6 Steps of the Scientific Method
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Does this help improve your investment approach?
- The scientific method is a way to ask and answer scientific questions by making observations and doing experiments.
- The steps of the scientific method are to:
- Ask a Question – Should I buy or sell?
- Do Background Research – Study the price action?
- Construct a Hypothesis – Long or short?
- Test Your Hypothesis by Doing an Experiment – What IS actually happening in the market?
- Analyze Your Data and Draw a Conclusion – Does my thesis align with the market (what is actually happening, not what you think will happen)?
- Communicate Your Results – Formulate a sound back-tested trading plan