How to start my education in Quantitative Analysis?

trader111 · #21 18th April 2008, 07:49 PM

Quote:

Originally Posted by beginner_av

let me tell u why. Quant is not a qualification, just a frame of mind. To not accept crap without scientific validity.

one does not need knowledge of C++ or Black-Scholes equation for that.
BTW have u read Naseem Taleb?

Quote:

Paste a chart and you will see 10 people naming 10 different formations. Cos the mind is used to seeing patterns when there is none. Some will see a wedge, some will extend it by 6 bars and see a triangle etc etc. But that doesn't happen if you can quantify your premise and verify it.

Hmm... whats scientific and whats not scientific can be a philosophical debate.

Anyways, cant understand that. Do you question the validity of technical analysis?

Quote:

Some one, and we have lot of bullshi**ers around here, will come and tell you buy this as there is a 3 star afternoon white cloud, this is a 53mins 20 sec breakout etc etc. Now how do you verify it?

Who the **** listens to such people? it cannot be someone who seeks a career in the markets. Others who seek spoon feeding are gonna be a looser in any case.

beginner_av · #22 18th April 2008, 07:59 PM

Quote:

Originally Posted by trader111

one does not need knowledge of C++ or Black-Scholes equation for that.
BTW have u read Naseem Taleb?

Hmm... whats scientific and whats not scientific can be a philosophical debate.

Anyways, cant understand that. Do you question the validity of technical analysis?

Who the **** listens to such people? it cannot be someone who seeks a career in the markets. Others who seek spoon feeding are gonna be a looser in any case.

Whats scientific is empirical, not philosophical. Not just Taleb, I dont believe in the normal curve, and also believe in infinite variance. Of course the validity of TA has to be questioned all the time cos lots of BS is doled out in the name of TA including the so called indicators.

As a corollary to your last point, if you don't believe what others are saying, why should you believe in what you are saying without verification?

C++ is just a language. If you don't have knowledge of C++ or rather the internals of the market microstructure represented in a computer program, you have to believe what the programmer vendor has canned for you, without much care about the accuracy of the same.
Because I know Black Scholes or rather Cox Rub eqns, I know the deficits and have been exploiting that to trade options for a living for the last 5+ years. You may not need to know BS or CR models, but you have to know something else where you operate.

Thats all for now,
Later

trader111 · #23 18th April 2008, 08:12 PM

For the empirical part, I believed in the guy who taught me just by his equity curve

I believe in my strategies (believing in myself is a different thing !

simply by the returns they give me.

Why do I have to bother about the internals of the market microstructure represented in a computer program? I can learn (and adapt) from a quote machine.

BTW I personally know many traders (can name here as well), who can hire a team of statisticians and programmers to automate their trading, but don't bother. After trading a few million shares, one does not needs to put it in a computer to tell oneself what works and what does not.

But where is the discussion going? I already said that knowledge of complex strategies may be helpful (as it is for you) but it is not essential.

raosrinivas · #24 18th April 2008, 08:13 PM

Quote:

Originally Posted by beginner_av

You may not need to know BS or CR models, but you have to know something else where you operate.

Thats all for now,
Later

let us know more about your BS model

beginner_av · #25 18th April 2008, 08:58 PM

Quote:

Originally Posted by raosrinivas

let us know more about your BS model

Black Scholes never wrote any model for me! Unfortunately they cant write any for you either, not anymore!

beginner_av · #26 18th April 2008, 09:02 PM

Quote:

Originally Posted by trader111

But where is the discussion going? I already said that knowledge of complex strategies may be helpful (as it is for you) but it is not essential.

Thats what I also said that being a quant is a mental frame, not a big mumbo jumbo qualification always ready to apply stochastic calculus.

uasish · #27 19th April 2008, 04:01 AM

From a distance a human being can be eliminated with even an old Musket .A 9mm baerrta is not essntial.Now if my adversay starts using 9mm against me than i must switch to Night Vision equipped one to have an edge.

Few years ago FIFO (Fast in Fast Out) concept was not used in indian manufacturers Stores Deptt.What was the consequence then ,huge inventory was piled & rejection rate was also high,all these inventory was MONEY,this working capital or in other words money rotation cycle in the bussiness was Max to Max 4 to 6 times in an year & for more diligent ones 9 to 10.We will be shocked to know now it is in HRS ,think about the Money rotation ; H U G E ;think about the QUANTUM jump in Operating Margin & the release of the Capital which was blocked.

Forecasting is an age old practise in all commercial activities,starting from Hero Honda ,Bharti ,Infy everybody does it every W E E K ,even Montek Shing Aluwalia or RBI Governor does it.Let us ask any of our relative/friend/Aunty's Aunt associated in these enterprise to find what MODULE is used there.

It is true traders are earning without bothering about the new concepts,the more matured & developed capital mkt. evolves to we will have more of this Scintific Modules trading,hence we have to know these things NOW to survive in Future.

beginner_av · #28 19th April 2008, 10:05 AM

Dada very well said. You just put my analogy that I use when I teach people on technology. That even bows and arrows would kill in a battle, but would you go and face sniper fire with bows?
unfortunately most serious discussions on the board is scuttled down by not-much-sense posts. Then comes posts where you have to justify every action as to why trading systems would work. If you think they dont work, fine, may be you can never make them work even if you try, too bad! but why bother people who want to take it forward? I DONT mind at all but most people who ask such questions wouldn't recognize a trading system even if it was dropped on their lap.
Many posts like Trader111 are good for discussion, but then you CANNOT prove a negative proposition, like he says complex things are NOT essential. Now this NOT cannot be proved. Even if you prove Not(NOT) that doesn't verify the original premise, cos they are not mutually exclusive.

Then again when people quote, they dont have any statistical significance. Like astrologers, you tend to harp on one event that took place, and ignore the million misses. So if you have few traders making money, for each one, several hundreds would have blown it.

Bye