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Multiple Time frame theory!
- Thread starter tradex1
- Start date
Quote from harrytrader:
My model is also a quantitative finance model but it really make the missing link with traditional TA it is the only deterministic model that probably exists or at least exposed today (although I do it on a narrow basis since I didn't publish it officially in a scientific or econometric journal) whereas all others are only based on stochastic approach (the above Ito lemma approach). So my model is much more understandable than a bunch of equations of so called wiener process and alike.
Yes, techinical analysis is a pure determinstic technique, although it is always advised that you should conside its consequences in the statistical sense. Modern quant finance is based on stochastic process, or specifical martigale theory, so it is good for derivative modelling, but not for the prediction of underlying equities.
Another difference is that, basically technical analysis is to do structure analysis, so pivots are very important. Quant finance, as name implies, is pure quantitative, thus any piece of data is important (anything has a statistical meaning).
If, in any way, you can synthesize these two techinques together for predicating the equity prices, sure you are the first one to bridge the gap.
That's what I said: actions precede concepts (that's why a machine can be built before concepts) but when better concepts are known they substitute to older ones sooner or later it will depend on evolution of competition: necessity is law and in trading futures where the sum of the game is null and even negative this is sure a leading motivation.
Quote from TSOKAKIS:
Many centuries before Carnot and his principle, Heron of Alexandria designed steam machines both theoretically and manually.
[for a quick review see http://www-groups.dcs.st-and.ac.uk/~history/Mathematicians/Heron.html]
Some Heron ´s principles were wrong, but, the machines were working and this is the most important.
The theoretical background is not the only way to trade [with sucess] the markets.