Martinghoul
Senior member
- Messages
- 2,691
- Likes
- 277
Huh?
Atilla
Legendary member
- Messages
- 20,844
- Likes
- 4,027
This works for me most of the time Murphy's Law equation...
Make sure you back test it first though... :cheesy:
PS. If we're true to the real spirit of Murphy's Law, there's undoubtedly something wrong with this equation as well. BEWARE...:whistling
oiltanker
Established member
- Messages
- 955
- Likes
- 89
they do sign confidentiality agreements. The mathematicians who say price has no memory think technical analysis [which is nothing but price memory] is little better than 'a belief in santa'
mathematical finance course outlines might give you a clue.
http://en.wikipedia.org/wiki/Mathematical_finance
mathematical finance course outlines might give you a clue.
http://en.wikipedia.org/wiki/Mathematical_finance
wackypete2
Legendary member
- Messages
- 10,211
- Likes
- 2,058
e=mc(squared)
If you can understand that, the markets should be easy!
Peter
If you can understand that, the markets should be easy!
Peter
i dont get it; how do they not believe in TA and use maths ?
Like do they just use maths to try find out how far the market will extend its rally or something?
GammaJammer
Guest Author
- Messages
- 1,246
- Likes
- 830
Data mining, pattern recognition (NOT chart patterns), machine learning, smart order routing, inter market covariance matrices, granger causality tests etc etc
None of this stuff is Technical Analysis, most or all requires a reasonable aptitude for maths.
The term 'algorithmic trading' is a catch-all description that covers an awful lot of stuff.
GJ
oiltanker
Established member
- Messages
- 955
- Likes
- 89
there is a whole debate between those who say price has memory and those who say it doesn't. So one talks about TA the other talks about coin tossing and probability.
One professor of statistics [on fxstreet] says he studied indicators for years and never found anything statistically meaningful in them so now he doesn't even use a chart just the quote page.
for more on games of dumb luck
...Our firm has become much more forceful with the above average over the years. Can they predict their own performance? With luck, their enthusiasm for science and prediction allows us to hoist them on their own petard. If they can't predict their own performance, i.e. an R2 of close to 0.0, then clearly they either aren't putting enough effort into data collection or prediction, or they could be adequately substituted by a random monkey. If they can predict their own performance brilliantly, i.e. an R2 closer to 1.0, then they should be thinking about automating themselves out of a job. ..
http://www.gresham.ac.uk/event.asp?PageId=4&EventId=817
how many people can predict their system/performance or could they be adequately substituted by a random monkey?
and so it goes on.
the only people who really know what is going on are the order clerks who know where the big orders are but because they have that knowledge they can't trade [officially!] . Sam Sieden was an order clerk and if anyone is interested he shows people how to spot where the orders are on a chart.
One professor of statistics [on fxstreet] says he studied indicators for years and never found anything statistically meaningful in them so now he doesn't even use a chart just the quote page.
for more on games of dumb luck
...Our firm has become much more forceful with the above average over the years. Can they predict their own performance? With luck, their enthusiasm for science and prediction allows us to hoist them on their own petard. If they can't predict their own performance, i.e. an R2 of close to 0.0, then clearly they either aren't putting enough effort into data collection or prediction, or they could be adequately substituted by a random monkey. If they can predict their own performance brilliantly, i.e. an R2 closer to 1.0, then they should be thinking about automating themselves out of a job. ..
http://www.gresham.ac.uk/event.asp?PageId=4&EventId=817
how many people can predict their system/performance or could they be adequately substituted by a random monkey?
and so it goes on.
the only people who really know what is going on are the order clerks who know where the big orders are but because they have that knowledge they can't trade [officially!] . Sam Sieden was an order clerk and if anyone is interested he shows people how to spot where the orders are on a chart.
Last edited:
To the OP, I'm afraid that there isn't a simple answer to your question.
To GJ, I have to disagree with you here;
Technical analysis, using your definition, uses precisely the same information that Quantitative or Algorithmic traders use*. Each is a product of Time and Sales - Technical analysis looks for pictures (literally) in the data, Quantitative analysis looks for co-integration etc.
How the information is used seperates the two, the information is the same. The disctinction between the two, IMO, is too tight to call. Variance, for example, is considered a "kosher" metric to... but what are Bollinger Bands? It goes both ways.
* this excludes information like orders that a particular bank might have that another doesn't.
Last edited:
can anyone suggest a book to read about this topic? or website
Atilla
Legendary member
- Messages
- 20,844
- Likes
- 4,027
http://www.amazon.co.uk/Trading-Cla...=sr_1_1?ie=UTF8&s=books&qid=1282719713&sr=8-1
This book has a statistical analysis and scoring method for a host of chart patterns. Not too mathematical but some statistics on frequency of occurance and % of pull backs and extensions from a breakout / reversal etc.
Try and get the 2nd ed.
GammaJammer
Guest Author
- Messages
- 1,246
- Likes
- 830
I can't really disagree with any of that Mr G. I probably just made my point badly. But what also, I think, needs to be added, is a distinction between the normal rigour level of bank quantitative anlysis regimens and the normal rigour levels for what we know as technical analysis. In short, most practitioners of T.A. (and I include myself here most if not all of the time) are incredibly fuzzy and inconsistent about how they apply it.
So personally I see TA as merely a visualisation / presentation tool. I don't attach to it any of the quantitative rigour of, say a covariance matrix or whatever. Not to say that it's not useful for all that, but merely making the disticntion (I hope) a little better. For sure it is, oftentimes, basically the same inputs, but the output, in both scope and application is, from where I'msitting, a world away.
Have I made it better or worse typing all this cr@p??
GJ
scose-no-doubt
Veteren member
- Messages
- 4,630
- Likes
- 954
Not an answer to your question but you might find this interesting. I did
http://www.youtube.com/watch?v=ed2FWNWwE3I&p=2B3E96FC2778F08D
http://www.youtube.com/watch?v=ed2FWNWwE3I&p=2B3E96FC2778F08D
im not looking to find a formula to make me money easily im just imterested in understand how they go about analysing the markets; i never once mentioned money in my original post
maybe but i was interested in new ways to analyse data
i dont believe in technical analysis. how the hell can price know that its finding resistance at a diagonal line when its rising; i believe it just rises and these are the areas that it hit; no price memory. i just want a way that i can help me to look at charts better than TA
GammaJammer
Guest Author
- Messages
- 1,246
- Likes
- 830
scose-no-doubt
Veteren member
- Messages
- 4,630
- Likes
- 954
But price isn't sentient. The traders know the resistance is coming up, no?
GammaJammer
Guest Author
- Messages
- 1,246
- Likes
- 830
yes. And no decent traders I know of respect rising resistance / falling support. No systems that I know of enshrine it in code either. It's kind a nothing concept that arises wholly because someone can see a line to draw. I.e. sloppy T.A.
