Trade Like a Scientist

Sunday, June 24, 2007 | 08:01 AM

Doc Steenbarger has a terrific 3 part series on trading like a scientist. All three posts are short and easily digestable, but here's what stood out to me:

• Observation and deduction are the key to developing a trading strategy;

• Understand what is meaningful and what is random.

• Scientists have humility; They know their best theories are only approximations of reality.

• Knowledge, for a true scientist, is always provisional;  Ongoing empirical tests generate further additional observations and revisions.

• Scientists remain open to data that may invalidate their hypothesis.

• Scientists focus on the process and not the outcome. A single winning or losing trade does not prove a strategy works -- but it does provide some additional data.

• The aim of Science is to understand through observable phenomna, what is going on in reality. This, Scientific traders do not "Trade Without Understanding;"

• Since all scientists understand probabilities, they never Oversize positions;

• Recognizing errors is key to an objective mind. Thus, why Traders should be prepared to admit error: never average down, and always use stop losses. 

Good stuff, Doc. Thanks!


Trade Like a Scientist - Part One: The Scientific Mindset
Brett Steenbarger
TraderFeed, June 15, 2007

Sunday, June 24, 2007 | 08:01 AM | Permalink | Comments (8) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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Doc Steenbarger omited the most important part.

Reading "The Secret" and imagining yourself as the owner of a private equity firm.

Best regards,


Posted by: ECONOMISTA NON GRATA | Jun 24, 2007 9:19:03 AM

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