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Examples: The Statistic Analysis of Market Movements and Their Prognoses

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MetaQuotes Software Corp.
MetaQuotes Software Corp. 2008.07.18 12:09 

New article The Statistic Analysis of Market Movements and Their Prognoses has been published:

The present article contemplates the wide opportunities of the statistic approach to marketing. Unfortunately, beginner traders deliberately fail to apply the really mighty science of statistics. Meanwhile, it is the only thing they use subconsciously while analyzing the market. Besides, statistics can give answers to many questions. One can analyze deals and their conditions more deeply and find the ultimate and more flexible solution to trading.

In fact, any trader who is in the slightest degree acquainted with the elementaries of Expert Advisors' writing uses the built-in tester optimization. But, alas, we are afraid he or she does not always fully realize what a mighty means collecting and analyzing statistics is.

It wouldn't be a mistake to suggest that at least 99.9% of traders use indicators or their combinations analyzing the market and its prognoses. The process of a trader's "getting to know" any indicator begins with a merely visual contact. A trader analyzes the indicator readings relating it to the price chart and tries to find steady regularities. If these visual regularities are not found, the trader puts such an indicator aside. If steady relations between the indicator readings change and the price movement are evident, the further work proceeds to the second stage, which is the quantitative search for successful price prognosis and, perhaps, Expert Advisor development.

After a long period of familiarization with a certain indicator or their combination the trader starts to interpret their signals on the discrete principle - "open up", "open down" or "no signal". I.e., the trader restricts the whole set of indicator readings only to unambiguous treatments, which simplifies market prognosis.

Author: o_O

Mehmet Bastem
Mehmet Bastem 2008.07.19 10:43  
PLEASE translate english.
MQL4 Comments
MQL4 Comments 2008.07.19 11:12  

Statistical analysis on a two-dimensional plane simply returns patterns. The human brain is probably most adept at extracting patterns visually and this represents simply another way of looking for patterns. Taking this to a multi-dimensional level changes things completely. In order to do so, one first has identify a common language and interpret events - x and y coordinates become non-sensical in a multi-dimensional world.

I would have to say that there is nothing new being offered here and the real statistical analysis comes out of interpretive analysis using multiple timeframes and dimensional perspective, returning aggregate and formula variable type data - such as rate of change. A series of events forming a pattern would be far more useful - could be used as a way of extracting various entry and exit techniques, not just the normal route of building an EA around one technique, as was done here.

MQL4 Comments
MQL4 Comments 2008.07.19 12:51  
Well thanks, for another great article!
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