On the unequal probability of a price move up or down - page 177

 
secret:

Have you tried using this rule yourself?

Hint: Do you know the mixture problem? Ask around.

I'm doing the inverse problem. And I'm solving it.

 
secret:

Have you tried using this rule yourself?

Evgeniy Chumakov:


I'm interested in what to do with the components, how to approach them correctly?

Hint: Do you know the mixture problem? Ask around.

I'm doing the inverse problem. And I'm solving it.

 
Олег avtomat:

Hint: Do you know the mixture problem? Ask around.

I'm doing the inverse problem. And I'm solving it.

Better give me a link so I can read exactly what I need to read.

p/s. How to highlight components I don't need, what to do next...
 
Evgeniy Chumakov:

Better give me a link so I can read exactly what I need to read.

p/s. how to highlight components I don't need, what to do next...

So what, you want me to look for links for you as well?

Yeah...

 
Олег avtomat:

So what, you want me to look for links for you as well?

Yeah...

You're retired. What are you doing?

 
Олег avtomat:


Yeah...

Trynda...

 

For a single solution (either optimized by brute force and simplex methods or analytically) we need an additional equation (condition), such as eur+gbp+usd = 1 or eur*gbp*usd = 1.
eurgbp = eurusd/gbpusd, so it seems redundant with spread accuracy.

Not every equation/inequality fits. Min sum of eur+gbp+usd on an interval, for example, does not lead to a single solution.
But to reduce volatility to a minimum - maybe.
The author has mused before with near perfect correlation of currencies, but the topic seems to be a dead end.

 
Олег avtomat:

Hint: Do you know the mixing problem? Ask around.

I'm doing the reverse problem. And I'm solving it.

Hint from your 1st year maths textbook: you need three equations to find three variables. And in your problem there are only two (independent). There is no way to do it without the predefinition.

 
b2v:

An additional equation (condition) is needed for a single solution (optimisation by all sorts of brute force and simplex methods or analytical),

like eur+gbp+usd = 1


0.32 + 0.38 + 0.29 = 1

 
secret:

Hint from your 1st year maths textbook: you need three equations to find three variables. In your problem, there are only two (independent). There's no way to do it without a predefinition.

The idea is to build a phase space, and in it the solution domain (if you are lucky, it will be one volume). Since the shit is probabilistic, we have the right to set the criteria for finding the optimum, and reduce everything to a narrower range.

But this is only if all equations have a physical (i.e. real and not from head and dreams) meaning, and the variables are constrained.

As long as thermodynamics and ballistics are drawn to the market, nothing good will come of it.