Feel free to share any 'fractal nature of stock market' educational resources in this thread...
Fractal nature of stock market...
- Thread starter gettinglucky
- Start date
businessstaxes
Guest
The HFT are the new market makers.
I'm not an expert but something like wavelet scaling or wavelet multi-scale decomposition might be what you're looking for.
http://www.google.com/search?q=fractal+wavelet+scaling+decomposition+stock+market
http://www.google.com/search?q=fractal+wavelet+scaling+decomposition+stock+market
The markets contain a random component. Markets can be modeled as trend plus noise, where the noise is random. Whether or not you can use the noise to make money is an entirely different question. In many cases you're better off using the deterministic component to trade. Under certain conditions you're better off using the noise/randomness to your advantage.
Also consider regime switching and seasonality, so the actual model would be trend + current regime + noise. Determining whether any of these components is best modeled as fractal or not is left as an exercise for the reader.
Under certain conditions you're better off using the noise/randomness to your advantage
if it is noise as far as you can tell then by definition you can not use it
and sir Gordon Deco to say the market is fractal does not mean saying it is random
not going to explain this shit read up
if it is noise as far as you can tell then by definition you can not use it
and sir Gordon Deco to say the market is fractal does not mean saying it is random
not going to explain this shit read up
AD,
Not meant to you, but because Sir
aside - I wish MTT would post more
RN
http://www.elitetrader.com/vb/showthread.php?s=&threadid=22501
yes, quite true. The hurst exponent but be exactly 1/2 in order for the fractal description to imply randomness. Many times it is not.
In any event it is easy to see that the pure fractal model breaks down for markets. Just open up a tick chart and you can see that scale invariance is not held.