Problem solving principles are different in different fields and for different purposes.
The steps of mathematical problem solving
You have a problem description, usually in natural language (a term sheet for example)
- Transform the problem description into a mathematical model
- Transform the model into a form that makes it of good nature for calculation
- Interprete the results
Each of the steps has its traps and needs special knowledge and skills. In derivative and risk analytics step one is about model selection and validation. And that needs the other steps. But also in general, step 1 is the most difficult one.
The proven way to add value
Do the most difficult work. It's valued and scarce, because it is difficult. This is what makes quant work indispensable. Quants have the most difficult parts to master and contribute, if it's easy it is not for them.
But whether you are a front office quant, a risk quant, a model validator, a library quant opt a quant developer what is difficult depends also on the methodology and technology you use.
We at UnRisk have decided to make the difficult work in 2. and 3. And we provide the UnRisk Financial Language to support 1. Serving quants doing the very difficult work, we have unleashed the programming power behind UnRisk - UnRisk-Q.
This post has been inspired by Seth Godin's post.