What is an INDICATOR?
I advise you to clarify the subject. As far as I understand, we are talking about technical indicators, i.e. those software, which traders observe in their terminals. There are economic indicators, which are published in economic calendars.
Of course, first of all I mean the so-called TECHNICAL indicators for trading. However, if we consider economic indicators, their indicators are THEY used for making economic and legal decisions, i.e. the difference in the roles and functioning principles of technical and economic indicators is insignificant. For example the Hodrick-Prescott filter is used for 12-month seasonal adjustment of one of the most important economic indicators, while the Q-test of Ljung-Box,
used in ARIMA trading models is used to calculate various official economic indicators.
What is an INDICATOR?
Take the time to laugh at the simplicity of the question or to answer it hastily.
Almost all traders use indicators - some perceive them visually, some use them in trading software to make trading decisions.
There are dozens of basic indicators and hundreds of exotic ones. Nevertheless, in all this zoo there is no acceptable definition of what an indicator is and why it is needed for trading. However, I personally believe that the SCIENTIFIC answer to this question is the key to building a good trading system. An additional problem is, I believe, that a scientific answer should not only be "mathematical", or rather "mathematical-statistical", but also include a legal-economical component.
Please speak up.
an indicator is the conversion of one series into another :)
an indicator is a conversion of one series into another :)
Of course, yes, it is. Very well, such partial answer will simplify further discussion.
In that case, I further clarify the question: why apply or why apply this kind of conversion?
A full scientific answer, I believe, is worth a million dollars.
why apply or why apply this kind of transformation?
What is an INDICATOR?
- is a series obtained by mathematical transformation from a source series. You can specify the following types of transformations: regression, filter, spline, wavelet.
The technical indicator itself, regardless of the applied mathematical method, is not interesting, as there is a difference between the indicator value and the quotient and in non-stationary series this tail rotates everything. Therefore the choice of indicator should be determined by this residual, and here we go far beyond the scope of the topic.
- is a series obtained by a mathematical transformation of the original series. The following types of transformations can be specified: regression, filter, spline, wavelet.
The technical indicator itself, regardless of the applied mathematical method, is not interesting as there is a difference between the indicator value and the quotient and in non-stationary series this tail spins everything. Therefore the choice of indicator should be determined by this residual, and here we go far beyond the scope of the topic.
We all know HOW this transformation is done here. It doesn't really HAVE to matter. It's not a question. I'm asking WHY do it?
We all know HOW this conversion is done here. It doesn't really HAVE to matter. It's not a question. I'm asking WHY do it?
We all know HOW this conversion is done here. It doesn't really HAVE to matter. It is not a question. I'm asking WHY is it being done?
An indicator is first and foremost a sensor+method that provides human or robot-readable information for making certain decisions.
The whole point is to make it easy to perceive and interpret the information.
In my mind, to isolate the deterministic component.
I would say to identify the deterministic component at a given moment. and its change at different levels as each new minimum in discreteness occurs.
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What is an INDICATOR?
Take the time to laugh at the simplicity of the question or to answer it hastily.
Almost all traders use indicators - some perceive them visually, some use them in trading software to make trading decisions.
There are dozens of basic indicators and hundreds of exotic ones. Nevertheless, in all this zoo, there is no acceptable definition of what an indicator is and why it is needed for trading. However, I personally believe that the SCIENTIFIC answer to this question is the key to building a good trading system. An additional problem is, I believe, that a scientific answer should not only be "mathematical", or rather "mathematical-statistical", but also include a legal-economical component.
Please speak up.