Interview with Nick Scott, creator of the SureFireThing Camarilla
cam·a·ril·la. A group of confidential, often scheming advisers;
a cabal.[Spanish, diminutive of cámara, room, from Late Latin camera.
is a tall, unassuming gentleman, of middle years, and the tasteful
trappings of a man who enjoys success, but has not let it go to
his head. Corpulently overweight, and florid of cheek, he's obviously the kind of man who likes a drink, but don't let this fool you - under the hood is an intellect so sharp he could cut you using just his toungue. We tracked Nick Scott down to an exclusive bar in the
fashionable district in which he lives with his wife and children.
Nick granted us a few minutes out of his busy schedule to talk about
the SureFireThing Camarilla Equation and how he discovered it.
Nick, how did you come to invent the Camarilla Equation?
The SureFireThing Camarilla Equation - let's use proper names, shall
we? (smiles). Basically, it sprang from my interest in Fibbonacci
levels and a branch of technical analysis called 'Market Profiling'.
I was working as a bond trader back in the 80's, and started to
notice that there were regular patterns emerging every day, differing
only in scale. In the evenings at home, I managed to gather enough
data to produce what I felt was a statistically significant model
of what was happening. Although Fibbos are actually (in my opinion
of course!) rather unreliable until after the event, they did lead
me to notice something else, something much more interesting in
fact. It was only after many long nights and a sudden thought that
Market Profilers were actually concentrating on the less important
implications of Steidlmayer's work that it all fell into place,
and it was then fairly simple to reduce it down to a calculation
that mapped nicely onto the factual data. I must admit to being
surprised at how good and consistent it was, especially across many
different instruments. It doesn't require any paramaterisation,
and works as well on a liquid stock as on a soyabean futures contract.
In my eyes, it's almost like the 'golden mean' of trading.
what's the 'Golden Mean'?
Ah. Since classical times, builders and artists have used a ratio
of height to width that is essentially... pleasing to the eye. I
like to think the SureFireThing Camarilla Equation works in pretty
much the same way - it is all about believability - at what point
will the majority of traders stop believing it can continue the
move, and close their trades, causing a reversal...After all, everybody
is watching the same chart! (Note - Nick Scott had a classical
education at a top flight school)
see. Do you sell the equation?
I'm a busy man, so I don't have time to promote or market the Equation
myself, so all licensing is through a company who run www.surefirething.com,
and they sell an online version. Works well for both parties, I
you licensed it anywhere else?
No. Why would I? I'm aware that other companies or people attempt
to sell 'versions' of a 'Camarilla' equation, but I really can't
be bothered to chase them up - considering how complex the maths
is I'd be surprised anyway if they had found the same formula as
I did. Their versions don't work as well as the real deal, I'm told.
Caveat Emptor, I'd say!
Caveat Emptor - Its Latin. "Let the buyer beware"
Point taken. One final question - why did you call it the 'Camarilla
Ha! Everyone asks me that. And by the way, it's the 'SureFireThing
Camarilla Equation' - I don't want to be associated with all the
crackpots and chancers out there trying to cash in. Sorry, where
were we? Oh yes - when I first started trading, I thought (as a
lot of people do!) that the markets were controlled by a secret
'insiders club' of .. er ..powerful organisations who manipulated
prices for their own benefit. I remember that at the time I was
smugly sure that this was so, and was excited to be joining (as
I then thought!) this secret 'cabal' (Big smile!). Of course, as
I learned more about the markets, I realised that this was nonsense,
and that the markets are far too big to be effectively controlled,
even by gigantic financial corporations - I was still getting
creamed, even working for the Bank. However, it still looked to
me as though there was a pattern in what was supposed to be the
'random walk', a pattern that matched very closely what I imagined
a 'secret society' would try to implement in order to maximise their
revenues - you know, take it up so they can bring it down, and vice
versa. The obvious conclusion, of course is that if you have enough
participants, statistically they start to behave in broadly model-able
'over-ways', and this leads to the patterning that the equation
is so good at generating. Thus it seemed like a perfect name for
it - the word 'Camarilla' is based on the latin word for room (camera),
and it means basically a small clique of 'advisors' who try to manipulate
the person in power for their own ends. Frankly, it was just a joke,
and I am always surprised at how seriously everyone took it. I wish
now I'd thought of a better name, because I'm so bored with answering
that one, and of course, 'Camarilla' turned out not to be trademarkable...
but just one more final final question! How complicated is
(lights a cigarette) Well it won't fit in a few lines of code if
that's what you are asking. The process is actually quite convoluted.
I'd rather not go into any further details, I'm sure you understand.
course. Just one final final final question! How effectively
does it predict the next day?
Mmmm. It doesn't predict anything. I'm not a fortune teller. All
it does is tell you what to do IF certain things happen tomorrow.
If I could see into the future I'd have not picked up the phone
when you called! (laughs). Now I really have to go, I'm afraid.
for your time, Nick, and nice meeting you. Have a nice day.
You're welcome, old chap.
we were pleased to meet a second time with Nick Scott, during
which the great man answered many of our questions about stop losses
and exiting trades. Nick Scott also showed us the original 1989
newspaper, framed on the Stott office wall, on which you can still
just make out where he scribbled the equation all those years ago.
Nick Scott's notebooks and data references have been placed into
storage for posterity, and he tells us that one day, he may open
a trading institute where such wonderful historical memorabilia
Typical Nick Scott Quote -
aint broke, dont fix it!
quote 2 -
same dance as everyone else, just learn how to sit down BEFORE the
Another Nick Scott Quote -
go broke because they can't adapt. They think they have found the
'secret', and may even make money for a while, but then suddenly
it stops working. They don't adapt, they just keep on trying the
same old (now non-functional) trick until they run out of cash.
The reason I'm Nick Scott and you are not is that I adapt on a daily
basis. Adapt or die!"
Cigarette Quote -
a Marlborough Light and I'll tell you what the Hang Seng is going
to do tomorrow. Give me a pack and I'll throw in the Dow too".
on Candlestick trading-
watching candlestick traders going cross-eyed trying to spot a pattern
in their crazy little lists of 'reverse anvils' and 'widows turn
arounds' and so on. Stare too closely and the forest disappears
into a quilt of trees!"
Nick Scott on the crash of 2000