Assessing data

I hadn’t seen this post before, its on the Flowing Data blog from March 2010:
Think like a statistician ā€“ without the math
http://flowingdata.com/2010/03/04/think-like-a-statistician-without-the-math/

Of course, I am reading the post in the context of trading, so the data I am considering is the price/volume/time data streaming across my screen as the the trading session unfolds. There is plenty in the post that made a lot sense to me, maybe it will be helpful to others as well. Some highlights:

…The point is that trends and patterns are important, but so are outliers, … and inconsistencies…
…The more you know about how the data was collected, where it came from, when it happened, and what was going on at the time, the more informative your results and the more confident you can be about your findings…
…Finally, and this is the most important thing I’ve learned, always ask why. When you see a blip in a graph, you should wonder why it’s there. If you find some correlation, you should think about whether or not it makes any sense. If it does make sense, then cool, but if not, dig deeper. Numbers are great, but you have to remember that when humans are involved, errors are always a possibility.

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