Turbulence and Starlings as a model for market trading

Over the last couple of months I have read perhaps a dozen books on trading -one or two new ones but mainly from my own collection. Years ago I spent several months developing a whole series of extremely short term trading systems, mainly based on some sort of mean reversion technique i.e. to buy when a market has been weak but is beginning to strengthen, and sell when a market has been strong and starts to weaken. But these systems take a huge amount of trading infrastructure to work and I eventually abandoned the attempts.

But catching up on what has been happening in "advanced" market trading, it is clear that this would have been the way to go. It is actually slightly disappointing to discover that I was, in some respects, on exactly the right lines, even if I wasn't able to take it forward. But it also gives me support for my current plans.

Next week I intend to have a last "practice" week and then go live with all systems the week after. As a heuristic technique for developing my ideas I have been considering how I would explain my techniques to a third party - something I wasn't very good at when I worked in fund management. My basic metaphors are "order within apparent trubulence" - how, for short periods of time, chaos disappears and a tradable, directional bias develops. I have been re-reading some very technical papers on the broad field of "complexity" and there is little doubt that there is strong theoretical support for the views I have

And pictures of turbulence have got better and better!


Lots of borderlines between chaos and order

I remember the first time I saw one of the detailed Voyager pictures of the clouds of Jupiter. Yet within the apparent chaos, the great red spot maintains a coherant unity (and has done so for at least the last hundred years). The animations of Jupiters clouds are wonderful

A different pattern of "order out of chaos" is shown by flocks of starlings in flight. There have been loads of automata models of birds in flight, it being relatively easy to generate complex flight patterns from some very simple rules. Some of these rules come under the broad heading of "mean reversion", with outer birds moving back towards the average position - this is what produces the waves that appear within the flocks as each bird adopts something like the same behavior.

There are some superb photos of starling flocks - if the first one were available as a large print I would be very happy to hang it on my wall!

Perhaps I could create my own 4 x 4 picture from other photos such as those below?