How are you with a market mindset? - page 14
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Look at the article above, it's all explained. And its physical meaning, indeed, means the first derivative of income from price - by how many roubles the income will change if the selling price of the commodity changes by 1 rouble. Hence, it is a dimensionless quantity.
1) I'm not sure that the concept of a commodity-money market applies to forex. Even the tax legislation considers trading there to be an exchange activity, and not an enterprise (which includes the production and sale of goods and services).
2) In my view, commodity-money markets are more about spatial arbitrage (buy where it is cheaper, sell where it is more expensive), while speculative markets are more about temporal arbitrage (buy when it is cheaper, sellwhen it is more expensive). To be on the safe side, I make a disclaimer that, as always in economics, this is not a hundred per cent true, but much more than fifty per cent true).
1) I'm not sure that the concept of a commodity-money market applies to forex. Even tax law considers trading there to be an exchange activity rather than an enterprise (which includes the production and sale of goods and services).
2) In my view, commodity-money markets are more about spatial arbitrage (buy where it is cheaper, sell where it is more expensive), while speculative markets are more about temporal arbitrage (buy when it is cheaper, sellwhen it is more expensive). To be on the safe side, I make a caveat that, as always in economics, this is not a hundred per cent true, but much more than fifty per cent true).
So let's see what and where their differences are. Somewhere they must have common ground. First you have to fully understand the market for goods and services. You have the wrong thesis about the speculative market. For it, you should not sell at the most expensive price, but at the only optimal price that is less than the maximum price that ensures maximum profit. I will try to prove it to you, although, to me, it is already a proven fact. Trying to sell at an expensive price can lead to a complete standstill in trading. I think for both markets you need to apply where and when.
1) I'm not sure that the concept of a commodity-money market applies to forex. Even tax law considers trading there to be an exchange activity rather than an enterprise (which includes the production and sale of goods and services).
2) In my view, commodity-money markets are more about spatial arbitrage (buy where it is cheaper, sell where it is more expensive), while speculative markets are more about temporal arbitrage(buy when it is cheap, sellwhen it is expensive). To be on the safe side, I make a reservation that, as always in economics, this is not a hundred percent true, but much more than fifty percent true.)
There are other options: buy at a large wholesale price, sell at a small wholesale price or at a retail price. In the same place, there can be a retail price, a small wholesale price and a large wholesale price.
Let's see what and where their differences are. Somewhere they must have points of convergence. First we have to fully understand the market for goods and services. Your thesis about the speculative market is wrong. For it, you should not sell at the most expensive price, but at the only optimal price that is less than the maximum price that ensures maximum profit. I will try to prove it to you, although, to me, it is already a proven fact. Trying to sell at an expensive price can lead to a complete standstill in trading. I think for both markets you need to apply where and when.
I think the differences are easiest to see with the commodity futures market as an example. The same trader can be both a trader in that commodity and a futures speculator. And the two sides of his activity will overlap slightly. It is like eating dessert after soup, but not mixing them on the same plate, under the pretext that they will get mixed up in the stomach anyway.
In the same place, there can be a retail price, a small wholesale price and a large wholesale price.
This is a variant of price discrimination. It is just specific to commodity markets (although it technically contradicts what I said). In a speculative market something like this is only possible for market makers, but the price difference will be very small.
You have to draw a probability distribution there, and everything will be instantly visible. Why 5000? If it's minutes, then it will appear in approximately 3.5 days. If it is ticks, it will also show up. In general, the larger the better, but when I dealt with this issue, I've found out experimentally that the trend is usually visible from 1000 of data. And the market can behave for some time very similar to a random process, so it is better with some reserve.
Let me explain again - how to calculate the sample size correctly.
There is the Chebyshev inequality.
From it we have: to "cover" almost the entire normal distribution, up to the quantile of 99.9% confidence level = 3.2905, you need approximately:
1/0.09/0.09/0.09 = 1371 measurements.
I.e. about 1440 values - exactly as many as the minutes run in a day...
Forex is a funny thing, I tell you...
Let me explain again - how to calculate the sample size correctly.
There is the Chebyshev inequality.
From it we have: to "cover" almost the entire normal distribution, up to the quantile of 99.9% confidence level = 3.2905, you need approximately:
1/0.09/0.09/0.09 = 1371 measurements.
I.e. about 1440 values - exactly as many as the minutes run in a day...
Forex is a funny thing, I tell you...
We have reasons to disagree with this conclusion, as the market is not a random process, but a process with memory and there may not be enough daily minutes. That is why Chebyshev's inequality cannot be applied directly.
I support that, in particular for EUR/USD the optimal sampling in minutes turned out to be 90 000 - 100 000 minutes, which is equivalent to 60 - 70 trading days or 84 - 98 calendar days.