Yeah!. Basically everything else has been filler since that post.
Do you see patterns in Random Walks?
- Thread starter atlTrader666
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That is a exactly the point! Thank you so much for phrasing it so clearly! Yes, I believe that randomness is (like gravity) a fundamental property of our world that breaks all the attempts of causality. This property manifests it self in both micro and macro worlds through different related phenomena such as Spontaneous Synchronization, for example ( http://www.amazon.com/SYNC-Emerging-Science-Spontaneous-Order/dp/0786868449 ). Historically, this concept has been incredibly difficult to accept. Even Einstein had troubles accepting it. However, especially in the past decade, there were numerous advances in many fields of knowledge that supplied numerous facts in favor of this point of view. Behavioral studies is one of those fields.
Cheers,
MAESTRO
I would like respectfully disagree. If you say that the market is a "chaotic system" doesn't that imply an element of randomness? If not, let's then discuss the definitions first. We might be talking about the same things using different words. It is worth the effort to clear the definitions.
Cheers,
MAESTRO
P.S. BTW, thank you for joining the discussion!
After one learns about SS, one knows which sororities (or strip joints!) to visit and which to avoid with near perfect timing.
Thank you for bringing this up. An excellent question! I would like to illustrate a very similar phenomenon using elementary physics.
Let us assume that we are measuring the gas pressure in an enclosed container. There should be no doubt that the behavior of individual molecules of gas is pretty much random (Brownian motion based), however, the pressure measurement appears to be stable (not random at all). The reason for it, of course, is the integrated actions of billions of the molecules each one of which behaves randomly. The same picture we observe in the markets where the distribution of volume appears to be very stable and very predictable with a very low variance. It, of course does not mean that the underlying process is not random at all.
You mention before how randomness is evident in the vector of a spark that ignites a forest fire, or in the trajectory of a wave on a beach. You implied that even a computer with perfect computational speed could not model that randomness -- but why? A common sense response might be as follows:
Unlike behavior on the quantum level, where randomness is evident because a particle actually exists in two places at once, we cannot observe the superposition of a spark or a wave. It makes sense on a micro level that random quantum changes occur; on a macro level, one might assume that all of that behavior has already coalesced into the forces we consider deterministic. A billiard ball hit with the right angle and force might probabilistically bounce at x angle, even though on a quantum level randomness occurs at its boundaries. Or a fund's unexpected selling of stock might be sufficient to explain an x percent drop in price.
To me, it appears the only relationship between quantum randomness and randomness in other phenomena is due to fact that the tools and language we use to describe that randomness are the same. In the Pragmatist tradition, this is enough to fit them together as true -- because the tools of verification are all we have to make something "true", and there is way we can access the "real" world. But to someone from the common sense hard-nosed bent, that might not be sufficient.
Thoughts?
+ 100
What Antisyzygy wrote is a very deep and important fact. Many people don't understand the concept of deterministic chaos. These are systems that have no connection to randomness but to the untrained they appear so. They are very hard to model, they have virtually no observability and controlability and building linear estimators leads nowhere.
I have said already many times that randomness is part of specific philosophical interpretations of QM that assume state reductions. Other interpretations are fully deterministic. So you people should stop using the informal fallacy of appealing to QM to justify randomness. You have been told already this is not the case. Why insisting?
Certainly, this is an understandable logic. It is very similar to Einstein's conclusions as well. However, please consider the fact that you are looking at things "post-factum", on the hindsight, if you will. The price move after a fund sold or bought substantial number of shares is a retrospective causality, however, the processes that led this find to its decision to buy or sell cannot be logically (in a sense of "If- Then" statements) described. If the temperature suddenly drops and water freezes, it takes a shape that is certainly very structured and well defined (from the ice crystal stand point of view), however, the actual process of forming this shape cannot be described using linear causality.