Quote from Jerry030:
Thank you for your thoughts. I cited indicators as a way to simplify the example, however they have serious limitations:
1) Most were conceived and designed decades ago long before our current computational and data environment.
2) They were designed to simplify market conditions for human interpretation and decision making...to dump down the market into a single number and a simple rule.
For analytics and prediction the mathematical components used to calculate the typical TI work much better than the indicators themselves. And dispensing with these there are much better ways to capture current market characteristics that have future predictive capacity such as Landmark.
Your query had a lot of definition and showed a lot of thought.
I am an example from that era you mention that had contributions to facilitate what people were doing.
Market characteristics are just a few steps away from how markets operate.
The market cycle manifests at some point as a consequence of examining the principles that create the description of a market as a system. What came to me from these people who did the item 1 and 2, above was that I could create tools for dealing with the Present and the future coming into the Present.
I turned to Information Theory I found out later. A great transition has been going on over the years and technology is developed in support of efficiency and effectiveness.
One line in the sand I crossed was not getting involved in prediction. I guess MACD was an example. The designer designated values to specify an ongoing market sentiment. It was simply a go/no go guage. MACD was named appropriately too.
What allows a person to not get involved in prediction? My approach was keeping track of surrent events. By that I mean keeping current on the status of the market movement through its cycles. Most people substitute prediction instead.
It was very interesting to see the advent of technological capabilities. They did focus on data processing usually for pragmatic purposes. The ticker tape and chalk dropped out of the picture at some point. Storage of data followed.
Trading was very offensive to some classes of people. Keeping my counsel was an issue in some ways. I was considered a "cheater" and how I cheated was created as a mystery by others.
Today, many people do "mine" for things that will be helpful. I stilll choose to use Information Theory as the basis for front running the market's offer. Boolean logic allows me to work in the non probabilistic fork of of Information Theory.
I do keep current on the literature of the contemporary prefernces of those who purchase talent and processing packages. It is almost entirely connected to probabilistic Information Theory except where dealing with facts is involved; that is precision data processing and not "prediction".
The era of intelinking electronics and mechanical sysems was an exciting one. I liked working in the rader and missile venu when I was in college during summertime. It was before digital systems took hold; then analog was predominent. It seemed that the math chosen had to do with problem solving.
Trading today by most systems oriented people is a common feedback systems approach to keep iteratively refining a construct. The construct is more about trading than how the market works, however. Few packages run parallel systems, however.
Having parallel systems is a necessity for me. Both are logic based in the non probabilistic sector of Information Theory.
The market is so much slower than radar based defense systems but in a way there is a lot of emphasis on speed and rep rates.
Monday was a really good example of a critically damped system through bar 46 (5 min). It was like taking a huge system up to speed and achieving a balance in the dynamic. My guess is that a lot of people did not know this. Today, was underdamped.....lol.... Late in the day the DOM was running well over 15K on each side...lol..
