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Markets are not efficient at all times, however, they ARE most of the time and with the development of faster and faster electronic arbitrage tools they exhibit less and less opportunities to make reliable profits. If you run the true Random Walk you will surprise yourself by spotting all the...

There is a huge difference between your observations as a car driver and the information that your gauges are telling you. Any successful driver, pilot etc. is a result of training on how to use the driver's skill and his/her abilities to quickly process the information that is presented by the...

Well, like many others on this site you are mixing up two things: Random Processes and Uniformly Distributed Random Generators that are usually used to form a Random Walk. Many random processes have very stable and predictable distribution patterns thus enabling us to efficiently deal with them...

Nice! Here are some links to support it. http://www.pnas.org/content/101/12/4286.figures-only?cited-by=yes&legid=pnas;101/12/4286 http://www.youtube.com/watch?v=vbNDNkvzzuk

All right. Let's do an experiment. On a piece of paper draw 7 -8 vertical bars of different length. Using your eyes only draw a line through them that in your opinion would fairly represent their combined center of gravity. Then measure the bars and using EXCEL calculate a linear regression line...

Spontaneous Synchronization Time plays a key role for all living beings. Their activity is governed by cycles of different duration which determine their individual and social behavior. Some of these cycles are crucial for their survival. There are biological processes and specific actions...

Flocking Behavior Flock of birds, school of fish, herd of cows and stock market traders surprisingly exhibit the same type of behavior. This type of behavior called “Flocking” could be simplistically described by just a few rules that each member of a flock must obey. Each entity of a...

Disagree. If that would be true we could never drive cars or fly airplanes. Our eyes do regression analysis (not necessarily linear, of course) all the time. When we follow the perceived middle of the lane while in traffic we use other cars’ positions and their relative movements to assess the...

I am an educator by nature. If I have time (and feel healthy enough) I do not mind to share the bits and pieces. I am a big believer in education and overall good of probabilities understanding. However, I am not in a position to be a part of any war of “dicks” that is why I rarely post..

Although reversion to the mean is probably one of the most fundamental and stable observations of the stock market behavior NN algorithms are not the solution. Our research in this respect shows us that an algorithm that utilizes reversion to the mean phenomenon with consistent positive...

The concept of regression comes from genetics and was popularized by Sir Francis Galton in the late 19th century with the publication of “Regression Towards Mediocrity in Hereditary Stature”. Galton observed that extreme characteristics (e.g., height) in parents were not fully passed on to...

Splines are types of curves, originally developed for ship-building in the days before computer modeling. Naval architects needed a way to draw a smooth curve through a set of points. The solution was to place metal weights (called knots) at the control points, and bend a thin metal or wooden...

You need to do a bit of work on the API and have bid/asks for the underlying instruments of the combo, but it certainly can be done.

You need to find whether the combos are supported for this instrument. They might not be.

When you create a new combo in your TWS using the combo design tool you then can right clcik on it and choose "Chart" it will plot the chart for any combo, pair,option construct etc you want. I use this tool every day. You need to enable that feature though in the "Feature Selector".

use generic combo feature, create your pair and then chart it

Excellent post! I could sign my name under each line. The slides are hilarious! They look exactly like one of my presentations. Conclusions: All quants think alike. Knowledge is the must, Skill = your ticket to success. Cheers, MAESTRO

The big confusion here is that by the term "Random" original poster obviously had "Normally Distributed" in mind. So, if the question is "are the markets normally distributed?" then the answer is "Hell NO!". However, the markets are RANDOM. They absolutely must be to provide desired efficiency...

Not really, you should read a bit more on the modern Random Walk theory. The link below should help. http://mathworld.wolfram.com/RandomWalk1-Dimensional.html

Exactly! It’s just a mathematical formalization of an old traders' wisdom. Nassim Taleb runs this algorithm too.