Really I do not know what to say. The gay says some things that are right and wrong in the same time.
If it was not possible to gain from markets so why all the industry exist?
If nobody can win, why the big proportion of the Forex market is speculative?
Are we all insane and crazy? (a possible option as for me)
As I remarked the market is not a function you can approximate and it is not a signal. And that is why so intelligent guys fail. Because they assume that the market is a deterministic function (signal) they can approximate and predict. And it is not.
Let consider the market as a living beast. It really wants to keep us in the game, otherwise we will loose interest and it will die.
On the other hand he needs to balance the chances and give equal chance to everybody: long term and short term investors and speculators.
The market wants to give the same chances to the highly sophisticated traders and to the most stupid ones using basic strategies (consider this ).
The only way to win is not by predicting but by managing risk, having the mentality of the professional black jack player who has gained an edge over the house by counting cards. We strive for some kind of mathematical advantage allowing us to manage the risk properly, and not for some kind of a mystic algorithmic Cristal ball.
The problem is that some players gain an edge compared to the others. I mean the high frequency algorithms. As a result the market is distorted and anomalies (singularities) tend to appear, e.g. the flash crash the last year. This is a great challenge how to bring back the market to balance.
http://www.olsenblog.com/ A nice booklet how to trade.
My hypothesis is that with the entropy indicator and fractal dimension we can observe that and to take care of this constantly because this cannot be predicted in advance.
I have talked with some professionals who think that the only way to make those models to works is by using high frequency data and trying to profit for the market micro-structure. But there the challenge is great because it is about data and market access. On the papers I see that they use weekly and daily data to train neuronets and they work on those frames (if a SMA works just fine on those frames why not a complex model wouldn't LOL).
What I can share is only empirical and far away from valid market knowledge (unfortunately).
For me the most important concept is about the fractal dimension and entropy and giving us to know if we have and edge or the house has an edge (very often count your trades multiply them by the spread and you will have an estimate of the loss in your account). All the other indicators or systems you can change at will. Goerzel, SSA cycles etc. etc. All they if they are sufficiently advanced would give the same thing. And that is the idea of low phase space singularity. Is that what happened today?
All the advanced algorithmic traders are seeing the same thing and they pass trough an important human stop loss barrier causing a domino effect.
/the indicator is also available on TSD where it is under the name Entropy Math 3/
If it was not possible to gain from markets so why all the industry exist?
If nobody can win, why the big proportion of the Forex market is speculative?
Are we all insane and crazy? (a possible option as for me)
As I remarked the market is not a function you can approximate and it is not a signal. And that is why so intelligent guys fail. Because they assume that the market is a deterministic function (signal) they can approximate and predict. And it is not.
Let consider the market as a living beast. It really wants to keep us in the game, otherwise we will loose interest and it will die.
On the other hand he needs to balance the chances and give equal chance to everybody: long term and short term investors and speculators.
The market wants to give the same chances to the highly sophisticated traders and to the most stupid ones using basic strategies (consider this ).
The only way to win is not by predicting but by managing risk, having the mentality of the professional black jack player who has gained an edge over the house by counting cards. We strive for some kind of mathematical advantage allowing us to manage the risk properly, and not for some kind of a mystic algorithmic Cristal ball.
The problem is that some players gain an edge compared to the others. I mean the high frequency algorithms. As a result the market is distorted and anomalies (singularities) tend to appear, e.g. the flash crash the last year. This is a great challenge how to bring back the market to balance.
http://www.olsenblog.com/ A nice booklet how to trade.
My hypothesis is that with the entropy indicator and fractal dimension we can observe that and to take care of this constantly because this cannot be predicted in advance.
I have talked with some professionals who think that the only way to make those models to works is by using high frequency data and trying to profit for the market micro-structure. But there the challenge is great because it is about data and market access. On the papers I see that they use weekly and daily data to train neuronets and they work on those frames (if a SMA works just fine on those frames why not a complex model wouldn't LOL).
What I can share is only empirical and far away from valid market knowledge (unfortunately).
For me the most important concept is about the fractal dimension and entropy and giving us to know if we have and edge or the house has an edge (very often count your trades multiply them by the spread and you will have an estimate of the loss in your account). All the other indicators or systems you can change at will. Goerzel, SSA cycles etc. etc. All they if they are sufficiently advanced would give the same thing. And that is the idea of low phase space singularity. Is that what happened today?
All the advanced algorithmic traders are seeing the same thing and they pass trough an important human stop loss barrier causing a domino effect.
/the indicator is also available on TSD where it is under the name Entropy Math 3/
Attached File(s)
Entropy function binary.mq4
2 KB
|
1,316 downloads
1