I have to agree with Sunshine here. Indicators, signals and strategies are much more art than science.
Do we use science (mathematics)? Yes, absolutely. Markets are fluid and dynamic. They are not precisely repeatable or consistent. What works today or in the past may not work tomorrow. In fact the very attempts we make to profit from the market actually will affect, impact and move the market. And those influences aren't easily testable in historic data. However that does not mean that we can't build a system which can profit in and from the markets. That is what all of us here are attempting to do.
In engineering or any of the mechanical trades, systems are built with specified tolerances which allow for variances in specified places. It trading we specify the tolerances of our mechanical systems with various parameters. Stops, limits, the various parameters of the various indicators and signals used. It is an art to establish good tolerances in our trading systems. It is very much about the right compromises. And we will each choose different compromises than someone else with precisely the same data.
There is a very thin line between art and science. The line moves toward one or the other based on our understanding. The more we know. The more we can quantify. The more data we have to model our understanding and make decisions, the closer it gets to science.
There is far too little data that we can understand, qualify and quantify as to the movement of the markets for this to be anywhere near a pure science.
The best we can do is to take what we can know, understand, qualify and quantify. Build our systems. And include sufficient tolerances, that we make more than we lose. In so doing, we profitable. We will always be endeavoring to increase our data, knowledge, and understanding so that we can continually improve our systems.
If it were truly science and only science, the brilliant scientists here would be raking in the profits.
There is a lot more art to our science than is often given credit. But for us, it is the science which gives vision for the artist to do what he does. It isn't that there isn't science in what the artist does. But that we are unable to qualify and quantify precisely and repeatable those things that the artist might do by some gifting, intuition or insight into the picture that science paints for him.
It is the artist willingness to do things that the scientist doesn't understand, that makes an artist an artist. The scientist doesn't understand what the artist does because the scientist hasn't quantified the data, or simply doesn't have any data to prove the artists actions.
There is more data that we don't know about the markets and why and how they move, than what we do. Until the day that we
know significantly more than we
don't know, it will be art. But fortunately for us, there is enough that we do know, that we can attempt to make a profit.
But I will go out and say that in my opinion, the people who will make the most profit are actual the best artist in the group, not the best scientist. I would also go on to say that the best scientists are those with a healthy amount of art in their science, even if they do not attribute anything to art.
My 2 pips.
Jimmie