Thoughts on the random - page 3
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we remember, we remember...
I don't remember.
I remember - how are you, dlb, I'm a letter.
Well, what is there to do.
A market is a pseudo-mechanistic shit, described by pseudonewtonian equations with non-linear terms and other things. In general, everything in the world is described by a single equation:
Elementary reaction (change in pseudo-momentum) = Force * Elementary time interval
We need to learn how to describe the aftermath of this news - then we'll be golden. Once we confidently detect the news and determine its strength - we know the behaviour of the market for some near future.
We can try to describe it all - using a Newtonian approach. There is room for everything - the Lagrange function, harmonic oscillations, energy... The fun part is finding a force meter. And not only force, but also pseudo-momentum, which is the main characteristic of motion.
About 15 years ago, I tried to do it, but I was not familiar with forex. It got stalled. Now I think it needs to be remembered.
What's missing is a proper mathematician-physicist.
I am not talking about sermene approach, which allows to trade profitably for some time, but then to dump everything.
I am interested in a scientifically based approach.
In short, it is all nonsense. Who is not interested - go ahead.
Well, what to do.
A market is a pseudo-mechanistic shit, described by pseudonewtonian equations with non-linear terms and whatnot. In general, everything in the world is described by a single equation:
Elementary reaction (change in pseudo-momentum) = Force * Elementary time interval
We need to learn how to describe the effects of this news - then we'll be golden. Once we confidently detect the news and determine its strength - we know the market's behaviour for some near future.
We can try to describe it all - using a Newtonian approach. There is room for everything - the Lagrange function, harmonic oscillations, energy... The fun part is finding a force meter. And not only force, but also pseudo-momentum, which is the main characteristic of motion.
About 15 years ago, I tried to implement it, but I was not familiar with forex. It got stalled. Now I think it needs to be remembered.
What's missing is a proper mathematician-physicist.
I'm not talking about a sermene approach, which allows you to trade profitably for a while, but then take it all and lose everything.
It's the science-based approach that's interesting.
In short, it's all nonsense. Who is not interested - pass by.
Bullshit.
Bullshit.
Well, that's why I asked you to move past it.
Or provide constructive criticism.
Well, what is there to do.
A market is a pseudo-mechanistic shit, described by pseudonewtonian equations with non-linear terms and other things. In general, everything in the world is described by a single equation:
Elementary reaction (change in pseudo-momentum) = Force * Elementary time interval
We need to learn how to describe the aftermath of this news - then we'll be golden. Once we confidently detect the news and determine its strength - we know the behaviour of the market for some near future.
We can try to describe it all - using a Newtonian approach. There is room for everything - the Lagrange function, harmonic oscillations, energy... The fun part is finding a force meter. And not only force, but also pseudo-momentum, which is the main characteristic of motion.
About 15 years ago, I tried to do it, but I was not familiar with forex. It got stalled. Now I think it needs to be remembered.
What's missing is a proper mathematician-physicist.
I am not talking about sermene approach, which allows to trade profitably for some time, but then to dump everything.
I am interested in a scientifically based approach.
In short, it is all nonsense. Who is not interested - pass by.
It is quite logical to suppose that if the market were a linear system without delays and noise, then the news would look on a quote as steps up or down of different sizes. The quote itself would look like a stepped curve. If that view is correct (news = ladder), then the deviation of the price from the ladder at the arrival of the news is a reflection of the non-linearities and delays in the real market, as well as the noise. If the market structure did not change over time and there was no noise, the price reaction to the news would be the same. In that case, predicting that reaction would be quite simple: we would look back in time at the price reaction to previous news and know with 100% accuracy how the price would react to the news that has just arrived. But we already know that the price reactions to the news are different, even if the news move the price in the same direction. So the structure of the market changes over time. Or the noise is so strong that it masks our repetitive reaction of an unchanging market to the point of being unrecognisable. Then the question arises: is it worth applying an intricate model of market reaction to news if we don't know what the market structure is at the moment or is the noise so strong that it absorbs our fading sinusoids? The only thing that can work is to catch the momentum of the news arrival in its initial moment, ride that momentum on inertia until the exit conditions triggered. There is no need to apply differential equations to know when to enter and when to exit. For example, the big news on EURUSD usually comes at the opening of the NYSE. You should place pending orders waiting for an impulse of a certain size up or down, the TP and the SL. That's all the maths.
Forex market is an absolute and complete randomness... Imagine: what affects a single change in the EUR/USD pair ?????? Thousands of transactions by banks and the same number of army of traders.... And in turn these all transactions are completely random.... All these operations are the generator of random numbers..... Therefore, no matter how any arithmetic operations on random numbers are performed, we get random numbers at the output of the algorithm. And trends and flies are the name of a certain section of a random sequence, which either rise, fall or stand still.... Want to make money on These Random Sequence Plots?????????? Go!!!!!! BUT remember - any operation on random numbers will result in random numbers!!!!!!
If the right thing to say is: Your understanding of the forex market is complete and utterly random.
;)))
The take-off speed of the aircraft is 200 km/h. The aeroplane is mounted on a treadmill moving at a speed higher than the take-off speed. Will it take off?
Good afternoon!
I'm writing this and wondering how not to offend anyone or provoke a flood. I hope to be constructive, and, I'm just asking (not proving, not refuting, just wanting a dialogue).
If you take a series of quotes for many years and create on their basis a file of zeros and ones: zero - if the next price is greater than the previous one; one if vice versa - you get a pseudo-random sequence. Carefully call it with prefix "pseudo" for the time being.
Further, we generate ideal trades based on the pseudo-random sequence: if 1, we buy and exit on the next bar, if 0, we sell and exit on the next bar. The resulting equity chart is almost a flat line directed upwards (including the spread).
Now, a question: if we try to repeat our pseudo-random sequence using the Monte Carlo simulation expecting to reach the same result as in the initial step, i.e. ideal entries, what will we get? Let's calculate: there are 60,000 hour bars, hence there are 2^60,000 (!) different possible rows of zeros/units. Only one of them perfectly describes the inputs. It's kind of clear that even if we load the comp with 100 trillion generations, we probably won't get the desired result. Each time, our resulting equity will resemble a drain at the rate of spread. And it (the result) is there in nature! We have it on our history. In other words, we pant, count and smoke, we find nothing and say: "Ok, the problem is not solved, I'm going to bed. Doesn't it remind you of the problem of the probability of life in our universe? It seems to have comparable probability values in number of orders of magnitude.
I've laid out the general context, there's a lot to think about. What class of problems, so to speak, does my idea belong to?
All those zeros and ones obscure the point.
As I understand it, we are talking about trivial increments of the initial series. Hypothesis: probability of reversal of increment is higher than probability of continuation.
Here is the graph:
By eye, the situation is different.
Of course, we can take 6000 bars of H1 - that's almost a year - and run our hypothesis. But this is not the right approach. I don't like the topstarter's idea of running Monte Carlo either, as I don't understand whether Monte Carlo will match our chart in terms of patterns.
In general, the idea of using multi-year data is flawed. It is a subconsciously limiting theorem, but we get a result that will tend towards a normal law, and there is no such thing on the market.
There is some unknown trend in the marketplace, which is indicated by the last 50-100 bars, but this number is clearly insufficient for conclusions on the hypothesis. In these cases, bootstrapping is used instead of MonteCarlo. A sub-sample is taken from the existing sample. For example, 30 bars are taken from 100 bar, and then another part of this sample is taken at random, and so on. All in all, for example, several thousand results can be obtained on a limited sample as a profit factor.
In this approach we take into account the latest trend, not a year old. But we can dial in statistics from thousands of observations, not two figures like a forward test.
So my understanding of the idea of the topic is this:
check that the probability of reversal of the instrument increment is higher than the probability of continuation
We gather statistics using bootstrapping, not MonteCarlo.
As I understand it, we are talking about trivial increments of the original series. Hypothesis: the probability of an increment reversal is higher than the probability of a continuation.
No one has put forward this hypothesis.
Faa, readgpwr's post on the first page. It makes an interesting point, close to what I was thinking when I created the thread.