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harrytrader wrote: Current academics' stochastic process models are non-EMH (and subsume Technical Analysis). Just browse Quantitative Finance for example, or how technical and fundamental traders effect the stochastic process of the market - http://www.santafe.edu/~jdf/papers/jebo.pdf...

harrytrader wrote: But as we have seen, as many academics and practitioners are pursuing hidden markov models (HMMs) in quantitative finance, they are essentially subsuming Technical Analysis anyway, albeit more mathematically.

harrytrader wrote: My question was the difference between what you were calling RMH and RWH. So what TA is not Markov (or perhaps modelled as a Hidden Markov Model)? I could model some 3-step candlestick processes (let the states be [0,C,H,L] tuples) as third-order Markov chains for example.

sle wrote: Nice example. Technical analysts would think of the other side of the coin: non-martingale markov random processes.

sle wrote: Your drunks would typically be modeled as Markov random processes, in either case (depends on what the recurrent and absorbing states are).

harrytrader wrote: I assume Random Market Hypothesis is the same as Random Walk Hypothesis (that is what it is referred to in the literature). In any case remember a random walk is a markov chain, but not all markov chains are random walks. This is why Technical Analysis maps to...

valleyvintner wrote: As noted before, in terms of random processes, the issue of randomness is: is a market a Martingale (EMH) or multidimensional Markov (non-EMH, the type a TA would work) process. Whether EMH is flawed or not has nothing to do with it being based on Probability.

harrytrader wrote: While EMH random processes satisify the Martingale property, non-EMH random processes (with application to Technical Analysis) are typically formulated to satisfy the Markov property (albeit may be a multidimensional process): EMH = Martingale random process TA =...

Samson77 wrote: Logically, this makes these necessary and sufficient conditions. But could you say what trading system you would be a reference for?

tradeplay wrote: ScottradeELITE (Windows-based) did seem a much better and more solid interface application than Scottrader (a Java applet) though.

Actually the name of it is ScottradeELITE. I went by their Dallas office and played with a demo account. For the type of trading one might do with Scottrade, it looked pretty good.

armsoforion wrote: There was only a link to the Scottrader demo here: http://www.scottrade.com/flash/flash.asp but no Elite demo I could see. Is it different?

Is there a link to ScottradeELITE that explains the difference with Scottrader?

aphexcoil wrote: You didn't ask her up to your room to see your candlestick strategies?

ARogueTrader wrote: But this is why QRNGs are chosen over PRNGs. Would one laugh at random bits from http://www.fourmilab.ch/hotbits/generate.html ? Nature has the last laugh.

nitro wrote: I think this is as true as anything we know.

harrytrader wrote: It seems to me that academics are publishing as many non-EMH models as TA practitioners practice (just browse Quantitative Finance http://www.iop.org/EJ/toc/1469-7688/1/1 e.g. the EMH-violating ABS stochastic process in "Financial markets as nonlinear adaptive...

harrytrader wrote: Lest anyone be confused, words "stochastic" and "random", as in "stochastic process", "random process", "random variable", etc. are used interchangeably -- there is no difference in mathematics. Check out any standard textbook like...

harrytrader wrote: Probability (random processes) and (Euclidean) geometry are equally well defined mathematically. But also if the dice-roll process is say an n-th order Markov chain (a random process that could violate EMH).

bobcathy1 wrote: This is not true, as you can see studying textbooks on random processes; e.g. diffusion and jump-diffusion processes are both random processes, but have different structures: http://home.cerge-ei.cz/petrz/fm/f400n19.pdf As math stands, the last sentence is certainly...