In my initial post, I mentioned how cybernetic concepts played an important role in the development of my trading system. While I have blogged extensively about various aspects of my trading system, I have not blogged about cybernetics. Cybernetics was a term coined by Norbert Wiener in the 1940’s that he derived from the Greek word κυβερνήτης (kybernētēs) which means steersman or governor. Paul Pangaro defines cybernetics as: “the rich interaction of goals, predictions, actions, feedback, and response in systems of all kinds”. Additionally, “In working to derive functional models common to all systems, early cybernetic researchers quickly realized that their “science of observed systems” cannot be divorced from “a science of observing systems” — because it is we who observe [von Foerster 1974]. The cybernetic approach is centrally concerned with this unavoidable limitation of what we can know: our own subjectivity. In this way cybernetics is aptly called “applied epistemology””. Thus an intellectual enterprise which started out with the investigation of teleological systems involving feedback and control, merged with concepts from general system theory, to incorporate notions such as holism vs. reductionism, nominalism vs. essentialism.
There is a tremendous amount of information about cybernetics on the web. I have provided some links on the right hand side that can serve as an introduction and a guide for more advanced material.