Quote from Hombre:
That is IMO the key to all. Would you give an example or better yet explain in depth ?
Thanks
I used to tutor Juilliard students in compostion and orchestration (Greenwich, Conn in the 60's).
Introducing math analysis into why things are the way they are in music is a thing that affords depth of understanding.
The markets parallel music in the same manner.
Intruments are made taking into account their performance with other instruments. Often sacrifices are made to the extent that instuments do do survive the musical tests of time.
A Strad substitute can be constructed once there is an understanding of what is going on. To shift the frequency range and accomplish the same result for a double bass, you have an instrument that is difficult to manage since it is so large compared to the operator.
Markets are complex as is the oboe (a double reed feeding an variable air column). The fundamental is not the dominant as a consequence.
Tokyo as we see omitted the market fundamental and clustered frequencies instead of doing the natural thing.
Orchestras compromise to play in frequencies in the range in which we hear. Why don't we have sound generators in orchestras for the sum and difference frequencies for sounds that we could then hear. Why in our culture do we have notes and scales in lieu of continuums?
Go to switzerland and spend an evening in a village at the beginning of winter when, annually, the evils are exorcited musically with paraded instruments from the dark ages.
Birds fly routes where sound senerated by the wind of barimetric origins play on the geololical irregularities of surfaces. They also mind the sound from ocenaic wave and tidal actions. Dropping down 10 octaves is not a big deal and birds do it
The solid iron central core of the earth only moves faster than the surface movement a few degrees a years. this fundamental contribution to the liquid iron eddies outward from the center solid core contribute more to the magnetic harmonics in the earth field and the ionized electric field belts of the earth cycle with incedent sun's radiation and the earths daily rotation.
Polar flipping is a long term fundamental and non dominant basic frequency for these things.
Annual rotation does not dominate either in terms of the base frequency. It does cause the solid core to advance (it does not lag).
The daily frequency dominates annual rotation and polar flipping.
We also get to see the effect of a tipped axis.
Tuck ice ages into the mix as well.
Tuck in all the natural cycles: hydrologic, carbon, etc...
For markets, we get to deal with a very nice construct.
There is a difference, however.
The two things that form the picture are: our operating point and the kind of cycle involved.
Our operating frequency is very fast compared to the kinds of cycles that drive culture.
In culture, the life cycle is the type of cycle that culture enjoins. Things come and go all riding on the fundamental of cultural growth.
Needs do not change over milleniums but the delivery systems for those needs continue to be implemented by "fixes" that are not durable but have lives that are terminated by better "fixes".
So there is a foundation and within it there is a vibrance of the give and take of needs delivery systems.
Inventions like currency and financial markets become institutionalized and they serve science, technology which in turn service the production of goods and services that supply the demand of the delivery systems to meet all cultural needs.
To make money we chose to extract a stream of capital from the financial markets and currency exchanges. We deal as parasites where exchanges are many at the beginning of the pipeline that makes culture work.
Most people to not come to this place to operate. There are hundreds of ways to operate and the comparison of performance is made based upon the money velocity capital can create.
All methods of making money in this venue operate by repeated efforts. This is how we get to considering periodic functions.
We must team up (be good parasites) with the place we extract capital and operate as effectively and efficiently as possible.
Ownership, debt, protection, and interchangability are required for continuous operation of means of production. Stocks, etc compromise ownership; debt relates to money as a commodoy which has utility; commodities provide production and debt protection; and money is valued locally and to change localities requires exchange.
All repeated efforts are driven by opportunity. Opportunity must be found. Many methods and approach seemingly create opportunity. Moreso just a consciousness is being realized.
Essential elements of the cultural system are tied into its operation and effectiveness. Its ability to adequately function varies and here is where the fundamental movement resides. The veritable hugeness guarantees a natural functioning of this movement.
Over time it all gets better.
As an aside, I chose to make money primarily on overrides of moving capital from a poorer use in a given sector to a better use in that sector. The act of creating a unique delivery system has great override value. I build devices that once built require little maintenance and operating costs but they delivery overrides from the flow that goes through them. I mostly widen and speed up conveyor belts.
The base and fundamental frequency of the place where we operate as parasites is determined by the dynamic of the economic milieu the market we siphon capital out of.
A trader does not repeat his working cycle at the fundamental frequency of this carrier. By looking at the modular activities of the four elements of ownership, debt, protection, and interchangability, that ride the carrier he sees how their through put energize the dynamic of movement. For example, lagging periodic reports characterize ownership, roll overs prescribe protection, interchangability is almost continuous and appeals to arbitrage primarily. Debt is smeared all over the place in all ways.
So leveraged derivatives of indicators of quarterly reporting systems of ownership conveniently fall into a parallel relationship with a rollover system.
A low amplitude long term carrier measures the cultural health of the cultural delivery system. Reporting and rollover periodicities insure a delivery system lagging much much higher amplitude set of signals that bound our repeated enterprised.
We have the tide and the waves of the surface in place.
Values are contained within this; they are a consequence of the interactive nature of the cultural system.
Humans and their judgements have entered the picture. They operate it with knowledge, skills and experience. We are "outsiders"; we do not do this kind of "work" or "walk".
We do two things: keep track of value as reflected in price and keep track of how much activity is going on.
Quarterly change is the high amplitude variation that flows on the economic carrier.
The items of ownership (stocks) behave in relationship to collective representations (indexes) by their relative volatility (Beta). They also behave internally (EPS percentiles) and externally (RS percentile) relative to one another and in common sectors (197).
Indexes (cash) provide measures of health and commodity indexes provide protection (futures contracts are near term insurance).
We do not invest in any of these as delivery system workers (time) and owners(capital) do. We just trade them.
This is the picture of WHAT.
For making money knowing the WHAT, gets me into the ballpark
Synopsis of remaining considerations
If we work from the "opportunity" of how to deal with WHAT. We then have down the HOW and WHEN.
Before that, I think it is important to know the WHY of opportunity.
The WHY of the opportunity is where the math sources for making money come from. The channels of the market movement give you the relative frequencies of the periodic elements and relative amplitudes of the these periodic elements. The elements are not lines however. They are bands of price. And high velocity money is made by dealing with how and when to make money in these bands.
So the intermediate term is where price variation is founded. Application of capital is an issue that sneaks into the picture as well. This is where strategies come from.
