At one with mathematics
Until recently, I was of the opinion there were two types of traders, technical or fundamental. However I have discovered there is a third, the mathematical trader. I define a mathematical trader as someone who has no care for fundamental changes, price patterns, technical indicators, or even trends.
A mathematical trader is driven by algorithms, and yet simplicity of approach. I consider grid style trading as a mathematical approach as it has no concern for trend direction, patterns or fundamentals. Some may argue with me about this distinction however I have been trying to apply technical trading for the last 10 years and am yet to discover the comfort levels I have with any other methodology or approach. It feels distinctly different to me.
'Feel' might be a fuzzy word on such an intellectual undertaking but any trading psychology book implores its readers to choose a style that suits them and their personality. I guess I have found it.
Another degree of separation between technical and mathematical is that your methodology doesn't waver during changes in market styles - trading or range bound, quiet or volatile. I am not saying you can always expect a linear equity curve (nothing is without risk), however I am saying that you can expect consistency. To that end, I am confident that this approach will trade it's way out of any draw down with the right risk management.
Note that mathematics plays an equally significant role in money management and position sizing as it does the execution of the trade.
I have reach unparalleled levels of zen with my trading since commencing project rigor. Combined with my new skills learnt in how to analyse business decisions and risk, I feel like it's not long now... bring on the 3 year plan!
Update on project rigor
I am pleased to report the progress of project rigor is going well.
As far as the 'To Do' list goes, I am up to step 5 – Testing the strategy. I have temporarily skipped over Step 4 (purchase of the software/strategy) as the strategy I have decided to test has a free demo.
So far I am pleased to report that the testing is going well and showing a great deal of promise.
The equity graph is stable and moving north. The strategy does well in volatile markets, and because it trades the EUR/USD it's thriving at the moment. That leaves two obvious stress points to test:
-
How does it behave in extended sideways markets?
-
How does it behave when I increase the risk levels?
Starting equity was $25,000 USD and has grown by 10% since starting the trail on 01/09/08.
Currently I am only using moderate risk settings, and the more aggressive alternatives need to be tested, even if it's just in an attempt to 'break' the system.
The world has gone mad!
The following is taken from the Herald Sun newspaper yesterday (5 th August, 2008)
Cotton wool can harm your kids
OVER-protective parents are setting up their children to be unhappy introverts or risk-taking rebels in adolescence, experts say. Banning activities such as tree-climbing for fear of danger is harming children's development and risk perception, they suggest.
The warning came as British research found half of children aged seven to 12 were not allowed to climb trees, almost a fifth were banned from playing chasey and almost half were not allowed to go to the park by themselves.
Riding a bike to a friend's house or playing unsupervised in the street was off-limits for a third of kids. The same vigilance was not applied to internet use, with almost three-quarters of children saying they surfed the net unrestricted.
Deakin University psychologist Helen McGrath said many parents had an unrealistic sense of danger, based on media reports about child abductions, assaults and accidents. "Parents vicariously feel all this," she said.
"They think, 'if it has happened once or twice in the past few years, then it has got a high likelihood of happening to my child'. "So they start to over-protect their children by not letting them out of their sight and the message they send is, the world is quite a dangerous place."
She said as well as protecting them from perceived dangers, parents were more inclined to fight their children's battles, such as intervening in minor problems at school. She said this cotton wool-style parenting meant children missed life lessons about how to cope, problem-solve and weigh up danger.
This made them more likely to live in restrictive comfort zones and increased their risk of depression, while others could be encouraged to engage in risky behaviour later in life. "If they don't have the skills to deal with it, then sometimes their solution will be to turn to drugs or alcohol," Dr McGrath said.
The British study of 1030 children and 1030 parents found just 29 per cent of kids' favourite play experiences were outdoors. This compared with 70 per cent of parents, whose greatest childhood adventures were had among rivers, trees and parks.
Insul Mat Ether Thermo 6 Sleeping Mat Owner Review
Along with my BA3W Bivy, I recently purchased a Insul Mat Ether Thermo 6 Sleeping Mat. I chose this one because it is thicker than a thermarest style self inflating mattress and lighter.
I have been impressed with it's thermal efficiency during some recent cold nights (one night was a low of 1.1 deg. C) and I was comfortable. I could feel it radiating heat back up rather than just transfer the cold air from the ground.
I haven't quite had a 'great' nights sleep on it from a comfort point of view. I can sleep on my side and not touch the ground which is a great feature as it's 9cm thick, but still for some reason I couldn't settle. Maybe with more time I will adjust. It might try deflating it slightly next time to create a softer feel. To be fair, I don't think I was more comfortable on my old thermarest style mattress either so I can't say if this is a reflectiion of the mattress or something that I have to accept!
For Australian conditions, I can't see thia '3 season' mat reaching its temprature limits with a sensible sleeping bag and appropriate clothing. Please note that both times I used this mattress was in a bivy which apparently adds a few degrees of comfort to your sleeping system.
This matress has to be inflated manually but only takes 30 seconds.
I have also purchased a thermarest brand pillow. I will keep you posted on how the mattress performs during my next few outings.