Discussing the article: "Gain An Edge Over Any Market (Part II): Forecasting Technical Indicators" - page 3
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you're taking liberties with the concepts of "redrawing" and "not redrawing".
because in your interpretation -- redraws everything:
-- a price chart is redrawing because it has a current bar forming and is not stable
-- the MA is redrawing because the value on the current bar is forming and is unstable.
-- etc.
any indicator consists of elements -- the current element is always formed -- elements are single-bar (MA, price chart), N-bar (fractal), X-bar (there is no exact number of bars in an element, e.g. Zig-Zag).
formation and instability of the current element does not make the indicator redrawing.
p.s. if you think of replying to my post -- do not use the phrases "rubbish", "show illiteracy", etc. -- conduct the discussion correctly and reasonably -- otherwise the discussion has no sense
Yes, because that is what it is - illiteracy.
You confuse yourself and try to operate with contradictions. I pointed out the logical error in such judgements, let him think.
Gone.
If you say that all indicators are overdrawing -- it is the same as saying that no indicator can give a stable signal -- ( not about the quality of the signal for trading decisions).
Divergence requires finding some already formed "figures" - extrema, fractals, etc. in order to make a decision/prediction. - to make a decision/prediction. The time for formation is given by the lag, because of which the signal is delayed.
Predicting the future value of the value equal to the current one is the most trivial technique, which does not count as a prediction and does not give a gain if it is followed systematically.
Stanislav, here is the usual MASD. Nothing lags anywhere, everything is formed. And there is some time for a snack )).
By the way, the indicator itself hints with its name to the area of application - Moving Average Convergence/Divergence. The indicator is not only about the last value, it is also about different sets. In this example, plus/minus bar is a statistical error. But of course it is not a fact that the divergence will work out, there is always a probability, but as I said above, this is another conversation....
Divergence requires finding some already formed "figures" - extrema, fractals, etc. in order to make a decision/prediction. - to make a decision/prediction. The time for formation is given by the lag, because of which the signal is delayed.
If the signal is the formation of a "figure", why does the signal lag?
some price movement is necessary for the formation of a "figure" -- why does the price movement lead to the interpretation "the signal is late"?
A strong price movement (which can be interpreted as "late") can be filtered out -- but it has nothing to do with the signal from the indicator -- the indicator has given a signal, further processing/filtering of the signal is not the task of this indicator.
In Fig 1 Below I have applied a 200 period simple moving average on to M1 data captured from the USDZAR Pair. The chart represents 1 hour of M1 data. The blue line, which is the close price, fell over 60 mins. But the orange line, the 200 MA, rose over the same period. We can clearly see that the indicator in this instance is lagging behind price.
However, the lag is not necessarily a bad thing. Aleksey made a comment in the right direction, we can indeed build models that account for the lag. By subtracting the difference between the moving average and price itself, you have the lag component. Predicting the future value of the lag component may help us overcome the lag in the indicator.
So in other words we can decompose the current price into the sum of the moving average's current value and the lag of the indicator (distance between price and the indicator). If we therefore predicted the future indicator value, and the future lag value, we could hopefully obtain forecasts of future price levels, that take into account the lag of the indicator.
Fig 1: Visualizing the lag of the simple 200 MA.
In Figure 1 below, I have applied a 200-period simple moving average to M1 data taken from the USDZAR pair. The chart shows the M1 data for 1 hour. The blue line, which is the closing price, fell in 60 minutes. But the orange line, the 200 MA, rose over the same period. We can clearly see that the indicator is lagging behind the price in this case.
However, this lagging is not necessarily a bad thing. Alexei made a point in the right direction, we can indeed build models that account for the lag. By subtracting the difference between the moving average and the price itself, you get the lag component. Predicting the future value of the lag component can help us overcome the lag in the indicator.
In other words, we can decompose the current price into the sum of the current value of the moving average and the lag of the indicator (the distance between the price and the indicator). Thus, if we predicted the future value of the indicator and the future value of the lag, we could hope to get predictions of future price levels that take into account the lag of the indicator.
Bottom line: there is still a lag in the indicator, and we need to correct it by complicating the model with higher order derivatives.
In the case of the above example with MACD, the first divergence (not marked) occurred at the lows of the 9th and 10th, and the fact that it was formed can be seen only in the middle of the 11th. The second divergence (marked) occurred between the lows of the 14th and 15th, and the fact that it was formed can be seen only in the evening of the 15th. Fans of the Russian language can call it whatever they like, but the presence of a time interval between the decision and the initial data for this decision is a lag. A good indicator of lag is the missed profit from a signal. We should not forget that MACD is based on MA-scores and therefore by definition lags. The concepts of leading and lagging indicators are standard for economists and traders. If someone is picking on them, let him go to study the material himself.
As for the overdrawing - everything is also known in the trader's dictionary. Why do you need to twist it? It is not the update of data and indicators of the last bar that is called a repricing - it is obvious that it is only being formed - but the change of figures on a deeper history, as it happens with a zigzag, all kinds of Fourier decompositions, etc.
And there were no such statements that all indicators lag or all indicators are redrawn. Do not speculate and descend to attacks on the basis of your misunderstanding.
I will not respond to this flud anymore.
In summary: there is still a lag in the indicator, and we need to correct it by complicating the model with derivatives of higher orders.
In the case of the above example with MACD, the first divergence (not marked) occurred at the lows of the 9th and 10th, and the fact that it was formed can be seen only in the middle of the 11th. The second divergence (marked) occurred between the lows of the 14th and 15th, and the fact that it was formed can be seen only in the evening of the 15th. Fans of the Russian language can call it whatever they like, but the presence of a time interval between the decision and the initial data for this decision is a lag. A good indicator of lag is the missed profit from a signal. We should not forget that MACD is based on MA-scores and therefore by definition lags. The concepts of leading and lagging indicators are standard for economists and traders. If someone is picking on them, let him go to study the material himself.
As for the overdrawing - everything is also known in the trader's dictionary. Why do you need to twist it? It is not the updating of the data and indicators of the last bar that is called a redrawing - it is obvious that it is just being formed - but the change of figures on a deeper history, as it happens with a zigzag, all sorts of Fourier decompositions and so on.
And there were no such statements that all indicators lag or all indicators are redrawn. You should not speculate and on the basis of your misunderstanding descend to attacks.
I will not respond to this flud anymore.
Stanislav, why are you looking for highs, the indicator is a convenient way to get some information about the price, for example, you can sell on ASC trned when the indicator gave a mark up, when the trend is down, someone can describe this full property on the basis of the original.
and in general, when you become a public person, you have to follow these public rules.And there were no such statements that all indicators lag or all indicators are redrawn. Do not speculate and on the basis of your misunderstanding descend to attacks.
"You're fucking crazy".
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Discussion of the article "How to get ahead of any market (Part II): Forecasting Technical Indicators"
Stanislav Korotky, 2024.10.15 17:41
Given that all technical indicators are lagging or redrawing, their forecasting will also be lagging or changing.The advance or lag is defined in relation to the original series. If an indicator can forecast prices, it is leading. If it cannot, it is lagging :)
Whether it can or cannot is determined statistically, for example, through the percentage of predicted cases. Since any single indicator based on prices predicts <50% of future prices, they can be called lagging.