Google Optimization - Lessons from another Industry

Hi all...I have been trading commodities for well over a decade and have recently been studying SEO for a couple of hobby sites I have made...The analogies between "trading system optimization" (as used in commodity trading) and "search engine optimization" have since left me laughing many times...I'll list a few of these similarities here but encourage all SEO's to read up a bit on trading system optimization to see what an industry that has been optimizing parameters to exploit a market since the IBM punch card days have concluded about optimization in general...

(just a note...Many commodity traders feel that markets are chaotic (Chaos Theory context) and therefore behave according to a hidden algorithm...this algorithm is constantly changing...in this context it is easy to see the analogy to SEO)

General Consensus on Optimization:
1. Over optimization is bad. When the "algorithm" changes you will go broke.
2. A well optimized trading system should show good results in all markets (or I guess in the SEO world, in all search engines)
3. The optimization strategy must rely on the handful of parameters in the algorithm that rarely change, unless you are just looking to make a quick buck ("Content is King")
4. No system works all the time in all markets, you must diversify (have many sites optimized in different ways?)

Anyway I guess you get the idea...A good article from a long time optimizer who believes optimization is still beneficial can be found here:

http://www.turtletradingsoftware.com/articles/optimization_paradox.htm

In any case...search the engines for "trading system optimization" to see what others have already discovered

 

Very interesting. I'm sure there are a lot of other paralells involved.

Here are a few off the top of my head:

1) There are no real experts. People who say they are are either lying or delusional.
2) You can get grey hair and ulcers if you get too involved.
3) It's easy to be distracted by something that in the end will have very little to do with your success.
4) Optimization is only a piece of the pie. You still have to do a lot of other work in order to make money.

 

Yes...although people can become experts in 1 of the "inputs to the system" (I would guess that markets have more than the 100 Google uses)...commonly known experts:

1. Warren Buffet -- An expert in the "free cash flow" parameter
2. George Soros -- An expert in the "government intervention" parameter

Neither of these 2 really understands what the other is doing...but they both show quite a nice profit

 

just another quick note...Warren Buffet would be the "White Hat" of the trading world...Soros the "Black Hat"...

I'll stop before I take the analogy too far