Do the laws of physics work in forex?
When searching for patterns in price movements, analogies with various physical phenomena are not uncommon. And with varying degrees of success, different laws of physics, mathematics, geometry, etc. are adapted and applied in trading.
In this topic we will consider the applicability of Newton's and Hooke's laws to price movements.
I will proceed from the fact that any price movement requires a trade or - force application in the language of analogy. The volume of the trade is the modulus of force.
The resulting force can be determined by looking at the chart by the slope angle of the moving average. In this case, the MA period will be an indicator of force duration.
Since there are a lot of force sources and they all differ both in module and duration, several moving averages with different periods can be considered. This will help divide the resultant force into its components.
First of all, let us consider one moving average. In practice, it is not easy to accurately measure the slope of an average due to a large number of random fluctuations. In my opinion, the Hodrick-Prescott filter is the best solution for filtering these fluctuations.
For the calculations, we will take a filtered average with a period of 30. We will get the picture (Fig. 1.) where the slope angle of the average is not so dependent on random fluctuations and clearly shows the trend direction.
Let's calculate the modulus of force in the indicator according to the formula of Newton's second law F=dv/dt (fig. 2.). In the second figure we can see the time of action, modulus and direction of the force acting upon the price.
Now let's look at the deviation of price values from the median line. The constant convergence/divergence of the price vs. the midline suggests an analogy with the elasticity or tension force.
Also we use the formula F = - kx to build an indicator (fig. 3.).
The elasticity coefficient k has been selected so that the values of the forces are of the same order. It is obvious that k must be related to the period of the average as well as in physics this coefficient is related to the properties of a particular material.
Do you have any idea how to calculate it?
Further I have added both forces together in indicator (fig.4).
I have done the same with 3 averages with periods of 10, 50 and 250 and smoothed the result with the period of 15. The result is shown in fig. 5.
Connecting this indicator as a signal source for the EA produced the following picture (Fig. 6).
I suggest we discuss how to calculate the significance ratios for the averages with different periods and the calculation of the elasticity coefficient.
For certain groups of players they will and for others they will not.
The whole trick of the market is that there are a huge number of options to analyse and eventually there is an alignment of all possible forces. With a slight deviation from some sort of average. This is the only way to make money.
The market will be understandable if you know as much as possible about the analysis systems.
"I suggest discuss how to calculate significance ratios for averages with different periods and the calculation of the elasticity coefficient."
The amount of money in the market is a volatile quantity. Averages will reflect historical data. Changes in the amount of money supply under market conditions can change instantaneously. Your ratio will play a weak role. You will not trade on history. Checked. No fish but mines)
I suggest we discuss how to calculate significance ratios for averages with different periods and the calculation of the coefficient of elasticity.
Oh, man... no matter how you apply physics or any other conceivable and inconceivable laws, you get illan.)))
Connecting this indicator as a signal source for the EA, I got the following picture (Fig. 6).
And if we disable the martin in the EA, what do we get?
When searching for patterns in price movements, analogies with various physical phenomena are not uncommon. And with varying degrees of success, different laws of physics, mathematics, geometry, etc. are adapted and applied in trading.
In this topic we will consider the applicability of Newton's and Hooke's laws to price movements.
I will proceed from the fact that any price movement requires a trade or - force application in the language of analogy. The volume of the trade is the modulus of force.
The resulting force can be determined by looking at the chart by the slope angle of the moving average. In this case, the MA period will be an indicator of force duration.
Since there are a lot of force sources and they all differ both in module and duration, several moving averages with different periods can be considered. This will help divide the resultant force into its components.
First of all, let us consider one moving average. In practice, it is not easy to accurately measure the slope of an average due to a large number of random fluctuations. In my opinion, the Hodrick-Prescott filter is the best solution for filtering these fluctuations.
For the calculations, we will take a filtered average with a period of 30. We will get the picture (Fig. 1.) where the slope angle of the average is not so dependent on random fluctuations and clearly shows the trend direction.
Let's calculate the modulus of force in the indicator according to the formula of Newton's second law F=dv/dt (fig. 2.). In the second figure we can see the time of action, modulus and direction of the force acting upon the price.
Now let's look at the deviation of price values from the median line. The constant convergence/divergence of the price vs. the midline suggests an analogy with the elasticity or tension force.
Also we use the formula F = - kx to build an indicator (fig. 3.).
The elasticity coefficient k has been selected so that the values of the forces are of the same order. It is obvious that k must be related to the period of the average as well as in physics this coefficient is related to the properties of a particular material.
Do you have any idea how to calculate it?
Further I have added both forces together in indicator (fig.4).
I have done the same with 3 averages with periods of 10, 50 and 250 and smoothed the result with the period of 15. The result is shown in fig. 5.
Connecting this indicator as a signal source for the EA produced the following picture (Fig. 6).
I suggest discuss how to calculate the significance ratios for the averages with different periods and the calculation of the elasticity coefficient.
I can't get enough of all kinds of criticism. (((
A person opens a thread, asks a specific question, but in response all sorts of bubbles and practically not a single post on the subject.
Don't you have nothing better to do? Just go away, no one is forcing you to believe and accept what has been said. No, man, it is necessary zh must show up, indicate that much smarter than TC-a ...
What's the right way to spell it? "Kick ass" or "fuck off"?
I can't get enough of all kinds of criticism. (((
A person opens a thread, asks a specific question, but in response all sorts of bubbles and practically not a single post on the subject.
Don't you have nothing better to do? Just go away, no one is forcing you to believe and accept what has been said. No, man, it is necessary zh must show up, indicate that much smarter than TC-a ...
What's the right way to spell it? "Kick ass" or "fuck off"?
Maybe it's the goal of such topicstarters to shine, not the critics
Even so, the "critics" do everything they can to make it work.
But this is not the case in the vast majority of cases. Unfortunately...
Forum on trading, automated trading systems and trading strategy testing
Do the laws of physics work in forex?
Alexander, 2019.04.26 20:59
I propose to discuss how to calculate significance ratios for averages with different periods and the calculation of the elasticity coefficient.
That's the goal.
The rest is all flub.
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When searching for patterns in price movements, analogies with various physical phenomena are not uncommon. And with varying degrees of success, different laws of physics, mathematics, geometry, etc. are adapted and applied in trading.
In this topic we will consider the applicability of Newton's and Hooke's laws to price movements.
I will proceed from the fact that any price movement requires a trade or - force application in the language of analogy. The volume of the trade is the modulus of force.
The resulting force can be determined by looking at the chart by the slope angle of the moving average. In this case, the MA period will be an indicator of force duration.
Since there are a lot of force sources and all of them are different both in module and in duration, several moving averages with different periods can be considered. This will help divide the resultant force into its components.
First of all, let us consider one moving average. In practice, the slope of an average is not easy to measure accurately due to a large number of random fluctuations. In my opinion, the Hodrick-Prescott filter is the best solution for filtering these fluctuations.
For the calculations, we will take a filtered average with a period of 30. We will get the picture (Fig. 1.) where the slope angle of the average is not so dependent on random fluctuations and clearly shows the trend direction.
Let's calculate the modulus of force in the indicator according to the formula of Newton's second law F=dv/dt (fig. 2.). In the second figure we can see the time of action, modulus and direction of the force acting upon the price.
Now let's look at the deviation of price values from the median line. The constant convergence/divergence of the price vs. the midline suggests an analogy with the elasticity or tension force.
Also we use the formula F = - kx to build an indicator (fig. 3.).
The elasticity coefficient k has been selected so that the values of the forces are of the same order. It is obvious that k must be related to the period of the average as well as in physics this coefficient is related to the properties of a particular material.
Do you have any idea how to calculate it?
Further I have added both forces together in indicator (fig.4).
I have done the same with 3 averages with periods of 10, 50 and 250 and smoothed the result with the period of 15. The result is shown in fig. 5.
Connecting this indicator as a signal source for the EA produced the following picture (Fig. 6).
I suggest discuss how to calculate the significance ratios for the averages with different periods and the calculation of the elasticity coefficient.