Quote from neophyte321:
I agree, it's a very good analogy...
You can model an apple falling to the earth far greater than stock prices. Even if the apple fell in an apparent chaotic, unpredictable manner, it still seems more likely that a model could be devised that is more accurate than a tweaked trading system.
My analogy is really about the complexity of the natural global weather system. A global weather system model is essentially a computer program with man made, man set parameters.
There will never be enough user set parameters in a computer program to duplicate the complexity of a global nature system.
Trading system, any trading system is not as complex as the global weather system.
Actually an apple falls in an predictable manner.
Newton's first law: I. Every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it.
The apple will fall in a straight line unless out side act on by outside force. Wind would cause the apple to fall off sided. Gravitation acceleration would cause the apple to fall faster and faster.
Newton's second law. The relationship between an object's mass m, its acceleration a, and the applied force F is F = ma.
The force when the apple hit the ground will be the mass of the apple times the gravitational acceleration.
Now the manner how the apply travel when it falls:
u=initial velocity
v= final velocity
a=gravitation acceleration (32ft/sec/sec or 9.8m/sec/sec)
t=time
S= displacement (how far the object travelled)
Final speed v when the apple hit the ground can be found
v=u + at
All other value can be derive from this two equations.
v=u + at
s=((u + v)/2)*t
Not really that comlicated.
