8 The Scientific Method
An interviewer asked Ann Druyan (Carl Sagan’s wife), “Didn’t [Sagan] want to believe?” She responded, “He didn’t want to believe. He wanted to know.”
First principles, Clarice. Read Marcus Aurelius. Of each particular thing ask, “What is it in itself? What is its nature?”
—Hannibal Lecter1
Great trend followers approach trading as science and their foundation is the scientific method. At best, they view the world like physicists. And the following physics definition is dead-on applicable to trading success: “The science of nature, or of natural objects; that branch of science which treats of the laws and properties of matter, and the forces acting upon it; especially, that department of natural science which treats of the causes that modify the general properties of bodies; natural philosophy.”2
If you can’t measure it, you probably can’t manage it . . . Things you measure tend to improve.
Ed Seykota3
From error to error, one discovers the entire truth.
Sigmund Freud
Excellence in physics, or trend following, requires a solid grounding in numbers. Both disciplines work off models that describe relationships, and their common language, math, is finite. Physics and trend following thus work best when they constantly test models with real-world applications.
Trading your money necessarily means dealing with numbers and varying quantities—like a physics experiment. But the connection goes deeper. Physics is at its core about developing mathematical ...
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