Algorithms and Trading Systems based on Chess game strategies - page 6

[Ubzen]

figurelli: Actually, Victor Allis estimated game-tree complexity of chess "to be at least 10¹²³  

I liked too much what you told about you chess/candle insights, as this may be also a way to address the dream 

Interesting. That really would require a Quantum Computer to play perfect games at normal speed. I also enjoy the reference to Claude Shannon. Anytime I read someone's name from Bell_Labs back in that period, I get excited :)

As for the chess_model, I believe you once said that the Technology for developing self-learning systems wasn't quite here yet (something like that), I'll probably place a reliable chess_model within the same category.

Once I start trying to design EA which can read a News_Paper, I believe this is when I've combined the study of Technical_Analysis with Fundamental_Analysis. If I go even further and designed this EA to predict Human Emotions, then I've probably also crossed over into Psychology. This isn't an easy task.

With that said, I believe simple is better. I would start off by ranking the known Japanese_Candlestick patterns. Like the ones listed Here.

• Then I would consider the Bullish_Candles as the player playing the White_Pieces on the Chess_Board.
• Then I would consider the Bearish_Candles as the player playing the Black_Pieces on the Chess_Board.
• The Time on the Chart could be used as the X-Axis of the Chess_Board.
• The Prices on the Chart could be used as the Y-Axis of the Chess_Board.
• There are of course some known Patterns which carries higher weights than others.
• The Strongest Pattern like a Doji might be considered the Queen, while the Trade_Position might be considered the King.
• Therefore, when Bullish_Candles mobilize a series of Queen->Bishop->Pawn. We could identify this Set of moves into Gambits [ Classes ].
• Staying True to myself, I wouldn't try to optimize this systems parameters ... at-least not for the 1st runs.
• I would just define what I believe are some Strong_Moves, Enter/Exit based upon those, and see what happens.

Later... if that shows potential, I would look into expanding the Known_Set.

As you guys explained earlier, this Known_Set is what modern computers use to evaluate good standings.

That is because mod_comps simply cannot calculate all the possible combination into the end-game. 

[Ubzen]

bendex77: Not so simple. Even if you consider a simple tick to be a "turn," the market has other dimensions to consider such as: time (when will it tick up or down?),  amount or price (how far will it move up or down?). Even just these two dimensions alone give infinite possibilities....

Yes, I agree with you again. I usually say, it isn't enough to just predict the Direction. A trader is usually faced with predicting the Direction | the Time | and the Distance.

[[Deleted]]

figurelli:

Thanks, now I see it better, but I still can't connect the points.

Maybe to help this, think in the the following steps:

• Dream Step 1: Imagine a match YOU x Market (just EUR/USD, for instance, any timeframe)
• Dream Step 2: How do you decide what piece move (and where) using EUR/USD graph/news/etc.?
• Dream Step 3: How EUR/USD graph/news/etc. will indicate the virtual market move (what piece and where)?

If you can write a code for this 3 steps, and explain the algorithms to address that, you have an Eureka too, as in my opinion, any dream model must address these 3 steps, if we really want to emulate this game and not just use conceptual tactics models.

By the way, I wrote this dream steps as a rule in the first post, so we can improve it better.

Hello. I'm in a rush today, so I answer this way.

• Dream Step 1 -> It's not me against the Market, it's the "intelligent Expert Advisor" against the Market.
• Dream Step 2 -> The market is moving because of fundamental events. Therefore, the robot tries to anticipate these movements. Of course, the EA's predictions are equivalent to chess moves. The robot can't do anything but anticipate the market by placing orders. We always have to keep in mind that trading and chess are different strategy games.
• Dream Step 3 -> Of course, we can never know what the market will do! What we do know is what and when can potentially happen thanks to the news calendar and the Collective Intuition.

I personally cannot code anything until the problem is well defined and understood, at least right now, sorry! Some of you have much more MQL5 experience than me, I mean coding that would take me a while. So if you want it can be left as an exercise for you.

[[Deleted]]

Is this science fiction? No!, these are some interesting links on auto-regulating systems, just to dream a little ;-)

Cognitive science

Gödel, Escher, Bach: An Eternal Golden Braid

[Rogerio Figurelli]

laplacianlab:

• Dream Step 1 -> It's not me against the Market, it's the "intelligent Expert Advisor" against the Market.

Jordi, as you are the owner and/or designer of this EA, let's say in this way, it's really YOU against the Market. 

• Dream Step 2 -> The market is moving because of fundamental events. Therefore, the robot tries to anticipate these movements. Of course, the EA's predictions are equivalent to chess moves. The robot can't do anything but anticipate the market by placing orders. We always have to keep in mind that trading and chess are different strategy games.
• Dream Step 3 -> Of course, we can never know what the market will do! What we do know is what and when can potentially happen thanks to the news calendar and the CollectiveIntuition.

I do like the concepts. But to be honest, I don't realize how do you translate this concepts to a complete system and the algorithms. For instance, how would you open a Job task at MQL5.com with this? 
  

I personally cannot code anything until the problem is well defined and understood, at least right now, sorry! Some of you have much more MQL5 experience than me, I mean coding that would take me a while. So if you want it can be left as an exercise for you.

Our idea is just to find a way to code, just find a way to describe what to code, so don't worry about that.

I think the main point here is finding a way to create a virtual game that will open real trades in some way, so we must translate concepts to a real system.

[Rogerio Figurelli]

Based on last posts, the dream steps were updated to (underlines):

• Dream Step 1: Imagine a match YOU (your system) x Market (just EUR/USD, for instance, any timeframe)
• Dream Step 2: How do you decide what piece move (and where) using EUR/USD graph/news/etc.?
• Dream Step 3: How EUR/USD graph/news/etc. will indicate the virtual market move (what piece and where)?
• Dream Step 4: How pieces moves are converted to a real trade?

 Note that step 4, in theory, must be related to piece moves to we get a more realistic system, regarding step1.

[Rogerio Figurelli]

Ubzen:

Interesting. That really would require a Quantum Computer to play perfect games at normal speed. I also enjoy the reference to Claude Shannon. Anytime I read someone's name from Bell_Labs back in that period, I get excited :)

As for the chess_model, I believe you once said that the Technology for developing self-learning systems wasn't quite here yet (something like that), I'll probably place a reliable chess_model within the same category.

Once I start trying to design EA which can read a News_Paper, I believe this is when I've combined the study of Technical_Analysis with Fundamental_Analysis. If I go even further and designed this EA to predict Human Emotions, then I've probably also crossed over into Psychology. This isn't an easy task.

With that said, I believe simple is better. I would start off by ranking the known Japanese_Candlestick patterns. Like the ones listed Here.

• ...

That is because mod_comps simply cannot calculate all the possible combination into the end-game. 

Thanks, very good, so I think that now we have three different approaches (Figurelli, Jordi and now Ubzen) to create a system to play against the market. Not bad for something that was a dream some weeks ago ;-)

Anyway we must prove the concepts and architectures, but I see great ideas here to evolve to that.

About the Quantum Computer and real games, nothing is really perfect, and maybe here we have a good opportunity to use all these ideas, since we all know that we are creating heuristics.

Chess Grandmasters create such heuristics in their brain too, since moves combinations are near infinity, to try to find a good move. They all know that after some movements, all they can realize is find a good move. 

Probably this is a good way to trade in the market today. We have infinity complexity and uncertainty, but most of traders and EAs are trying to be deterministic, and/or consider that will find a way to be profitable without heuristics.

But here, our EA must find heuristics, like "read" newspaper or "play" chess to try be profitable, as Grandmasters do, and maybe this approach is more realistic.

[[Deleted]]

figurelli:

Jordi, as you are the owner and/or designer of this EA, let's say in this way, it's really YOU against the Market. 

I do like the concepts. But to be honest, I don't realize how do you translate this concepts to a complete system and the algorithms. For instance, how would you open a Job task at MQL5.com with this? 
  

Our idea is just to find a way to code, just find a way to describe what to code, so don't worry about that.

I think the main point here is finding a way to create a virtual game that will open real trades in some way, so we must translate concepts to a real system.

I think a good way to go with this idea (this approach wants to be a science-based one) is by asking good traders how they operate when they tune into a given cognitive process (for instance, patience, initiative, etc.). We can capture these behavior patterns.

So an essential step under this paradigm is showing people who want to participate in this experiment some specific charts, ask them how would they behave, and then we take some notes to analyze. This is something like a projective test applied to trading.

Would someone post some charts in Forex Trading Strategy - PATIENCE and ask those discretionary traders how they would behave? This will lead us from up to bottom -> from concepts to MQL5 code.

[[Deleted]]

figurelli:

Our idea is just to find a way to code, just find a way to describe what to code, so don't worry about that.

I think the main point here is finding a way to create a virtual game that will open real trades in some way, so we must translate concepts to a real system.

Anyway, keep in mind that I think that coding all this is not easy, at least for me at this time. Thank you for your interest and support. If I had more time I'd participate in other ideas published in this thread.

[Rogerio Figurelli]

laplacianlab:

I think a good way to go with this idea (this approach wants to be a science-based one) is by asking good traders how they operate when they tune into a given cognitive process (for instance, patience, initiative, etc.). We can capture these behavior patterns. 

I like this approach, but if we find a way to, instead of asking, measure this in real time (so we can create a full quantitative system, even to work in high frequency).

I just see this kind of ideas studying HFT approaches. I do like their challenges to try find new ways to measure such sentiments.