Random Chart Contest: RESULTS!

[candletrader]

Darn, I missed the contest

 

[jmcgraw]

Quote from candletrader:

Darn, I missed the contest

Dont worry, I think we will have another one in the future. But first, I would like to do some research to make it as true a random walk as possible. I would also like to use much larger histories, but this is going to take some work in picking the true histories so that they arent obvious. (If you looked at a 10 year history of your average stock, most traders would know that it is real; simply because they remember the general patterns of the markets over long periods)

 

[candletrader]

Quote from jmcgraw:



Dont worry, I think we will have another one in the future. But first, I would like to do some research to make it as true a random walk as possible. I would also like to use much larger histories, but this is going to take some work in picking the true histories so that they arent obvious. (If you looked at a 10 year history of your average stock, most traders would know that it is real; simply because they remember the general patterns of the markets over long periods)

Great! I am looking forward to it...

 

[Gordon Gekko]

Quote from jmcgraw:

Hello everyone,

It is time to announce the answers for the random chart contest held this past week. (I know, I am a little later than I promised) The original thread is located here for your reference:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=11578&perpage=6&pagenumber=1

The Charts

Here is the breakdown of the real and random charts:

Chart#1 – Random
Chart#2 – Random
Chart#3 – Motorola (MOT) April 1993 to May 1994
Chart#4 – 3M, Minnesota Mining and Manufacturing (MMM) April 1992 to July 1993
Chart#5 – Autodesk (ADSK) July 1990 to September 1991
Chart#6 – Random
Chart#7 – Random
Chart#8 – Johnson & Johnson (JNJ) February 1993 to June 1994
Chart#9 – Dow Jones Industrial Average (DJ-30/DJIA) June 1984 to August 1985
Chart#10 – Random


Like I promised (even though I have the feeling some of you doubted ) there was no trickery involved. You can check the real charts for yourself.

Average Performance

Here is the average number correct among all participants for each chart:

Chart#1 – 62.50%
Chart#2 – 50.00%
Chart#3 – 68.75%
Chart#4 – 62.50%
Chart#5 – 68.75%
Chart#6 – 81.25%
Chart#7 – 50.00%
Chart#8 – 68.75%
Chart#9 – 75.00%
Chart#10 – 62.50%

It seems that there was something obvious about chart #6 that made it very easy to see that it was random. It also seems that the DJIA was the easiest real chart to pick out. (as I suspected it would be) On average the participants chose more correctly than incorrectly. Whether this is due to the skill of the participants or to the fact that my charts were not a perfect representation of randomness I do not know. (I used a crude method for creating the charts, had I known about brownian motion at the time I would have tried to use it for the generation of the charts. As dottom pointed out my charts are more representative of a “drunkards walk” than a true random walk)

Participant Rankings

Now for the ranking of participants:

Quiet1 was the only participant to get 100% correct, here are the rankings for all the participants:

1. Quiet1—10 Correct
   Analysis Method: n/a
   Years of Experience: 4
   
   [*]Gordon Gekko—9 Correct
   Analysis Method: eye
   Years of Experience: 4
   
2. JPB—9 Correct
   Analysis Method: eye
   Years of Experience: 4
   
3. alain—9 Correct
   Analysis Method: eye
   Years of Experience: 6
   
4. Glitch—9 Correct
   Analysis Method: eye
   Years of Experience: n/a
   
5. Traden4Alpha—8 Correct
   Analysis Method: autocorrelation study of H-L range
   Years of Experience: n/a
   
6. MondoTrader—8 Correct
   Analysis Method: eye
   Years of Experience: n/a
   
7. maxpi—7 Correct
   Analysis Method: n/a
   Years of Experience: 3
   
8. marketsurfer—6 Correct
   Analysis Method: N/A
   Years of Experience: 12
   
9. acrary—6 Correct
   Analysis Method: eye
   Years of Experience: 14
   
10. GreenTea—6 Correct
    Analysis Method: eye
    Years of Experience: 0.5
    
11. dottom—5 Correct
    Analysis Method: Digital Signal Processing
    Years of Experience: n/a
    
12. Tsaimoto—5 Correct
    Analysis Method: eye
    Years of Experience: 6
    
13. daytr8r—4 Correct
    Analysis Method: n/a
    Years of Experience: 7
    
14. bobcathy1—2 Correct
    Analysis Method: n/a
    Years of Experience: n/a
    
    [*]macal425—1 Correct
    Analysis Method: n/a
    Years of Experience: n/a
    [/list=1]
    
    Final Thoughts
    
    Well I think this was a fun exercise. I hope it proved to be educational or at least amusing to everyone who participated.
    
    If anyone has any thoughts or comments, lets hear them!
    
    If there is enough interest maybe we can do a contest like this again in the future, only a bit more realistically. I will be doing some research on Brownian motion and random walk simulation (I'm not trained in mathematics, so I don't absorb this kind of stuff very quickly ) in order to try and put together a more realistic simulation. If anyone has any suggestions or comments please let me know.
    
    Regards,
    John

1. 
   NOTE: macal425 DELIBERATELY FADED ME!! LOOK WHERE HE ENDED UP!!! LAST PLACE!!!!
   

   Quote from macal425:
   
   
   
   In that case I will say:
   
   1) real
   2) real
   3) random
   4) random
   5) random
   6) real
   7) real
   8) real
   9) random
   10) real
   
   Experience: only about 2-3 years, but enough to know to fade GG.
   

   OUCH!!!