top of page
Search

(A higher level understanding of) Basic theories

Writer's picture: Shanyron BellShanyron Bell

A basic theory is the symbolisation of masses (objects), their qualities and their behaviour. They're not the masses themselves.


A theory doesn't need to be "complete" for it to be effective (properly estimate the behaviour of the masses in question)


An incomplete theory could theoretically be more effective than a complete theory.


A basic theory has 2 purposes

-To produce a better understanding of the things being handled in order to get better results

-To best predict the behaviour of the things pertinent to the theory


For a theory to be effective the thing itself must be accurately defined or identified and successfully differentiated from other things which behave differently


The symbolisation, representation and abstraction of masses from a 3D/4D reality to a 2D surface


One of the best ways to see if you can actually understand something is to draw it.


Chemistry is a great example of this. They have created a system for drawing atoms which demonstrates the basic theory of why certain atoms react in certain ways and organising these atoms by their Reactivity and density.


However if you look at the way atoms are represented on paper with their electrons and neutrons it is vastly different to how atoms actually look in the real world or physical universe.


This dichotomy is not important, what is important is, does the theory work ? Does it achieve the purposes its suppose to achieve ?


This further demonstrates that a theory doesn't need to be 100% accurate to be effective.


However the ideal scene is that the theory works and you understand why it works.


In terms of trading this is applied by an individual being able to take apart a stratergy and seperate it into its component parts and take apart the markets and seperate it into its component parts.


Understanding each part as itself and by itself and how it relates to the other parts of the market and stratergy.


This also would require the individual to identify and seperate out from himself the urges which cause him to take action inappropriately while trading (which we have defined as trading compulsively)


Our stratergy is not unique, but our approach and viewpoint of our stratergy is.


Our stratergy is not the theory behind it. Our theory is based upon our stratergy.


The keynote of this entry is how to get any stratergy to work for you as in trading that's the only thing that matters.


Side note- the theory itself is more versatile and applicable than any single stratergy as it can be applied, adjusted extrapolated to understand new strategies or troubleshoot old ones.




0 views0 comments

Recent Posts

See All

Price Action Anomalies

Definition: A Price Action Anomaly (PAA) for short is simply a break in a trend or pattern; A deviation from what the individual expects...

Words of wisdom

The ideal operating basis of a trader is one where their emotional state is not dependant upon thier profits and losses. The more...

Comments


bottom of page