From theory to practice. Part 2 - page 84
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So, are we now talking about stationary price increment plots specifically? After all, the general consensus is that these are the ones you can and should make money from? Isn't it?
So:
1. The price itself can not be considered, its model is not known to us and is maximally approximated to the SB and it is impossible, by definition, to make profit on it.
2. We may make profit on stationary segments of price increase.
Right?
Let's start at the beginning, i.e. with terms and concepts. Mathematical model. This is a set of formulas that describe the dependence of a variable, the price, on some parameters / factors, time, popular excitement, indices, morbidity, number of scientific patents or whatever.
The parameters/factors are not known to us due to their multiplicity and lack of knowledge.
We also know that the behaviour of the CR over time has similarities with the SB. What similarities. If we have a stable rise/decline, which is called a trend here, then price fluctuations around this average are sufficiently similar to SB. That's pretty much what has been proven. Similarity with Brownian motion with different spread/dispersion. The range of motion of molecules depends on temperature. CR also has time varying volatility.
So the assumption that high frequency price behaviour similar to SB is SB is an assumption. Although scientifically, there is a limit to the number of members of a set, after which accounting for each member is inefficient, and it is much more efficient to follow the average parameters of the set. That said, we understand that a multifactor deterministic / predetermined by these uncontrollable factors does not become a SB.
Apologies in advance, obtuse language, but hopefully more or less understandable.
п. 1 By considering increments from a fixed price, we take price into account. Again, we do not know the future price model. But this does not mean that we cannot find the model of the current plot and make money on it by inertia. I do not like the term "make profit". A more correct term is to find a sufficiently reliable mathematical model.
п. 2. Yes. We don't know when the stationary section will end, but we do know that it has a duration in time that does not tend towards zero.
Went in, saw the initials of some Sergei Borisovich and Matrena Olegovna again, realised all was lost, left
thanks... funny)))))
п. 1 When we consider increments from a fixed price, we take the price into account. Again, we don't know the future price model. But that doesn't mean that we can't find the model of the current plot and make money on it by inertia. I do not like the term "make profit". A more correct term is to find a sufficiently reliable mathematical model.
п. 2. Yes. We don't know when the stationary section will end, but we do know that it has a duration in time that does not tend to zero.
Let us add to the earning possibilities.
1. We do not know the model of price BP. We assume that it is a random process with drift (drift, trend,...). While it is impossible to earn on a random process without drift (of the SB type), it follows that one can only earn on the trend of the price series itself.
2.You can make profit on stationary segments of price increase.
Hmmm....
I've been thinking....
The aforementioned methods of possible earning are complete rubbish and nonsense. For they don't give freedom of creativity to those who suffer... There is no Life in them.
Amen.
We assume that it is a random process with drift (drift, trend,...). And since it is impossible to earn on a random process without drift (SB type), it follows that one can only earn on the trend of the price series itself.
It's a total mess. I recommend you get your terminology straight.
I don't have time to sort out these potato varieties... You figure it out.
All I care about is the Grail.
The more one delves into physics, the further removed from the real market))
I agree.
It gets boring and I immediately feel bad...
I don't have time to sort out these potato varieties... You figure it out.
All I care about is the Grail.
What's wrong with being an instrumentation physicist or a power engineer? No, they want free money in their leaky pockets. They want the Grail. Funny guys.
Markets don't like the smart ones, markets like the lucky ones.)