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Of course not. The same way a geologist can not change the rock formations, a biologist cannot change the way species interact etc. All we can do is to learn! The learning process however enables us to create different things that help us to adapt to the ever changing reality. It is not the...

It depends on how dispersed your results are. The smaller the deviation is from the mathematically expected mean the fewer trials you need to have in order to create statistical significance.

I respect your opinion. Seriously, I do. I respect anybody's opinion as the matter of fact; that is what makes this discussion an interesting one. I have met many mathematicians who reject non-deterministic theories for any of the human activities. However, in order to stand by my beliefs I...

In one of my previous posts I have already presented the answer to your question. If you missed it I will post it again, but do not miss it again please :) Mean Deviation of m random walks with n steps each = sum(squareroot(2n/pi))/m; This is the ultimate answer and the main building block for...

This material is way too complex. The easiest way to play with splines is through MATLAB. They have prebuilt libraries of splines that you can apply to any data set.

Absolutely! Our discussion here is not about "HOW" we spot the patterns but rather "WHY" those patterns exist. The underlying premise of my approach is probabilities, randomness, stochastic, clustering of events and spontaneous synchronization. The arguments from others here are: the markets are...

I am so delighted that you see it!

You are not digressing; you are, actually spot on! By asking yourself these kind of questions one can eventually enlighten him/her self by slowly coming to the right conclusions. As to me, THERE ARE NO COMPELING REASONS FOR TA TO WORK AT ALL, however there are million occurrences that make the...

It cannot be more clear than this: http://en.wikipedia.org/wiki/Stochastic_process From WikiPedia: ...."Familiar examples of processes modeled as stochastic time series include stock market and exchange rate fluctuations, signals such as speech, audio and video, medical data such as a...

Any STABLE distribution has a logic (set of trading rules) that has positive expectations. For example: if the markets were truly Gaussian then the short option strangle positioned at 2 STD would be 100% guarantee winning strategy providing there is a stop loss at 1 STD. You can verify it for...

You are mixing up again the randomness of the markets with one’s abilities to react and adapt to the market moves. When you drive the car from home to work you never know what the road will through at you (i.e. road conditions are random, somewhat unpredictable) however, your ability to react...

No, I am not Taleb and I disagree with some of his statements in "Fooled by Randomness". However, I have expressed my beliefs 10 years prior to his book. My Ph.D. thesis dated 1985 on Mathematical Psychology has many experiments that back up my point of view. It just happened that Taleb...

Exactly

Your comments are true for the traditional RTM techniques with a stationary mean. However, by using predictive interpolators (such as splines) you can see sometimes that the mean is moving faster than the deviations from it. That enables a trader to decide what to do: follow the mean or expect...

Please understand that the actual chart is only one path of million possible random walks. If you picked a number and won the lottery you wouldn't consider yourself a guru at picking numbers and you wouldn't write a book on how to win the lottery. The same it is with trading. If you run a random...

Of course. There are many associative patterns that do exhibit stable behavior time-to-time. Yet, again, this is an indirect result of the underlying stable distribution.

dtrader98, I would like to thank you for your outstanding contributions. You are a breath of fresh air on this site. If it wasn't for people like you I would be long gone from here. But it seems that there is hope for ET if more and more of people like your self voice the rationale, education...

http://old.siggraph.org/education/materials/HyperGraph/modeling/splines/demoprog/curve.html http://nest.su.se/BEDonWeb/SplineTest/ http://www.saltire.com/applets/advanced_geometry/spline/spline.htm http://www.cs.uwaterloo.ca/~r3fraser/splines/bspline.html...

As frequent as possible. The frequency is directly responsible for the "smoothness" of your equity curve. If you can afford to trade 200 times a day and make 1 tick after all the expenses on each trade then even a very small skew in the distribution (51/49) will allow you to make reliable...

Trading is a probabilities game. I personally believe that placing bets on very frequent events that exhibit stable distribution patterns is the only reliable way of making money on the markets. Many traders like “Set-Ups". Although there is nothing wrong with that one thing needs to be...