the quality of discussion and research.^2 For technical writing, the focus is on content (in
this and all other kinds of technical writing), which can lure researchers into viewing docu-
mentation as a purely mechanical task, a churning out of dull reports to satisfy policy.
But, technical writing as a term focuses too little attention on the process of fully describ-
ing a trading/investment system. Without written words, research and market experience
is only a fuzzy, subjective flow of impressions, adages, disparate spreadsheets, and data.
Words, equations, diagrams, and other forms of documentation make knowledge objective.
Documentation reduces research and experience into facts product teams can remember
and criticize. Describing a trading strategy in writing forces the logic and order of sequen-
tial thought.
A component of building new strategies is starting with fresh new perspectives on old
strategies or research, deconstructing preconceived ideas about quantitative finance and
how to study markets (i.e., to focus on science and not scientism).^3 Often faults in old
strategies become apparent only when product team members reassess the mathemati-
cal and technological ideas that in the past supported the conclusions. Documenting new
thinking is particularly useful because it requires the team to reveal its thought processes,
providing a snapshot in time of the team ’ s understanding of a trading/investment strategy,
permitting them to identify and evaluate problems and helping them resolve those prob-
lems. Through repeated efforts to articulate logic on paper, team members transform their
knowledge of specific strategies and of relationships between disparate strategies into an
analytic process, subject to peer review.
Team leaders and managers who read descriptions learn about the team ’ s thought
processes, their points of view, insights, and difficulties. Without realizing it, traders and
financial engineers often create semantic noise (in communications theory, superfluous
information is called “ noise ” ), leading to confusion about details of system design.^4 But,
managers can critically review written descriptions:
● Showing teams precisely where thinking is unclear or noisy.
● Posing questions designed to shed light on problems underlying their unclear thinking.
● Providing feedback for communicating complex financial and technological analysis
more clearly.Documenting specifics of a trading/investment strategy goes beyond what has already
been learned to what the team learns as they write. In this regard, documenting enables
product teams to continue to learn about trading and strategy development, that is, writ-
ing begets new learning. Researching quantitative methods can be largely a process of
acquiring facts and isolated equations, and the process of documenting (at the level of the
average reader) helps define and clarify what the product team knows and does not know
about a strategy. This is crucial because successful learning is engaged and interpersonal.
New knowledge and new discoveries of interrelationships among existing knowledge
that teams uncover on their own tends to be more innovative than knowledge they simply
reference. Furthermore, documenting effectively involves the team in the formulation of
abstract ideas and self-criticism. Serious technical writing forces focus, organization, and
structure, all of which are essential elements in the acquisition of new knowledge.^5
Over the course of their research, successful product teams do more than just photo-
copy source documents, including:
● Writing up what they find. What you do not write down, you are likely to forget, or
worse, misremember.
● Keeping notes, outlines, summaries, commentary, critiques, and questions.CHAPTER ◆ 8 DESCRIBE TRADING/INVESTMENT IDEA 89