Discussion of article "Technical Analysis. What Do We Analyze?" - page 2
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The article is about nothing. The author asks a question ("what are we analysing?") and tries to figure it out, but without figuring it out, he makes far-reaching conclusions about "distortions"....
Representation of data in the form of bars (candlesticks) is information compression. Yes, there may be a partial loss of information. But if the information parameter contained in the "signal" changes slowly (low-frequency), then reducing the sampling frequency will only reduce the noise in this parameter.
Proponents of HF trading (pip traders) do not understand, in my opinion, that they will always be fought (by increasing the spread, execution delays, etc.), as they do not objectively contribute to the increase of market liquidity, undermining the basic idea of the financial model of the economy as such. "Buying" for some time this or that instrument, we participate with our funds in economic processes. If this time becomes less than the lower threshold (frequency higher than the cut-off frequency), we become not only uninteresting, but also harmful, and we will be fought and poisoned like cockroaches or mice that scatter the created by other people's labour.
Have you tried 500:1 leverage? Believe me, it's not the shoulder....
And 1000% per year in a good situation on forex is not so fantastic, taking into account reinvestment of course :))
The proponents of HF trading (pip traders) do not realise, in my opinion, that they will always be fought against (by increasing the spread, execution delays, etc.), as they do not contribute to an objective increase in market liquidity, undermining the basic idea of the financial model of the economy as such.
Don't transfer the DCs' experience to the whole exchange trading. There are no such things as "spread increase, execution delays, etc." on the stock exchange
There are problems there, but all of them are natural, not artificial. No one fights with you on the exchange, you can't write off your own stupidity on the intrigues of "evil" brokerage companies.
I don't understand only why Close is favoured? Close is floating by definition, it is fixed for one moment when the bar breaks and immediately becomes history. Isn't it better to link to Open, which is set once and for all and is unambiguous in time.
And why Open-Close if Close differs from the next Open by one tick, isn't it better to take the difference of Open, Open[1]-Open[0].
In general, the article is interesting, although it is not news to me, I have long been using only mod Open in indicators.
Don't transfer the DC experience to all stock trading. There are no such things as "spread increase, execution delays, etc." on the stock exchange.
There are problems there, but all of them are natural, not artificial. No one fights with you on the exchange, you can't write off your own stupidity on the intrigues of "evil" brokerage companies.
I don't know about DELAYS, but there are questions about SPREDs. As far as I know they can change, and very much (though not often)....
If you have any questions - ask, someone will surely answer, you should not boil in the juice of your own misconceptions.
Spreads are naturally not fixed and can be from 1 cent to infinity. But the spread on the stock exchange has a completely different nature than in brokerage centres. On the stock exchange the spread widens and narrows constantly naturally as a result of changes in the ratio of supply and demand. Spread is not even a form of commission, as clients of brokerage centres are used to. Spread widening on the stock exchange is not a means of fighting with the trader, as it is formulated by rsi. Changing the size of the spread itself can be a strong indicator of market sentiment.
With delays everything is very simple - whoever placed the order first will be served first. Hence the race for the speed of connection with the exchange.
I hope this is a joke)
To your taste and choice.
1. About leverage
It's really not about leverage. If a person does not understand what is happening in the market and to put it mildly, "does not have a head" the deposit will be drained even with a leverage of 10:1.
In MT4 I personally lately calmly trade on accounts where leverage is much higher than 100, I got used to 500:1. Although for Forex I consider 100:1 to be optimal, I started with it (now I always recalculate based on the norm of 100:1). I personally will not be very comfortable working with a leverage of 20:1, although for the stock market it is excellent conditions (as far as I know).
For a beginner, I do not argue that working with such inputs is almost equal to suicide.
2. About 1000% per annum
But I wonder how much interest a trader will get at the end of the year if every month he increases his deposit by 25%, taking into account reinvestment?
If you have any questions - ask, someone will surely answer, you should not boil in the juice of your own misconceptions.
Spreads are naturally not fixed and can be from 1 cent to infinity. But the spread on the stock exchange has a completely different nature than in brokerage centres. On the stock exchange the spread widens and narrows constantly naturally as a result of changes in the ratio of supply and demand. Spread is not even a form of commission, as clients of brokerage centres are used to. Spread widening on the stock exchange is not a means of fighting with the trader, as it is formulated by rsi. Changing the size of the spread itself can be a strong indicator of market sentiment.
With delays everything is very simple - whoever placed the order first will be served first. Hence the race for the speed of connection with the exchange.
This is not news to me. It can also be specified that some fundamental and psychological factors can influence the spread value (but in general, of course, it is supply and demand).
And delays and other similar "troubles" related to the speed and order of processing requests, as I understand, are especially important on the stock exchange....
Absolutely right. The concept of "signal" does not exist in the market, if we approach it from a precise position. Because the process, which is reflected in price changes, is not known. If the process is not known, it is senseless to talk about any accurate models. And even more so, to argue about the sufficiency of data.
Actually, this is the basics of modelling, I am surprised that few people understand it.