Random probability theory. Napalm continues!
And here we should make an important digression (of course, it's only my personal -of course, fundamentally wrong- suppositionJ ). The fact is that at the heart of the random falling out of parties is the urge to change the previous state. If there is no desire to change state, there is a tendency, and we can't talk about randomness at all. And a coin is only a highly simplified version, a special case. Take dice, and it becomes clearer - there are six states, and probability of repetition of one state is many times less. And if to take an adult way, there are unlimited states, but we simplify these variants to two, compressing a range.
I am not going to bring string theory into my topic ))) the knowledge is superficial, of course - as I see it ))) how is it possible that every particle of our existence constantly vibrates along an unpredictable hellish trajectory, but we do not fall apart but are quite constant? Maybe because while vibrating, it remains in place? Maybe because the sum of all conceivable vectors of motion eventually self-destructs? It is and is not (for we perceive time discretely), and this "is and is not" is a random walk, but still has a permanent residence.
here the probability theory fits perfectly - the result tends to equilibrium, but simultaneously we again come to that the meaning of randomness - aspiration to change its state (and this, however one wants, substantiates the memory of the previous state, for our, discretely perceived time, world)
What is the probability that by flipping a coin 100 times we will throw 100 eagles? What if it's 1000? 10000? Naturally, we're talking about a decent coin, and fair chance. But where are the limits? Apparently there are reasonable limits. Yes, there's a chance that a million times a coin will fall exactly with an eagle. But we won't have enough time to wait for such a coincidence. Not enough life, not just our life, not enough life of the universe. So this limitation can already be ignored? It remains to find the limits of reasonableness, as applied to specific things. Let's say forex. What are the chances that the euro-dollar will pass 200 (two hundred) figs? That the exchange rate will be for example 0.001 ? I suppose it tends towards zero. removing the dollar from circulation is unrealistic. The eu has such chances theoretically, but again - at a certain rate (and it will not be 0.001 ;-) ). Yen ... probably yes, if Japan will turn into Atlantis at once ... and then yen is likely to be well-integrated with yuan, so it will hardly sink at once either. So there are limits in forex after all? So, the movements of currencies (at least of some currencies) have definite limits? So why do not theorists take it into account? ))))
an excellent example, when one asks "I've got red 20 times in a row - is there 50% chance next time it will be red?" and wise theorists immediately answer - of course, the coin does not care. Let's put the question another way.
there are twenty spins. You (yes, you personally!) do not know the results of these 20 spins.
What is the probability that black will not come out once in 21 spins?
how's the maths there? 0.5 to the power of 21 = 0.00000047?
so what has changed? If we don't know the previous spins, the probability is nil. But as soon as we know the series, we immediately forget the series and concentrate only on one extreme spin. Why is that, I wonder? Is it to our advantage?
Any real examples on, say, 50 spins? (Not casinos, where dealers are trained to roll with the accuracy of two numbers, and not online roulette, where spins are rigged at a time or two. Real stat examples - how many are there?)
I also wonder what is a "random series" - one in which there are no clear trends? The distribution tends to be normal - that is, the number of heads and tails tends to equalise? What if it tends to be skewed like 70/30? А 80\20? Where is the boundary where the process is random and beyond the boundary is already a trend?
Or is it a process where the next state is independent of the previous one? Fine, but in this world EVERYTHING depends on something. Revisit the "butterfly effect" J.
Lastly - applicable to the market.
You can play with probabilities in the forex market. But, of course, one must take into account certain limitations, such as which pair, its volatility, history, trend and flat statistics and so on and so forth. For example - no matter how you look at it, but serious (read - high volume) decisions are made by human beings (automatic machines - only with confirmation from a trader). It means emotions, it means a few hits. Or, for example, one can push the trend for a session, a day, a week, but it is unlikely they will let you do it for a month - there are external factors such as fixation of profits. On this basis it is possible to predict a trend, or on the contrary its decay - and the statistics and, strange as it may seem, normal distribution will help (but what exactly - I will leave out) J for everything tends to balance in this real world.
Where's the money, Zin? )))))
I suggest that it is better to take apart the coin from the games, the strategy of playing it may be different, it is different size of the lot, and the rules of entry - say, a bet every 4 heads or tails, will be different from the bet on each outcome
And so on.
For example if you look at games from the side of 2 players with limited capital, they can lose their deposits faster or slower, if they bet unevenly, say one bet on an outcome of 100 bagels, and the other 50. They play the outcomes of the same coin, but they have their own games, and the VALUE of the game is different, and the rates of probability plummets are different.
And then there is this mechanism http://www.cut-the-knot.org/ctk/Parrondo.shtml
Note, the plum movement is the same - reduction of the deposit, but by changing the rates of plums we can, as in the example with the ball, on such resonances accumulate
For example, it is postulated that a coin has no memory, so let's go.
Actually, in terwer we are talking about the "ideal" coin, (fair, equilibrium, etc.). - This is a kind of mathematical abstraction. And the examples of flipping a real coin are given to make it easier for students to understand the subject.
Another matter is that the apparatus of ter.ver, in its practical hypostasis called mat.stat - often try to pull on real objects that do not meet the requirements of the theory at all. Well, who is to blame for it being misused.
Another thing, it is strange to accuse the theory of being wrong or unreasonable, using unsuitable arguments.
...the bank is in the hare, and so on )))).
If you can correctly interpret the market situation (which is possible through statistics... let's say a flat is not only determined by the convergence of wagons), then the lot has nothing to do with it. the main thing is not to rub it in, "the market is so unpredictable that anything is possible, even two hundred figures are possible"!
the main thing is not to shout "the market is so unpredictable that anything is possible, two hundred figures too! (с)
;-)
the main thing is that randomness is the urge to change states. shall we discuss this? )
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
You agree to website policy and terms of use
I've read a couple of threads about probability, randomness and theory, but it's a shambles.
So I'll just throw my twisted thoughts at you in case anyone understands. ;-) here we go.
Probability Theory(!) is correct
Probability Theory(!) is correct
Probability Theory is correct(!?)
The human being has been studying the surrounding world since ancient times, observing, making assumptions, fixing confirmations, making sure of the stability of regularities - and only then putting it as an axiom. once it was thought (and for a very long time) that the earth was flat - such conclusions were carried to the masses by the most advanced individuals at that time. But inquiring minds still argued, observed again, and produced new theories and new evidence. If you don't have it in you, if you take every theory at face value, you're basically dead )))) you can move on to the reception, and we'll have a chat about life.
Probability theory is just a theory. Not an axiom, a theory. Basically it's about a spherical horse in a vacuum. Besides, it's based on a few assumptions that are somehow considered to be true a priori. For example, it's postulated that a coin has no memory, and poof. Information is inseparable from matter, in fact, there is matter - there is information. And if there is a coin, it has memory, past states, tendencies, external factors and this cannot be discarded. I will expand the idea below.And what is probability? Is there a difference in series of tossing one coin or tossing several coins simultaneously? For example, is the probability of two dice rolling the same number (1-1, 2-2, etc.) identical to the probability of one dice rolling the same number in a row? Justify your answer )))))))
sometimes a funny problem on the theme of the field of wonders and the three boxes - I hope everyone remembers what it is about. The first choice is random(50\50), the second increases the odds to 66\33. Nobody's arguing with the decision, are they? Now imagine that we don't know about the first choice and come in from the street. We have one open box and two closed boxes in front of us. What are our chances of guessing? )) So who has more information has a better chance? Surprising, eh? )))
what is the criterion for the correctness of a theory? If it describes 50% of cases - is it correct? And if it describes 80%? А 99%? How much is required for a theory to be "true"? For example, for some reason no one argues with the pulled-over Fibbonacci numbers, dutifully taking them into account. And there, sorry, there is no basis for evidence, just statistics of some(!) random processes, according to which there are some numbers. And then, say, there is a theory of market efficiency. or inefficiency - I think there is one too ;-) what is the residue? That the market cannot win for everyone? But you personally argue with this theory, because you still go to the Forex market, why? Do you consider yourself smarter than others? Do you want to get rich? Or refute it with your own experience? What makes those theories better than probability theory, which is somehow perceived as a proven axiom? )))))
Well, now I will try to elaborate. For hardened theorists who can't try to understand a different perspective, please pass by.
please temporarily refrain from commenting until I have presented the full picture.