The regularities of price movements: Part 1. Price orientation - page 9
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It probably won't. The second law of thermodynamics tells us: entropy of a closed system cannot decrease. Which means that for any real process, we must always observe disequilibrium between forward and backward directions in time.
On the practical side, we can look at the second law a little differently: if we do register a decrease in entropy at some point in time (e.g. when, as in this case, we see a swing), this means that the system is under external influence. If we can figure out which way as quickly as possible, we get a prize)
The entropy of a completely random normally distributed process is finite and maximal and cannot increase or decrease. The direction of the arrow of time in such a system does not matter. In either direction, the probabilities will be equal, as tests on random variables show.
So, gentlemen, that leaves us with two options.
Option 1: It's just volatility effects.
Option 2: This is the effect of the arrow of time, which means that the figure does indeed occur.
I will now check on a random walk with a Pareto distribution. Then I'll turn off the time arrow: I'll shuffle the bars and see what happens.
A test of Paretto-type distribution:
Range widening: 69206(8.04%)
Range narrowing: 68867(8%)
Figures? The probabilities are equal! The version of volatility is not confirmed.
on random would be if a series were generated without volatility effects. And if a random series is obtained from a real one with volatility preserved, it will be the same as for the original one.
Option 1: These are just volatility effects.
Well... no. If you analyse random quotes in terms of volatility, imho, you get the same thing, i.e. equality.
Normal -- a spike and then a smooth decay -- that makes sense.
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Even if you look at the picture that Dima posted -- horizontally mirrored quotes -- it looks unnatural.
Well... no. If you analyse random quotes in terms of volatility, imho, you get the same thing, i.e. equality.
Normal -- a spike and then a smooth decay -- that makes sense.
_____________
Even if you look at the picture that Dima posted -- horizontally mirrored quotes -- it looks unnatural.
The entropy of a completely random normally distributed process is finite and maximal and cannot increase or decrease. The direction of the time arrow in such a system is irrelevant. In either direction the probabilities will be equal, as the tests on random variables show.
If one were to gather statistics on price movements after fading triangles, a system would be born.
and if you time those ups and downs - that's how it works - right through the trading sessions :-)
This kind of thing was raised on the spider a long time ago, in 2004. The subject is interesting, I haven't got down to writing owls with different entry/exit options, MM... etc. - maybe somebody will be ready for it... :-)
This kind of thing was raised on the spider a long time ago, back in 2004. The topic is interesting, while I haven't specifically taken to laying out the patterns by writing owls with different input/output options, MM... etc. - maybe somebody will be ready for it... :-)
With vola everything is clear, to me, for example, it seems more interesting statistics when the daily range is extended.
I found it in the archives on my computer by searching for "Regularities". Haven't seen this TC yet myself... :-) I will have to have a closer look at it...
The"
The system is based on regularities of currency movements, which were derived from the processing of statistical data for two years. It is advisable to look at the figure when reading the text.
"
P.S. If it's nonsense - don't kick it, don't throw it into a thorn bush...