Simplicity: Something to Keep in Mind Whether Playing Stocks or Writing Code

August 17, 2019

Humans love to make things complex. Years ago I spotted an engraving of Venice.

image

Dense, complicated.

Flash forward a few hundred years, and the map doesn’t look much different, just more dense, more complex.

image

In my lectures I use the term “fractalize” to capture the idea that as one looks more closely or monitors a series of changes over time, the complexity increases. My appropriation of the specialist word “fractal” was influenced by images like this:

image

So what?

I thought about this imposed or inherent complexification when I read “I’ve Reproduced 130+ research papers about “Predicting the Stock Market”, Coded Them from Scratch and Recorded the Results. Here’s What I’ve Learnt.”

Hats off for this analysis.

The text is worth a couple of reads and some thinking.

But I want to jump to the net net of the write up:

“… if you’re building trading strategies, simple is good 🙂

There’s another, equally significant conclusion too: Backtest.

The idea is to evaluate outcomes, identify what’s on the beam and what’s off the beam, then modify.

Keep things simple, right? Because either complexity is emergent or it is imposed. When complexity kicks in, remediation becomes difficult, even impossible.

Stephen E Arnold, August 17, 2019

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