A Kinetic Energy Idea
- Thread starter MAESTRO
- Start date
i don't think the cat is either black or white...
it's more like cat vs cat without a leg
it's more like cat vs cat without a leg
ok, MA is also price value, but when you look at the right edge of the chart why would an averaged value be of any help... Moreover, an average of x periods, where x is set by you .... ?
i would probably do fine reading the tape but i'd still have to draw price action on a piece of paper because the brain can't remember so many numbers.... the only simple reason i guess...
i would probably do fine reading the tape but i'd still have to draw price action on a piece of paper because the brain can't remember so many numbers.... the only simple reason i guess...
Exactly! So if you had the means of helping the "tape reading or chart reading" without substitution of the ârawâ info on it would that be better as well? You see, the point I am trying to make is that using helpers (models, indicators, goggles, rulers etc.) is to enhance the ability to process the otherwise "hidden" info that escapes our natural abilities to comprehend.
Prepare yourself for some more (most likely useless) ramblings on this idea...
A couple of thoughts:
First, if no buyers exists, each individual seller will continue to lower their price until they reach their own personal 'critical level', after which they feel that they are losing opportunity by selling (and therefore feel that any sale UNDER that price is a potential buy).
If no sellers exist, each individual buyer will raise their bid to entice sellers until they reach their own personal critical price level, after which they feel that the are paying more than the security is worth (and therefore they become SELLERS after this price).
I believe that sellers and buyers would change their prices in a logarithmic function -- changing their prices rapidly while they are far from the critical price, and only offering small changes while they get close to the critical price.
Hopefully, without too much loss, we can generalize this to the greater market level -- and assume that all buyers and sellers agree upon a 'critical' level for each side of the trade. Define the critical level for sellers as 0. Define the critical level for buyers as infinity.
I have been trying to derive a model that would accurately represent this concept ... and the best I can do would be a ball, placed upon an angled slope.
The angle of the slope would be the liquidity in the market. When the slope is vertical, there are no buyers -- and the price drops without any force against it (where gravity is no longer a constant, but now rather a logarithmic function that takes distance from the critical level as input).
When there are no sellers, the slope is horizontal...and buyers easily apply force to the ball without resistance (assume there is no friction)...where the force they apply is defined as 'f=ma' where mass is the volume and a is the value returned by the logarithmic function f -- which can be estimated as the rate of change of bid prices...
After this, the concept gets a bit fuzzy. The idea is that the current mass of the ball is the volume of shares that are willing to be sold at any given price level (which makes mass a function...strange, I know...) ... but this sort of also crosses over (double counts?) with the fact that the angle of the slope is defined by the current liquidity -- so we seem to be using potential sellers and buyers twice...
And here I sort of get lost in my own notebook scribblings (I am pretty sure there is some drool on the paper where I fell asleep...) ... but I think the concept gets sort of lost...
Thoughts? Ramifications? Ideas? Am I a lunatic? How can this concept be better fixed?
A couple of thoughts:
First, if no buyers exists, each individual seller will continue to lower their price until they reach their own personal 'critical level', after which they feel that they are losing opportunity by selling (and therefore feel that any sale UNDER that price is a potential buy).
If no sellers exist, each individual buyer will raise their bid to entice sellers until they reach their own personal critical price level, after which they feel that the are paying more than the security is worth (and therefore they become SELLERS after this price).
I believe that sellers and buyers would change their prices in a logarithmic function -- changing their prices rapidly while they are far from the critical price, and only offering small changes while they get close to the critical price.
Hopefully, without too much loss, we can generalize this to the greater market level -- and assume that all buyers and sellers agree upon a 'critical' level for each side of the trade. Define the critical level for sellers as 0. Define the critical level for buyers as infinity.
I have been trying to derive a model that would accurately represent this concept ... and the best I can do would be a ball, placed upon an angled slope.
The angle of the slope would be the liquidity in the market. When the slope is vertical, there are no buyers -- and the price drops without any force against it (where gravity is no longer a constant, but now rather a logarithmic function that takes distance from the critical level as input).
When there are no sellers, the slope is horizontal...and buyers easily apply force to the ball without resistance (assume there is no friction)...where the force they apply is defined as 'f=ma' where mass is the volume and a is the value returned by the logarithmic function f -- which can be estimated as the rate of change of bid prices...
After this, the concept gets a bit fuzzy. The idea is that the current mass of the ball is the volume of shares that are willing to be sold at any given price level (which makes mass a function...strange, I know...) ... but this sort of also crosses over (double counts?) with the fact that the angle of the slope is defined by the current liquidity -- so we seem to be using potential sellers and buyers twice...
And here I sort of get lost in my own notebook scribblings (I am pretty sure there is some drool on the paper where I fell asleep...) ... but I think the concept gets sort of lost...
Thoughts? Ramifications? Ideas? Am I a lunatic? How can this concept be better fixed?
I think MAESTRO makes his point. It comes down to what works for the trader, be it a black cat, a white one or a three-legged one. As long as the performance numbers justify a method's use, who are we to judge? In any event, our livelihoods depend on a sufficient number of other people seeing the markets at least somewhat differently.
MAESTRO,
I understand what you are saying and i have consideration for anyone that is working hard to model price action and give solutions for different problems.
however, one thing is technical analysis and the other is trading. In order to trade succesfully, you need FAR MORE simple tools than what you have described in this thread.
I agree that studies are valuable when looking at the past and expressing certain market conditions and even assesing conditions in the present.
however, timing the market is pretty basic and does not require indicators as long as you understand that what you need to see is supply vs demand. swings are the expression of cycles of demand and supply and patterns are the expression of the market as a whole comprised of these cycles.
trading is innernetly human and therefore is an art more than a science....
I understand what you are saying and i have consideration for anyone that is working hard to model price action and give solutions for different problems.
however, one thing is technical analysis and the other is trading. In order to trade succesfully, you need FAR MORE simple tools than what you have described in this thread.
I agree that studies are valuable when looking at the past and expressing certain market conditions and even assesing conditions in the present.
however, timing the market is pretty basic and does not require indicators as long as you understand that what you need to see is supply vs demand. swings are the expression of cycles of demand and supply and patterns are the expression of the market as a whole comprised of these cycles.
trading is innernetly human and therefore is an art more than a science....