Do you see patterns in Random Walks?

Quote from kut2k2:

I just gave a serious answer to a serious question. Now tell me, why does that upset you so? Do you feel relieved now? Oh, good! :D
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Yes, you are right of course. I am sorry. It's a touchy subject for me. My real motivations are not Just "money" and "glory" and I do not envy any other "hard-core" scientists. To me this type of human activities is the most fascinating laboratory that has more readily available data than any other field of science. As a Mathematical Psychologist I can assure you that it is the only area of human behaviour that excites me and allows me to experiment at the scale that I could have never imagined before. The ability to apply the most radical notions and models of human behaviour and see instantly whether they work or not is an incredible advantage that any scientist should envy!
 
Quote from intradaybill:

how can something be random and not random? The answer is simple: knoweldge makes things deterministic and lack of it random. It is so simple. Learn it before it escapes you.
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If you are prepared to listen and keep your mind open I will be prepared to explain and even illustrate. However, if your mind has been hard coded with this notion there is no way for me to convince you. I can only upgrade the "software" not the "firmware". Please understand that I have spent considerable number of years and have explored numerous theories and as a result I have come up with my own model of this psychological phenomenon. Whether you will be able to accept it or not does not change my beliefs, however it could prevent you from learning.
 
Quote from intradaybill:

Only people with a very superficial knowledge of quantum mechanics through popular science books think it is a theory involving randomness. Quantum Mechanics is a deterministic theory. The evolution of the wave function is precisely known given the initial conditions.

Tonight, some big fund is maybe orchestrating a huge buy or a sell. Tomorrow, not knowing their actions in advance, you will call the market movement random. But to them it was not random. Ask MAESTRO this question to yourself: how can something be random and not random? The answer is simple: knoweldge makes things deterministic and lack of it random. It is so simple. Learn it before it escapes you.
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I disagree with your understanding of quantum mechanics as deterministic, but that's another (worthwhile) discussion. I get the impression that you believe there's a real world out there that our language is able to "touch", which confers truth properties to our statements. I do, though, agree with your second paragraph, which is the point of contention on the table.

In other words, I believe quantum mechanics is not deterministic but markets are. You believe both are deterministic and Maestro believes both are fundamentally random, at least on a certain scale.

I remain open to argumentation that would change my mind as I find it a fascinating topic, but recognize I'll never really be fully informed enough as a lay person to be satisfied.

So, I do envy you, Maestro, for being able to mix the intellectual stimulation of pure science with profit. Unless of course it's true that it's all smoke and mirrors that obscures negative externalities :D
 
Quote from Samsara:

I disagree with your understanding of quantum mechanics as deterministic, but that's another (worthwhile) discussion. I get the impression that you believe there's a real world out there that our language is able to "touch", which confers truth properties to our statements. I do, though, agree with your second paragraph, which is the point of contention on the table.

In other words, I believe quantum mechanics is not deterministic but markets are. You believe both are deterministic and Maestro believes both are fundamentally random, at least on a certain scale.

I remain open to argumentation that would change my mind as I find it a fascinating topic, but recognize I'll never really be fully informed enough as a lay person to be satisfied.

So, I do envy you, Maestro, for being able to mix the intellectual stimulation of pure science with profit. Unless of course it's true that it's all smoke and mirrors that obscures negative externalities :D
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Yes, I fundamentally believe that at the heart of quantum mechanics, psychology, medicine, biology and thousands of other natural phenomena rests the "Galton Box" type of a process. I also would like to mention that the subject of this discussion does not directly relate to any "profit". In this forum I try to spark only theoretical discussions that stimulate my interest and hopefully present some food for thought to others. As for my financial success, it deeply correlates with success of my company that I have built from scratch along with my partners in the past 12 years. And, of course, I eternally grateful to all the members of my company for letting me play and experiment as much as I have done during all of these years. Tthe fact that the company is doing well and all of my partners are still with me is the only true measure of my success.
 
Quote from underwater:

I am ready to get my software upgrade now, please insert girder!
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We shall continue tomorrow. Tonight I still have to go through lots of reading and watch my favorite show - "The Big Bang Theory" :)
 
Quote from MAESTRO:

Yes, I fundamentally believe that at the heart of quantum mechanics, psychology, medicine, biology and thousands of other natural phenomena rests the "Galton Box" type of a process. I also would like to mention that the subject of this discussion does not directly relate to any "profit". In this forum I try to spark only theoretical discussions that stimulate my interest and hopefully present some food for thought to others. As for my financial success, it deeply correlates with success of my company that I have built from scratch along with my partners in the past 12 years. And, of course, I eternally grateful to all the members of my company for letting me play and experiment as much as I have done during all of these years. Tthe fact that the company is doing well and all of my partners are still with me is the only true measure of my success.
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Understood in full. I certainly do not mean to offend in my skepticism for the industry and the hubris of its players as a whole. Despite my apparent recent alias, I've actually been around for a while and know the sweat equity you've built up and earned, and that you're nothing like the fly-by-night quants I've experienced.

Besides that, you're providing an informed, even-headed dialog on a subject I find quite fascinating but could never contribute to, so I appreciate your willingness to discuss. It's quite edifying and a rarity for ET. So please don't take my occasional populist tone personally.
 
Quote from intradaybill:

The answer is simple: knoweldge makes things deterministic and lack of it random. It is so simple. Learn it before it escapes you.
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After tracking down terrorists for the FBI, developing statistical models for the financial markets, and predicting weather and analysing intelligence data for the military, I have to agree completely with Intradaybill. The systems I mentioned are often thought to be "random" systems, but that is entirely based on 1. perspective of the viewer, 2. awareness of one or multiple points of interralated data and 3. an ability to isolate the relationships shared by the data points.

However, this point should not be confused with the fact that often times, these relationships, due to lack of clarity concerning one or more of the above mentioned characteristics, are far too difficult to ascertain and therefore must be approached in a dynamic, careful manner as if they were random to some degree, even though they are not. Developing patterns of thought based on realistic probabilities, rather than rigid, absolute opinions, with the understanding that they will need to be further modified as new feedback is presented from the corresponding system is often the most prudent remedy.

NOTHING in this world is random.
 
I don't know, the only apparently non-random process I can think of is my simple function in my program. I know the 2 or 3 inputs, I can check they are inputs I like, I know all 5 steps in the process, and the output is 100% predictable over many instances.
Extrapolate this to the real world, I suppose if I knew all the inputs, their weighting, and all the steps in the process, I'd be able to predict the outcome very precisely. However, I suppose any process in the real world has an infinite (or at least larger than I can account for) number of inputs, from my size to infinitely big to infinitely small. The inputs change across instances. And the function has an infinite number of steps -- each step has a smaller, nested step, or there is a step I never thought of, or calls a step from an infinite number of steps for that particular line and that particular instance. So, the output is difficult to predict and varies a lot over many instance. As the inputs and steps are infinite, it's impossible to know and account for all of them.
One drag about getting to infinity -- when you get there and look around, you see that what you just crossed is infinitely small and there is still another infinity to go :eek:
 
Quote from MAESTRO:

This would be a good start:

http://online.redwoods.cc.ca.us/instruct/darnold/laproj/fall98/skymeg/proj.pdf

Cheers,
MAESTRO
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Sorry for the super-basic question, and thanks for your patience: is the flock's "center of gravity" the data points to which the spline is fit, or floating in space in the middle of of the curve as it moves from one data point (to which the spline is fit) to the next, as a type of "strange attractor"?

thanks for the interesting material to study
 
Quote from MAESTRO:

Yes, you are right of course. I am sorry. It's a touchy subject for me. My real motivations are not Just "money" and "glory" and I do not envy any other "hard-core" scientists. To me this type of human activities is the most fascinating laboratory that has more readily available data than any other field of science. As a Mathematical Psychologist I can assure you that it is the only area of human behaviour that excites me and allows me to experiment at the scale that I could have never imagined before. The ability to apply the most radical notions and models of human behaviour and see instantly whether they work or not is an incredible advantage that any scientist should envy!
More...
Having reread my post, I apologize that it came across as a slam at all social sciences. I have a thing about economystics as you undoubtedly can tell, but I do respect psychology, sociology and other social sciences as real sciences. I should have spoken of "Nobel-prize envy" rather than "science envy." I see a lot of what economystics have done and spoken about as an abdication of their duty to be objective and honest in their research and reports.
 
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