Physics and Trading? Hmm…….

Quote from Thunderdog:

I think that pure sciences such as physics have limited application to the markets. Crowds may often operate as a group, but the individuals that form them are not quite the mindless particles* that they would probably have to be in order that the laws of physics could be used to describe them with full confidence. That's my guess, anyway.

* Of course, there are some exceptions.:D

This is the error most people do. Physics can be applied because its tools are very good to predict the behavior of crowds...and not of single entities !

Economics has always used tools from physics to describe the markets (randowm walk, hamiltonian, ...), but at one moment they were blocked just because it was not possible for an economist to grasp the more advanced concepts of physics. Physicists are now doing that themselves but the evident gap of knowledge between economists and physicists makes that physicists articles are almost never accepted in the economics litterature.
 
Quote from piezoe:

It might be of interest to know that financial institutions are one of the main sources of jobs for newly minted Ph.D. Physicists.

I think about 25% go to education, 25% to consulting, 25% to business in general (including finance and management) and 25% stay in the academic world.
 
Quote from runningman:

If you watch the water running down the windshield too closely without watching where the CAR is going, you will crash into the car in front of you and the path of the water won't matter. Risk management is of utmost importance.

I love that post !
 
if U recall R in Fluids Mechanics...
Renolds Number for dimentionless analysis
sort of searches for 97.5% of the maximum values----> where something is not so likely to go more then 2.5% of the time...well then ...there U go as an example
GL.. :)

^DJI 11,694.48 10,424.35
^NDX 1,687.15 1,396.69
^OEX 614.85 546.86
^SOXX 504.40 363.45
AAPL 76.06 43.68
ACI 54.09 26.41
ADI 35.64 24.50
AIG 66.27 54.95
ALLB 28.92 20.91
 
Quote from science_trader:

I love that post !

Risk = Arabic Term by the way
Risk = Rezg...how it's pronounced
Introduced to Italians By Arab Merchants
+ same ones Introduced Double entry and Arabic Numerials (0,1,2...9)
Simply Means Income....
Does not mean in total Taking chances...
cause Income depends on Risk and Not Visa Vera.
Sort of Like Weight Depends on Hight...and Not...etc
GL
 
The 'NATURAL LAW' says that there is 'no space and no time', trying to solve the markets via physics and mathematics is a futile exercise...............an illussion of the MATRIX!
 
"I am sorry, I made it all up

I am an awful person, but hey there is so much worse bull s**t on ET, its okay if I add some of mine

but what if I didn't make it up, okay okay lets not go into that guessing direction.

look all I know is that if this is real, it would work better in FOREX.

it makes sense that it would, forex is so much more like fluids."






No problem, although in my search for information I came across a statement that says, "Seven of the global top ten investment banks are now using Fractal Maps for risk management, trading and reporting applications."

So, if anyone has any information around that...it would be greatly appreciated.

Thanks kamisu
 
Quote from kamisu:

No problem, although in my search for information I came across a statement that says, "Seven of the global top ten investment banks are now using Fractal Maps for risk management, trading and reporting applications."

So, if anyone has any information around that...it would be greatly appreciated.

Thanks kamisu

I am familiar With Risk in terms of computations
Like Value at Risk or (from 200 years) called Mean Max and Mean Min
and Multi-asset Risk...in the same Manner as VaR = Value at risk
Not familiar with above tho
 
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