Why is the normal distribution not normal? - page 31
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Once again, I've seen how different everyone is...
However, very similar to each other in their tendency to contradict and oppose each other. ;)
Dialectic, yeah.
:)
Imagine that the price goes up (without a pullback) by 10 pips for a minute. You have managed to take that 10 pips as a profit.
Now imagine that the price then went the same 10 pips for an hour instead of a minute. You have managed to take the same 10 points as a profit.
Both times you took the same profit, and it didn't matter how long the price was going those 10 pips (with no pullbacks at all).
You're missing out on the value of money given the time factor. "Both there and there" we took different profits.
If we're talking about 10 minutes and 60, there might not be much difference, but if we're talking about a day/week, the difference is already significant.
If we take 10 pips in one day it's Ok, if we take 10 pips in one year it's fun for people who don't like time in analysis.
You've totally crushed the man ;-). Why do you have to exaggerate so much? It is clear that initially everyone chooses for their TS a certain time horizon, in which it must work: operational (scalping), tactical (intraday) or strategic (week, month). Inside this horizon the time is not important. For example, when you set a pending order with expiration time, you're saying that you are interested in a particular level in a particular timeframe. And it doesn't matter if it will take 5 minutes or 10-10 minutes within this timeframe. It is clear that no one will wait for a year.
In the next thread, grasn forecasts trajectories, and in the end it is levels that are important, but shifts left and right in time (deviation from the forecast) may be very large. But it must not affect the profitability (within a selected horizon of a "week").
I'm not going to argue with anybody, if you disagree, speak up, but don't get upset. ;-)
You've totally crushed the man ;-). Why do you have to exaggerate so much? It is clear that initially everyone chooses for their TS a certain time horizon, in which it must work: operational (scalping), tactical (intraday) or strategic (week, month). Within this horizon the time is not important.
The original message was that time is not important at all. Now there is a horizon. And besides the time value of money there is such a thing as opportunity cost.
"Having frozen your money for one hour instead of the 10 minutes, you lose the possibility to trade several 10-minute deals in other symbols, thus reducing the profitability of the system. That is, time cannot be ignored. It can be analysed in different ways, but it cannot be ignored.
"Fair" value, is actually knowing where the price is going to go. >> Well, everybody got it? - >> that it's impossible to know.
I disagree a little. I think a fair price (rather than value, of course) can be predicted with a probability greater than 0.5. And certainly a "fair price" of an instrument objectively exists. Here is an example to illustrate the point.
Imagine this situation. Yesterday a hamburger cost $2 and a roller bearing $4. I had $4 yesterday and I could have bought 2 hamburgers or 1 bearing with it. Let's say I bought 1 bearing. Whether I knew it beforehand or it was by accident, suddenly today the price of roller bearings skyrocketed. And now 1 bearing costs $6. Now I can sell my bearing and buy 3 whole hamburgers instead of 2 like yesterday. The question is, is there a fair price for a bearing or can it increase in price indefinitely relative to a hamburger?
Not at all. The price one buys at may be "unfair" :)
Good question by the way. Maybe create a thread on whether markets are fair/efficient. :)
You shouldn't, it seems to me. The answer is obvious: in the short range, of course not, in the long range, more or less.
By the way, pictures of distributions confirm this everyday observation.
It occurred to me (about the distributions): if we take a pair of Random generators and divide one by the other (exclude generation of zeros in the "denominator", self-sampling), we get something like the observed one. That is, a pole in the middle and thick tails. With envelope similar to a pair of hyperbolas. And it's understandable - after all, currency pairs are fractions in fact....
Who has everything ready for pictocomposition (c), can you already try it? :)
// I don't claim that they are actually OK. What I don't know, I haven't tried.
// But to start with approximately normal - sum (6-8 pieces) of several usual linear randoms
// minus expectation to zero out the middle of the bell