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Higher Edge within a Single Candlestick

  • #1,021
  • Oct 5, 2017 1:09am Oct 5, 2017 1:09am
Quoting jimsterk
{quote} Interesting experiment. I randomly created 100000 candlesticks to check its validity.
After almost 3 years here at FF, finally, found something really GOOD!

This is the best post I have seen, with scientific data, showing, markets ARE NOT RANDOM!

Of course , everything just follows a SIMPLE, but ingenius logic! What do you expect? A chaos to be the core engine of the application that moves the prices/markets up or down? Are you completely out of your mind? Hello?

Not surprisingly, again, almost nobody noticed this superb jewel...

I also have seen total hacks. Hacks, that can force the market makers to entirely forbid hedging and get back to midevil times of spread of 10-20 pips, at least. Here at FF. Being binned...

It seems to me, people who read here can't tell, if something is a shit or a burger? Might be just a shit-burger?
Maadik Hugiis. IQ 69.
  • #1,022
  • Oct 5, 2017 1:11am Oct 5, 2017 1:11am
Quoting jimsterk
{quote} Interesting experiment. I randomly created 100000 candlesticks to check its validity. Here is my R code. Hope my code is correct. myfun <- function(n, n_ran){ u_wicks <- bodys <- l_wicks <- numeric(n) for (i in 1:n){ candle <- cumsum(rnorm(n_ran)) open <- candle[1] close <- candle[n_ran] high <- max(candle) low <- min(candle) co <- close - open if (co>0){ u_wick <- high - close ; l_wick <- open - low }else{ u_wick <- high - open ; l_wick <- close - low } body <- abs(co) range <- high - low u_wicks <- u_wick/range bodys <- body/range...
No, thank YOU.
Market data and random data, same result.
I wonder what this means ... hmmm
Perhaps the market IS (almost perfectly) random ?
  • #1,023
  • Oct 5, 2017 1:13am Oct 5, 2017 1:13am
Quoting MoneyZilla
{quote} After almost 3 years here at FF, finally, found something really GOOD! This is the best post I have seen, with scientific data, showing, markets ARE NOT RANDOM! Of course , everything just follows a SIMPLE, but ingenius logic! What do you expect? A chaos to be the core engine of the application that moves the prices/markets up or down? Are you completely out of your mind? Hello? Not surprisingly, again, almost nobody noticed this superb jewel... I also have seen total hacks. Hacks, that...
hmmm dude, it shows the opposite.
unless you are being sarcastic ...
  • #1,024
  • Oct 5, 2017 1:28am Oct 5, 2017 1:28am
Quoting Mingary
{quote} No, thank YOU. Market data and random data, same result. I wonder what this means ... hmmm Perhaps the market IS (almost perfectly) random ?
More precisely, this means that ohlc ratios are the same as generated by random process. This is not unexpected, because open and close are “snapshots” at particular discrete time (so overall random). The statement is similar to “there are all kinds of candlesticks“.
It is not in disagreement with a random market, but it does not really prove it.
k
  • #1,025
  • Oct 5, 2017 1:30am Oct 5, 2017 1:30am
Quoting Copernicus
You sure taught those guys on that forum a lesson who thought roulette was an unbeatable random system.
I think most of us haven't thought that it was unbeatable. However, we just used CP's statement and checked it in a scientific way. It is obvious that the method will work if the roulette is biased. However, how much is a roulette table biased in reality, especially since all casino owners know the study of Thorp?! Surely, on rare instances you may find a roulette table that can give you an edge. But most roulette wheels are maintained on a short regulary basis.

Let's repeat the experiment. This time you have a > 2 % higher chance of getting black instead of red (P(red) = 0.4769289, P(Zero) = 0.02658463, P(black) = 0.4964865). Even then the average outcome is negative.

Even in the case of a 2 % edge CP would have lost in the long run. Mabye he really was lucky and found a roulette table with an even higher edge. However, these cases should be very rare. We are not here to believe everything - we are here to check facts and to draw conclusions.
  • #1,026
  • Oct 5, 2017 1:39am Oct 5, 2017 1:39am
Quoting kprsa
{quote} More precisely, this means that ohlc ratios are the same as generated by random process. This is not unexpected, because open and close are “snapshots” at particular discrete time (so overall random). The statement is similar to “there are all kinds of candlesticks“. It is not in disagreement with a random market, but it does not really prove it. k
This was just one "recipe" among many ...
No matter what comparison you try. Market Data behaves almost identically to Random Data.
  • #1,027
  • Oct 5, 2017 1:47am Oct 5, 2017 1:47am
Quoting RondaRousey
{quote} It shows the market can be both random and non random at different times and at the same time. And you still don't know how to trade it, you flawed human.
Good luck finding the "non random at different times" consistently ..
It's RANDOM, no one can predict if / when there will be some NON RANDOM elements in the time series.

If the lottery is a tax on those who are bad at math
Playing the market is a tax on those who are bad at statistics.

"you still don't know how to trade it", I am pretty sure that means that YOU don't .. (:
  • #1,028
  • Oct 5, 2017 1:53am Oct 5, 2017 1:53am
Quoting Mingary
{quote} Good luck finding the "non random at different times" consistently .. It's RANDOM, no one can predict if / when there will be some NON RANDOM elements in the time series. If the lottery is a tax on those who are bad at math Playing the market is a tax on those who are bad at statistics. "you still don't know how to trade it", I am pretty sure that means that YOU don't .. (:
Every first friday of the month, there is a NFP report.....I would say, that is a prity big non random event in time series.
The biggest risk is not taking a risk.
  • #1,029
  • Edited 2:10am Oct 5, 2017 1:55am | Edited 2:10am
Quoting AntiCre
{quote} I think most of us haven't thought that it was unbeatable. However, we just used CP's statement and checked it in a scientific way. It is obvious that the method will work if the roulette is biased. However, how much is a roulette table biased in reality, especially since all casino owners know the study of Thorp?! Surely, on rare instances you may find a roulette table that can give you an edge. But most roulette wheels are maintained on a short regulary basis. Let's repeat the experiment. This time you have a > 2 % higher chance of getting...
Yep you need to understand how the bias was calculated and for that you need to read his book. To save you some time in your reading it was not a bias detected over multiple days where casinos were able to recalibrate the biases but based on a bias detected while at the roulette table itself over a single session with computer assistance. The number of roulette spins applied during a single session of play was sufficient to determine that a bias existed. In fact as Thorp maintained there is a bias detectable in every roulette table....but what was the obstacle for them was to derive that bias using as large a sample size as they could obtain within sufficient time before their cunning was detected by the casino operators. This therefore meant that they could only apply their program to select tables that provided that opportunity of undisturbed data collection.

Just applying assumptions from probability theory is not going to get your answer, you need to apply equations of angular momentum, linear momentum, friction and drag, wheel tilt etc. to arrive at final resting place within defined confidence interval limits. In other words, models applied to the actual processes involved in the outcome as opposed to theoretical models of probability distributions grounded in floored assumptions that predict the outcome itself.
  • #1,030
  • Oct 5, 2017 2:01am Oct 5, 2017 2:01am
Quoting Copernicus
{quote} Yep you need to understand how the bias was calculated and for that you need to read his book. To save you some time in your reading it was not a bias detected over multiple days where casinos were able to recalibrate the biases but based on a bias detected while at the roulette table itself over a single session with computer assistance. The number of roulette spins applied during a single session of play was sufficient to determine that a bias existed. In fact as Thorp maintained there is a bias detectable in every roulette table....but...
The use of phones is allowed in some jurisdiction including mine. Don't we foresee the growth of phone usage ?
  • #1,031
  • Oct 5, 2017 2:24am Oct 5, 2017 2:24am
Quoting skyway
{quote} The use of phones is allowed in some jurisdiction including mine. Don't we foresee the growth of phone usage ?
I think so. The real game at the casino is your ability to attempt to keep ahead of them in the game of deception.

Here is the old way with an IBM mainframe tucked into your shirt. :-)

Attached Image
  • #1,032
  • Oct 5, 2017 2:29am Oct 5, 2017 2:29am
Quoting Mingary
{quote} hmmm dude, it shows the opposite. unless you are being sarcastic ...
I am not sarcastic. I am measuring up to 0.1 pip grids. Might be a little too much? Maybe my tools are also imperfect for going that deep? Whatever.

Nothing is random. You can call a sequence being random, because it is UNPREDICTABLE, but at the end, it will lead to almost perfect balance of the buys and the sells being counted. The perfect balance of zero... This, cannot be random. It has being manipulated to come down to zero. Zero is their gravity point or just ground zero...

Maybe you just read what this post shows, as data, the wrong way, I believe?!?

p.s. I am not attacking you, so, do not start a fight with me. Just trying to help you, cause you need help.
Maadik Hugiis. IQ 69.
  • #1,033
  • Oct 5, 2017 2:39am Oct 5, 2017 2:39am
I am not saying it's not possible to make a pip or two on occasion..
I am saying that very few understand the playing field they are on ..
  • #1,034
  • Oct 5, 2017 2:44am Oct 5, 2017 2:44am
Quoting RondaRousey
{quote} Some truths that you wrote. Non random events occur randomly so there is no point predicting, you'll just get it wrong over time just like your trading. Random events occur non randomly so there is no point predicting, you'll just get it wrong over time just like your trading.
Tell me something I don't know (:
But certainly you know about "assuming" ?
  • #1,035
  • Oct 5, 2017 2:46am Oct 5, 2017 2:46am
Quoting Mingary
{quote} No, thank YOU. Market data and random data, same result. I wonder what this means ... hmmm Perhaps the market IS (almost perfectly) random ?
the difference is that there is actual flow data related to orders on a random market price chart where as on a simple random series of meaningless data there is non

you are not wrong the market is perfectly random by sight and nature, however it also perfectly tradeable.

I guess you could say, the market has a purpose where as a random data series does not. I could not trade a random data series because it is not driven to any goal.
Time hides Nothing
  • #1,036
  • Oct 5, 2017 2:57am Oct 5, 2017 2:57am
Quoting CindyXXXX
{quote} the difference is that there is actual flow data related to orders on a random market price chart where as on a simple random series of meaningless data there is non you are not wrong the market is perfectly random by sight and nature, however it also perfectly tradeable. I guess you could say, the market has a purpose where as a random data series does not. I could not trade a random data series because it is not driven to any goal.
Random data is also appears driven on occasion...

The "goal or purpose" is not real, but hindsight is always 20/20
Using the rhetorical "you"
The price moves 50 pips, You imagine some TA or some fundamental issue at play. You impose your idea on the move as a rational. The goal is in your head.

The random data has a 50 point move ... same thing

However, both are tradable (:
  • #1,037
  • Oct 5, 2017 3:16am Oct 5, 2017 3:16am
Quoting change
{quote} Hi skfx, as always some food for toughts from you (but all thread is a very good one) In other posts you say retail traders have nearly no chance looking at price only but now you say something little different or am i misinterpreting your words? Anyway you gave me something to start thinking about, thank you {image}
looks like each trading session tries to test the previous trading session...
  • #1,038
  • Oct 5, 2017 3:24am Oct 5, 2017 3:24am
The market is random in a sense that we can't predict where the price will be even in a short future, let alone some distance away ...
Yet the current market behaviors (price actions) can tell us where the market "tends" to go in a short future provided certain conditions are met, although we still can't predict how far it would go ... This is a "bias" we can take advantage of ...
Market is not random but unpredictable
  • #1,039
  • Oct 5, 2017 3:37am Oct 5, 2017 3:37am
Quoting Copernicus
{quote} Good to see another forumite with a strong sense of the rhythm :-) However forgive me Pip as I need to use your post as a springboard for a rant....which is not directed at you. It is directed at those 'monkeys' out there that do not attempt to understand what they are doing and blithely make glib one liner statements with no backup that amount to 'zilch'...and do not contribute to discussion. As a drummer you will recognise that the outcome (the rhythm) is a result of a process. What most don't recognise is that everything in our classical...
That's right.
Therefore matter is crystalized energy, energy creates matter: so what should you focus on?
  • #1,040
  • Oct 5, 2017 3:49am Oct 5, 2017 3:49am
Quoting AntiCre
{quote} I think most of us haven't thought that it was unbeatable. However, we just used CP's statement and checked it in a scientific way. It is obvious that the method will work if the roulette is biased.
We just showed that the long sequence of n random steps, if it is to end above the reference line will look like a “up” candlestick with an open value of 0 (ref line), close value of sqrt(2 n /pi) and an expected high value of sqrt( pi n/2)... So I am actually quite convinced it is beatable - it wouldn’t be in case of a doji i.e., if we wouldn’t buy above the line and sell below it. CP is right imho.

k
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