There are fundamentalists, technicians, and quants. Are there psychic traders?

QuoteOriginally posted by: KackToodlesThere are fundamentalists, technicians, and quants. Are there psychic traders? they're technicals

are there any good classes? why is there not a book on "Psychic Investing for Dummies"?

It doesn't work if you try to go head on and get direct answers. You need to take an orthogonal approach...May take years of apprenticeship and observation. Not technicals though, certainly not always.

Yesterday I was at a convention about new way of teaching finance (in Paris) and there will be a creation of a master degree in "Historical finance and behavioural finance". The argument of the woman "Math models are false, the market is only lead by psychologic effect, mostly irrational ones".So to resume "you traders are sheeps who act irrationally and moreover who can't do proper math". At this time, I laughed interiorly ....

Verily I say unto you that it would be easier for a camel to pass through the eye of a needle, than for a quant to become a psychic investor.

Psychology applied to finance for me is an interesting study but apply that to day to day trading sounds for me as a vast joke.

QuoteOriginally posted by: trackstarVerily I say unto you that it would be easier for a camel to pass through the eye of a needle, than for a quant to become a psychic investor.But, on the other side of the argument, can you really say that assuming that stock prices follows a GBM is any different than assuming it follows the phases of the moon ?

Actually, why would it be more silly than any SDE model?I imagine the following:is the forecast at time t of stock price at time T.Here, EEG is the measured electroencephalogram of the psychic trader (PhD from top university required, showing exceptional promise in ESP and VBA), and sigma is a parameter to be determined. In a sense, it may be used to incorporate information from other psychic traders into the model.

QuoteOriginally posted by: crootActually, why would it be more silly than any SDE model?I imagine the following:is the forecast at time t of stock price at time T.Here, EEG is the measured electroencephalogram of the psychic trader (PhD from top university required, showing exceptional promise in ESP and VBA), and sigma is a parameter to be determined. In a sense, it may be used to incorporate information from other psychic traders into the model.Exactly my point.Loved the math though...

A model has obviously some limitations. it's the same in EVERY natural science in fact (and especially in physics). When you say that the light is a photon or an electromagnetic field. Have you already seen a photon ? or a magnetic field ? You only see the consequences of your theory.The GBM model fits quite well the market ( and should say quite well with a lot of precautions) but there is no reason that the market IS a GBM. And you want to incorporate psychic trading in a model ? why not ? There were a lot of studies about the famous utility functions. You complain about the math models but when you want to incorporate the behavioral aspect in quantitative way you are making ... MATHS Psychology compared to maths is not quantitative.

QuoteOriginally posted by: crootActually, why would it be more silly than any SDE model?I imagine the following:is the forecast at time t of stock price at time T.Here, EEG is the measured electroencephalogram of the psychic trader (PhD from top university required, showing exceptional promise in ESP and VBA), and sigma is a parameter to be determined. In a sense, it may be used to incorporate information from other psychic traders into the model.That is a nice example.I will set up a little experiment using a classic instrument from psychic (or occult) arts. This will take a few moments...

QuoteOriginally posted by: frenchXPsychology applied to finance for me is an interesting study but apply that to day to day trading sounds for me as a vast joke.it sounds to me like OO programming

Tarot Reading for the Wilmott Forum - Short FormTuesday, June 15, 2010Deck: Morgan-Greer1) 6 of Pentacles (reversed)2) Ace of Pentacles3) Ten of CupsNote: Pentacles signify Monetary Matters and Cups signify Emotional MattersThe Formal Interpretation:1) 6 of Pentacles: Generousity is repaid through material prosperity. (Also reversed: Jealousy and envy reap no benefits.)2) Ace of Pentacles: The path of material gain and the attainment of wealth and prosperity3) Ten of Cups: Bliss, contentment and emotional richness is attained.***Message as interpreted by trackstar:The Guidance:Quants continue in their deep philosophical struggle against the bailout actions in the US and Europe, but within the Central Banks and National Governments, time marches on and money flows in and out.*Generousity is repaid through material prosperity*. Today's recipient of a rescue package is tomorrow's winner!"Jealousy and envy reap no benefits." While you are wailing and gnashing your teeth, some people are quietly taking stakes.The Context:"The path of material gain and the attainment of wealth and prosperity." If you are in the finance industry, you must remember the immediate goal - this business is about the creation and capture of wealth. If you cannot take up an appropriate weapon and hunt for prosperity with your team, then maybe you should go work at Habitat for Humanity or the Humane Society. If you like your compensation package too much to leave, you could always volunteer for a non-profit on the weekends now!The Outcome:"Bliss, contentment, and emotional richness is attained." In the bigger picture, it is not all about the money of course. Money is the enabler - to support arts, sports, education, nature conservation, whatever your personal interests are. Develop your philanthropic portfolios alongside your derivatives baskets. And Buy Greek Debt.