Can you explain the model a little more?
Thanks,
-Kastro
Thanks,
-Kastro
Physics and Trading? Hmmâ¦â¦.
- Thread starter FutTrd
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For anyone interested, apparently there is an informative book to read regarding the Chaos theory in the market place.
Haven't read it myself but here is a comment from someone who has:
"This book is titled The Predictors by Thomas A. Bass. It is the story of a group of scientists and mathematicians who developed Chaos Theory for the financial markets beginning in August 1991 in Santa Fe, New Mexico. In this book it states that Chaos Theory is 10,000 times more accurate than any other form of mathematical prediction ever applied to the markets. Further, the book goes on to state that chaos theory, "when applied to market data the new technology produces substantial returns and there is less than a one in ten thousand chance that the models are wrong."
Kami
Haven't read it myself but here is a comment from someone who has:
"This book is titled The Predictors by Thomas A. Bass. It is the story of a group of scientists and mathematicians who developed Chaos Theory for the financial markets beginning in August 1991 in Santa Fe, New Mexico. In this book it states that Chaos Theory is 10,000 times more accurate than any other form of mathematical prediction ever applied to the markets. Further, the book goes on to state that chaos theory, "when applied to market data the new technology produces substantial returns and there is less than a one in ten thousand chance that the models are wrong."
Kami
I've read the book. I also saw a site that claims having developed a trading system applying the same kind of science explained in the book. The site is alela.com, they used to sell their predictions but no anymore. I've read that they have closed a deal with esignal through another company called tradingpro.com
Their claims are striking.
I believe the results are still mixed. Doyne Farmer has written a lot of interesting articles on chaos, complex adaptive systems, econophysics etc. Just search his name on google if you are interested.
You can also read Edgar PEters books (Chaos, Fractals) for introduction to the application of chaos/fractal theory to capital market. But personally, I like Tonis Vaga book better (application of physics to the capital market). It's an old early 90's book.
You can also read Edgar PEters books (Chaos, Fractals) for introduction to the application of chaos/fractal theory to capital market. But personally, I like Tonis Vaga book better (application of physics to the capital market). It's an old early 90's book.
These are the guys who built shoe computers to predict the probability of landing in a sector at roulette.
They used their toes (and lots of practice) to enter the position when the ball was released. They had to enter data, get results, and place their bets before the dealer said "no more bets." Primitive CPUs of the era (8080-85, Z-80?) and faulty hardware design and construction (they could have used an Electrical Engineer!
) made the results mixed, but it sure was an interesting and bold effort.Crazy guys...
Thanks everyone for your suggestions and input...fractals and chaos in the market is quite interesting.
Someone suggested to me that I look at this article by Eric Long.
I just got it, so haven't had much of a an opportunity to look at it yet. Hope it's useful.
Kami
http://www.fractalfinancecubed.com/user/Making Sense of Fractals by Erik Long.pdf
Someone suggested to me that I look at this article by Eric Long.
I just got it, so haven't had much of a an opportunity to look at it yet. Hope it's useful.
Kami
http://www.fractalfinancecubed.com/user/Making Sense of Fractals by Erik Long.pdf
A physicist should have little problem with quantative analysis, but F=MA has zero relevance to stock movement.
Your friend's analogy of the water droplet is an elegant one. Like predicting the movement of water by gauging wind resistance, imperfections in the surface, hydrodynamics, the curvature of the windshield, etc, ... one should be able to "predict" stock price movement by its external forces.
physics is a hell of alot more of an exact a science though ... people, and therefore markets, can act irrationally, that is to say people are crazy. A body in motion, isn't effected by its feelings of fear or greed.
Your friend's analogy of the water droplet is an elegant one. Like predicting the movement of water by gauging wind resistance, imperfections in the surface, hydrodynamics, the curvature of the windshield, etc, ... one should be able to "predict" stock price movement by its external forces.
physics is a hell of alot more of an exact a science though ... people, and therefore markets, can act irrationally, that is to say people are crazy. A body in motion, isn't effected by its feelings of fear or greed.
and if you replace feelings by speed and greed by acceleration ? mmmmhhhhh....
uncertainty on FDI is missing on the oil trend plot...