Market prediction based on macroeconomic indicators - page 45
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clusters.
Now we are not playing a game of learning, but a game of taxonomy.
...
You have done and are doing a great job. But by your assertion, you are still no closer to answering your main question: "what is a pullback or a trend change". The main problem is that there is NO answer to that question. No one, not even the powerful, can give a 100% guarantee of an affirmative answer and BELIEVE on it. The interests of various financial groups are constantly clashing on the market, and it is impossible to answer exactly which group will win at any given moment and which way the market will go! The market moves oscillating because the forces of these groups change. And there are no indicators, predictors that will answer the question which of the groups will be stronger in a day, a week, a month or a year. It is a COFFEE GAME. :)
In short: You are trying to develop a system in an area where you are a STATIST, in an area where you cannot INFLUENCE what is going on! In my opinion, such a system will have a probabilistic nature and sooner or later you will lose money.
You should try to develop a system to protect your finances on data that you are able to control and influence. For example, only you and no one else in the world chooses the instruments for which you open the positions, only you determine the size of these positions, only you select the direction of the opening, only you determine when to close the position, etc. So develop your system on these YOUR actions. In this case, it will be up to you, not anyone else, to determine the success of your finances.
This is just my opinion on the subject. I do not claim to be the absolute truth in the last instance.
If I were doing something like this, I would take indicators such as:
1. The average cost of a food basket.
2. Attendance at hairdressing salons and beauty salons in different price categories.
3. Sales figures for expensive shoes.
4..
And similar statistics that really show the economic situation of the country/nation under study.
In my mind, the topic of the thread is very correct and on the mainstream of economics. But the topic is completely beyond the reach of any one person, and furthermore there are suspicions that the problem is not solvable at all in a market economy.
Let me explain.
In the Soviet Union, the study of the problem of the relation of technical and economic data has been enormously large-scale and significant progress was made, and in general, this work was completed by 1985.
What was the problem?
Inter-branch balances were the basis of planning at the country level. Illustratively, how much coal, steel was needed for one tank. Coal in one industry, steel in another, and a tank in a third.
We began to penetrate into meanings of words. At the first stage it turned out that different words have the same meaning (synonymy), and similar words can have a different meaning (homonymy). We removed for natural indicators like "coal" economic indicators. For economic indicators such as "profit", a lot of dissertations were written, but they clarified too.
Then they began to classify all technical and economic information. A huge number of people. Tens of thousands. In all industries, in many enterprises, at the level of central departments, in the Academy of Sciences. In the course of the work it was found out that, for example, a word "coal", which is usual for a man in the street, has 320(!) classification features. And when making a tank it was necessary to be able to compare classification features of all components of the tank and it was possible to make a state plan.
In order to formalise and generalise all created classifiers "languages of economic indicators" were developed. The notorious Yasin was a pillar in this field (Yasin is not an economist, but now anyone can call himself whatever he wants, including Yasin).
By 1985, it was possible to describe economic processes in the language of economic indicators to automatically generate the structure of relational databases.
Here is a complete list of the work that the author of the thread has swung to.
Does the branch author's work have a perspective? Probably. One should consider the obvious drawback of similar works under socialism - too much detail, which led to overfitting (overfitting) of the model with subsequent problems in the execution of the plan.
Of course, one should not swing at socialism, the model must necessarily be restricted, but the described work on classification, on clarification of the meaning of the economic concepts used, cannot be avoided, and this is not a job for one person.
..... But by your assertion, still no closer to answering your main question, "what is a pullback or a trend change". The main problem is that there is NO answer to that question. No one, not even the powerful, can give a 100% guarantee of an affirmative answer and BELIEVE on it. The interests of various financial groups are constantly clashing on the market, and it is impossible to answer exactly which group will win at any given moment and which way the market will go! The market moves oscillating because the forces of these groups change. And there are no indicators or predictors to answer the question which of these groups will be stronger in a day, a week, a month or a year. .....
In English tradition, here's a gift from me to you all (again, once again):
1). You are mistaken. There is an Expert Advisor that predicts trends, it's been posted on Market for YEARS, there are exemplary signals from it, one of which successfully (with a 19% drawdown) survived the December 2015 trends' crunch, which happens once every 9 years, which works on almost ANY currency pair and which is FREE. See in my profile. You can download the advisor and see for yourself.
2). We have made (I do not work myself) this advisor based on the performances of mathematicians on this forum, including Vladimir - the author of the thread. Moreover, some mathematicians of this forum got it for free back in 2013 privately (faa and alsu), the other mathematicians then simply ignored my appeal to them.
Why I/we managed to do it and others failed to "even come close" - see the following points.
3). A human being is different from a dog in that he/she knows his/her history. This means that when embarking on trading, any reasonable person will become familiar with the achievements of others in this field. Why this is not done, or not done enough by those who are engaged in trading or predicting the economy is a mystery. Trading is the most accurate part of forecasting in economics, because the trader is responsible with real money for his forecasts.
Why "traders" here don't read the most famous books on trading (e.g. "Exchange Magicians") and draw conclusions - I don't know.
3). But there is a well-known thing about the stock market - it gives each participant what he or she really wants.
"Exchange Wizards -1."
Ed Secota (pioneer of algo-trading):
"Don't all traders want to win?
Whether to win or lose, everyone gets what they want from the market. Some people seem to like to lose, so, losing money, theywin.
I know a trader who enters the market almost at the beginning ofevery big bull move and in a couple of months brings his $10,000 to nearly a quarter of a million. Then he has a psychological breakdownand loses all of his gains. This repeats like clockwork. I once traded with him, but got out of the market as soon as this change occurred. I doubled my capital and my colleague, as usual, lost. I shared my tactics with him and even paid him to manage the account. But he couldn't help himself. In my opinion, he really can't do it any other way. He doesn't need any other way. He gets alot of emotion, he gets a martyr's halo, he gets sympathy from his friends and he finds himself in the limelight. Besides ,it is possible that he feels more comfortable communicating with people who are in the same financial position. I think that, in a sense, hedoes get what he needs.
It seems to me that if people were to look closely at the manner in whichthey trade, they would see that in the end, given all their objectives, theydo get what they want, albeit without understanding or wanting to acknowledge what....
You see?
Most "traders" don't need to actually make money. Some need sympathy on the forum in their "trading style". Others need sympathy in their "scientific research" in economics. Let's take for example a retired major from this forum - he gets a military pension of 2...3 K a month, his daughter studies at a university of economics, his father "studies economics" and "consults others" from nothing to do. Why would he really bother? So do many others here.
"Writers write, readers read."
That's not how it's done. The market does give a great reward, but it is a HUGE reward for WORK. And the way and what exactly is discussed here is not work. Personally, I have carefully read all statements on this forum, and by analyzing WHY participants are wrong in some of their hypotheses, I/we managed to create an Expert Advisor that WORKS on spot forex, which predicts long-term trends.
4). Regarding macroeconomics and the US.
Since 1979 there has been a poker proverb among bankers: "If after 30 minutes of play you don't know who is the fool in the game, you are the fool".
"As they say in poker, 'If you've been in the game 30 minutes and don't know who the patsy is, you're the patsy.'"
Warren E. Buffet, chairman of Berkshire Hathaway, in the company's annual report.
http://quoteinvestigator.com/2011/07/09/poker-patsy/
See? The profound immorality of the world's banks and "investors" has gone so far that this famous alleged "prophet oracle" Warren Buffet wasn't shy about quoting that saying in messages to his investors in 1988. The richest man on the planet openly admits that in 1988 the world's financial system is a trillion-dollar casino in America, where no one warns the newcomer about anything, no one teaches him anything, and his losses are explained as "just failure" rather than his mistakes.
In so doing, he admits that he himself is part of such a scam.
If there is no teacher, the meaning of the patterns is not clear.
What is a teacher?
A chunk of quotient corresponds to longs, and this chunk of quotient corresponds to shorts. When the model is taught, the sets of predictor values are divided into two classes corresponding to the teacher.
What about without a teacher? What is the significance of the patterns?
The Expert Advisor (usually a person, but at the worst - an algorithm of pre-processing of quotes, that calculates for example the movement and drawdown on next several bars) that prepares data for the network, defines the meaning of patterns. In each input vector there should be a text label (a tag or at least gradation of the profit/loss ratio in case of the mentioned "lazy" approach with automatic preprocessing) describing a trade situation. In Kohonen's algorithms there is a labelling stage, which will place tags on selected clusters. So the teacher is present here in a veiled form at the data preparation stage (as in the vast majority of methods).
I doubt it would be possible to build a practically valuable model on such a vague teacher.
Let's take ZZ as the teacher - the most primitive teacher. Up = 1, down = 0.
Learn a model in which these 0s and 1s are predicted. Getting a prediction error of about 40% is almost always possible.
But does such a result have any practical value?
No.
The point is that the teacher was not neatly defined. We have 0 and 1 marked a POINT on ZZ, not the entire ZZ shoulder. Therefore, our 40% error is not an error in the definition of the ZZ arm, but an error in the currents in that arm, and those points will be mixed up within the links. The result is a 100% error in the prediction of the NC link.
Therefore.
Teacher, prediction and usage must be strictly the same. And any inaccuracies in the teacher's formulation will instantly lead to destructive results in practice.