Some new ideas for your next trading system - page 3
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At the moment I'm much more humble than that. I can only try to solve your problem from a crazy approach. Let me explain please.
The world is very large, that's why I am sure that there are people in the world whose weight change in the last year can look like EURUSD. So let's suppose that we've been able to find that person, Bob, whose weight varies as EURUSD does. In this case, we can ask Bob for his weigh at a given time. That will be the signal to buy or sell!
Why would you believe that the correlation of Bob's weight with EURUSD would change now, just when you are entering the market?
Good point, let's study more the logic about Idea 1: Using historical weight measure to learn emotional factor about people gain/lose weight to use on the market.
Note that market prices are changing depending on the optimism of the buyer and the pessimism from the seller. This logic is also true for B buyers and S sellers, right?
Actually, in my opinion, this is the basis of everything about prices movements, and anyone can create a model using this logic.
So, the market prices are nothing more than the logical multiplication of several buyers optimism and sellers pessimism.
Maybe, the final sum of this could be a random walk, as some giants stated a long time ago (like Jules Regnault and Louis Bachelier).
That said, note that the idea is not using just the weight of one person, but a selected group of persons.
As our target is regarding creating a sentiment quantitative model, based on people weight, we must first find the correlation between optimism/pessimism and lose/gain weight of the selected group.
A group, for example, could be 100K users of a Smartphone application that shares their weight around the world, of course if the terms of use of the application enable this.
Well, the main target of the topic is not delivering the final architecture and algorithms, but just the idea and the logic behind, and, in my opinion, I gave the two ones for anyone that wants to build this trading system, and, for sure, have enough time and money to do this ;-)
As our target is regarding creating a sentiment quantitative model, based on people weight, we must first find the correlation between optimism/pessimism and lose/gain weight of the selected group.
A group, for example, could be 100K users of a Smartphone application that shares their weight around the world, of course if the terms of use of the application enable this.
I had thought the same. I'm sure there's an easy way to get this information, as you indicate.
In any case, assuming you can find a person or group of people whose weight is EURUSD sensitive, how would you argue the correlation between EURUSD and weight?
Are you saying there is some kind of relationship between both EURUSD and weight? Why should there be one? If you had no answer, would the correlation be important for you?
Idea 7: a trading system connected to a video game and the other way around (by figurelli)
What about earning money while your son win a video game? ;-)
Well, several years ago I had an idea where I imagine a boy playing a race car video game that was connected in some way to the price movements of the market, i.e., to win the race he had to beat the market in somehow. My vision was that this would be someday a reality to extract human intelligence in a different way to solve trading complex work.
I shared this idea some day ago at this pocket topic below, created by arnovinc.
I went through a deep study about this some time ago. And the ideia was to use EA´s has assets in a Farmville style simm environment.
In example, if you have a corn plantation would use a calm less risky EA to earn maybe 10 to 15% a year. The risk would be a flood or bad weather that would destroy the crop to simulate a bad market condition.
Or you could have PIGS or COWS that are more agressive EA´s , more productive but more sensible to deseases etc. If you bought oil futures you would have a field of oil extraction represented with live equity on your investment, metals would be mines with machinery operating... Similar to simcity graphics. You get the point... (the project plan was quite complex and complete even with some sponsorship from severall brands).
THe only problem resides in the LAWS that rule gamming and finance and the startup cost to make something really interesting instead of a joke.
If anyone think may have the legal an financial resources i´ll be glad to share more.
Hope you find the right EA. Now i am back to the "perfect algo" search.
Good trading to you all.
Regards
Jorge
I had thought the same. I'm sure there's an easy way to get this information, as you indicate.
In any case, assuming you can find a person or group of people whose weight is EURUSD sensitive, how would you argue the correlation between EURUSD and weight?
Are you saying there is some kind of relationship between both EURUSD and weight? Why should there be one? If you had no answer, would the correlation be important for you?
Note, this is the easy part, if can get the data, look for correlation looks direct, since you have the two variables and the history, right?
There are several quantitative models doing this all time for all kinds of possible correlations.
But the main point is that correlation does not imply causation, and maybe you want some way to prove the causation before find the correlation. "The counter assumption, that correlation proves causation, is considered a questionable cause logical fallacy in that two events occurring together are taken to have a cause-and-effect relationship.".
So, what I'm saying is that we can build a system to look for such correlation and, if successful, the causation.
...
THe only problem resides in the LAWS that rule gamming and finance and the startup cost to make something really interesting instead of a joke.
If anyone think may have the legal an financial resources i´ll be glad to share more.
Hope you find the right EA. Now i am back to the "perfect algo" search.
...
Jorge, great example of application related to the idea of trading system connected to a video game (idea 7).
I think that the problem you mean is exactly where I see we have to create a quantitative model to connect virtual facts and movements to real price movements.
Of course this is not an easy insight, but if you focus on fewer variables to do this, the first connections came easier, and can be improved in new connections.
Idea 11: a trading system based on interactive forecasting to filter any strategy (by figurelli)
The idea here is use an interactive forecasting, for instance Delphi Method, to filter any strategy that you still have or use. "First applications of the Delphi method were in the field of science and technology forecasting. The objective of the method was to combine expert opinions on likelihood and expected development time, of the particular technology, in a single indicator."
Of course, an interactive forecasting using some known method or formal approach, like Delphi Method, is the ideal solution, anyway you can test this using any interactive forecasting, like a Poll here at the Forum (this one, for instance).
Beyond the forecast for an instrument you need a strategy for this instrument.
The step by step method I propose for joining the interactive information and the strategy is:
1) Choose one instrument
2) Choose one interactive forecasting method
3) Execute the method (2)
4) Choose one trading system and strategy for the instrument you like
5) Check if the forecasting price is higher or lower than the current price to define the expected trend
6) Avoid long/short orders if the expected trend is not favorable
The advantage of this approach is that you can use all MT5 resources you still have to test your strategy, like backtesting and forward testing.
gitoatom:
THe only problem resides in the LAWS that rule gamming and finance and the startup cost to make something really interesting instead of a joke.
If anyone think may have the legal an financial resources i´ll be glad to share more.
figurelli:
So, what I'm saying is that we can build a system to look for such correlation and, if successful, the causation.
Yes, that's the answer!
In my opinion, it is possible to find someone who looks like EURUSD, but there is no reason to think that there is a cause-effect relationship. Therefore, this system is ok as long as we believe the correlation is still continuing. Or maybe we can jump into a Non-Aristotelian logical system to try to understand this weird phenomenon.
Yes, that's the answer!
In my opinion, it is possible to find someone who looks like EURUSD, but there is no reason to think that there is a cause-effect relationship. Therefore, this system is ok as long as we believe the correlation is still continuing. Or maybe we can jump into a Non-Aristotelian logical system to try to understand this weird phenomenon.
The big problem I see today is creating an open place to start, i.e., people freely talk about their ideas about trading systems, as any brainstorming.
So, if more people bring new ideas here, money will not be the problem, since the main step is we have some new ideas to start, because ideas can evolve to better and real competitive trading systems, if we can wait the collaborative work to connect the good points and filter the bad ones.