Some signs of the right TCs - page 30
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The task is clear: if the market suddenly starts to go backwards and in circles, or the price and time scales change places and the tick history of hundreds of symbols spontaneously mixes up, the TS should still be ready to pluck forex by the scruff and milk it like a cow 24 hours a day.
No, of course, there are no regularities in pure randomness, there are regularities in sinusoids, in one-factor, five-factor functions it is easy enough to find regularities or investigate the function and even decompose it into sinusoids. But here is where the limit, from the number of factors, the ability to find a pattern. And the number of such factors that would make it impossible to find a pattern is finite (in the sense, not infinite). And if these factors are not considered, i.e. unknown for analysis, the idea of the grail is inappropriate. Weather is a multifactor function, and we know much more about these factors than we do about the market ones, the function is continuous and without bids\ask price logic. And we still cannot predict it accurately enough, even in the medium term.
No of course, there are no regularities in pure randomness, there are in sinusoids, in a one-factor, five-factor function it is easy enough to find regularities or examine the function and even to decompose it into sinusoids. But here is where the limit, from the number of factors, the ability to find a pattern. And the number of such factors that it would be impossible to find a pattern, of course. And if these factors are not considered, i.e. unknown for analysis, the idea of a grail is inappropriate. Weather is a multifactor function and we know much more about these factors than we do about the market ones, the function is continuous and without price bids\ask logic. And we still cannot predict it accurately enough, even in the medium term.
I tried my robot on synthetic instruments and the results were interesting. The settings are the same everywhere
1) GBPUSD m1
2) 1/GBPUSD
3) 2*GBPUSD
4) 2+GBPUSD
5) GBPUSD^2
It turns out that adding the coefficient 2 has not affected the drawdown and yield at all. Multiplication by the coefficient 2 has increased the drawdown and yield, exponentiation has significantly increased the drawdown and has almost no effect on the yield. With the reverse instrument the strangest thing, the yield fell and the drawdown increased by 2 times. But I understood the problem there, my algorithm stumbled on rounding errors, it should be corrected in the next version.
Why use mathematics where it is powerless? We don't know if it's random or regular, but we assume it's a regularity. A new assumption is imposed on this assumption - the number of process factors known to us is sufficient for an accurate prediction. But surely we know neither the former nor the latter, and we undertake deep calculations, secretly motivated by an idea completely at odds with all respectable scientificity.
We know for a fact that market prices are not random, but a multifactor function. And the question here is whether we should strive for mathematical correctness of the TS and what it might yield.
We know for a fact that market prices are not random, but a multifactor function. And the question here is whether we should strive for mathematical correctness of the TS and what it might yield.
Ok. Price is indeed NOT random within a certain sequence and order. But, inside the bid-ask range it tends to be random and that point encapsulates all the market unpredictability with an infinite number of factors. And from it, it spreads out in waves to all timeframes, breaking in the guts of the "patterns" piling up behind it.
I agree with that, except for the infinite number of factors))) That's the difficulty. Brownian motion too can be calculated molecularly only up to a certain number of molecules. But we have neural networks, optimization and other smart tools. That is the question about mathematical correctness, whether it is necessary for optimization.
Utopian fantasy
But I have been using this exact system for several years. I've been trading on demo for 2.5 days already. During first 2 days it has made 104 thousand of 10 thousand, and during last half a day it already started to get close to 2 million. In total it is 175 times in 2.5 days.
So that's lagging quotes. That doesn't count.
About the "mathematical correctness of the TS". If this implies a "forced" interpretation of market processes as unconditionally predictable multifactor functions, then I disagree.
No, it implies replacing addition by multiplication via logarithm and symmetry of Buy\Sell algorithm. Well and the logic of the TS should be in the rules of mathematics.
And the predictability of multifactor functions depends on the number of factors and their predictability. In general, with a large number of predetermined factors the function may become unpredictable. And if the factors are predetermined but unaccountable, the problem is even more difficult.