways and a never ending cycle to and from various equilibrium. Trying to read the complex inter-relationships is a mire of complexity.....so how does this help me.....in simplest terms while I think I appreciate the complexity of the market, it simply makes me realise that it is impossible to penetrate for predictive purposes. All it does it make me an intense survivalist.....but this is perhaps life's greatest lesson. Simply manage risks of an inherently unpredictable system and hopefully you will survive long enough to participate in it's bounty....but on the market terms, not your own. I wish I could read more into it for practical purposes but it simply confounds me.

I am learning a lot from your posts C, and greatly appreciative of the contributions you have been making in this thread. concepts and ideas you have expressed urges me to do some research. I will ponder upon a few issues that stuck in my mind to to find some answers.
Thanks again

an illustration of the complex systems

Thanks for the illustration Tash....*gulp*. Looks like we have only had a narrow discussion so far. Complex systems are just so mind-numbingly complex and have a life of their own it takes the breath away. Thanks for letting me bounce ideas of you :-)

you may find this relevant to things we have been discussing here

Nerd !!!!
You better Start to do this to keep you on track towards a healthy life.

Interesting discussion here. Do mind quoting the reference for this work tashkent. Bit hard to read. Thanks.

I was not sure if anybody would bother to read it but here is the link if you are interested

adaptive markets, evolutionary biology, economic behaviour, human behaviour in financial markets, laws of probability-matching

part 1 part 2

Now that sounds like a good start. Simplicity.....I like it :-)

there were talks about this topic before but I did not know it is called complex adaptive system theory. my personal assumption is that it is one of the most rational theories which explain the market behaviour.

illustration of interconnections and relationships among world's major financial institutions

Tash. Thanks for both those video's. They work in tandem with each other so well to drum the messages home........Great simple illustrations of complex adaptive systems which provide a very rational basis to apply in terms of a globalised marketplace (an interconnected nest of semi-closed markets) all dealing with the way system resources (eg. arbitrage opportunities) are expolited by participants via simple processes and examine how that battle of survival for arbitrage plays out as the resource is ultimately fully distributed through the system towards equilibrium (a moving target). Simplistic 'reductionist' interpretations that we are used to describing in this forum suddenly don't seem that relevant anymore when you dig deeper to understand what truly is going on.

We are so reductionist in nature focussing like engineers on the parts but forget about the relationships that exist between parts which are the drivers of system complexity. Complex systems are not constructed like a car engine where to fix it you can simply replace a spark plug. Complex systems grow and adapt like an organism as new dependecies and relationships are created during that growth process. At each level of system growth, complexities magnify not in a linear way but an exponential way such that complexity accelerates as time progresses provided the system is stable enough to support the growing foundations along the way. The system self-organises and grows itself and does not need an external creator (Engineer) to do so.

In summary........ Complex systems consist of many agents following simple rules (processes) all interacting with each other in a leaderless and dynamic environment which is 'self-organizing' and difficult to predict. It is the way the actions of individuals interact with each other to form characteristics or behaviours of a group.

Note that they are difficult as opposed to being impossible to predict. Theoretically at least if we had a sufficient handle on this complexity we probably could sufficiently predict the unfolding of market behaviour if we at least had access to the entire state of information being the initial state and all associated system laws that describes how that state unfolds. While this may never be possible with the universe as the information made available to us is received from that within our light cone, this is probably possible with a human created market where perfect information at least is theoretically possible in principle.

We don't need to go all quantum here in trying to understand complex systems. Very simple classical systems adopt this 'almost' unfathomable complexity and you don't need to dig that deep in foundation to see how these complex systems emerge. What you do need to do however is understand that this complexity is attributed to how the system contents (the stuff or the things) all relate to each other (the Laws of Supply and Demand) creating semi-permanent complex evolving and adaptive structures as the entire system plays out (entropic direction) between a state of dis-equilibrium (grouping order of high entropy or potential eneregy) to a state of equilibrium (symmetry order of low entropy and potential energy).

Excellent videos Tashkent, many thanks for sharing.

I particularly liked these sections in the first video:





Even though it is a complex system there is a bit of predictability in the relationship between the fish and the plankton. Like the abundance of plankton helps the fish population to grow but there is a point where this then causes the plankton to be consumed faster than it can grow. This causes it's decline. Very similar to market behaviour and the balance between buyers and sellers.

We can see this kind of cyclic relationship between buyers and sellers when we use reference points to compare the movements of the two groups. For example say we use and hourly candle open as a reference point and anything above the open is a sign of buying and anything below selling. We can see this in historical data when we compare Open to High against Open to Low.



More often than not one side is higher than the other. Yes there are periods where both sides are in the low ranges but this is when there is not much activity in the market (our cue to stay out). There is a certain predictability in that when price deviates enough from open (or any reference point) you often have a good chance or the more likely potential to continue (trend). The rest is down to the individual trader's skill/discipline in being able to enter at a good point (pullback) and managing the trade to cut losses and let the winners run (as much as possible) because we cannot predict with any certainty in such a complex and very often chaotic system.

In the second video there is no mention of an individual starling or fish trying to predict the global direction. They just use simple rules that enable it to follow the crowd.

I also like this video talking about how they are developing swarm robotics to take part in complex systems without a global brain to control the robots to a common purpose.



Regards

Neio

Neio...thanks for the info and also that swarm robot vid. That is so interesting and it is explained in such an intuitive and powerful way. It always amazes me how far we as humans can leap in technology when we peer into natural systems deeply. For example look how we can apply tensegrity today with architectural systems (eg bridge building) to create incredibly robust yet flexible structures from mimicking nature. This is an example of a particularly enduring structural form found in complex systems in nature such as skeletal forms where the importance is placed on the relationship between elements as opposed to the elements (things) themselves:-)