Discussing the article: "Chaos theory in trading (Part 1): Introduction, application in financial markets and Lyapunov exponent"
So, for what settings is the section "Interpretation of statistical analysis results" made? If it is just for default parameters, then it is incorrect. It would be necessary to define the effective values of Time lag and Embedding dimension in some way. From my past experiments, I will tell you at once that the lag should definitely not be 1, but somewhere from 7-8 and higher, depending on the timeframe. Embedding dimension 2 is also only for testing the code performance, but not for analysing a particular series.
So for what settings is the section "Interpretation of statistical analysis results" made? If it is just for default parameters, then it is incorrect. It would be necessary to define the effective values of Time lag and Embedding dimension in some way. From my past experiments, I can tell you at once that the lag should definitely not be 1, but somewhere from 7-8 and higher, depending on the timeframe. Embedding dimension 2 is also only for testing the code performance, but not for analysing a particular series.
Good afternoon! Yes, I also have a large lag better. I am still working on the code of the EA, in the next articles will be=)
There is no Chaos in the market! Everything is always modelled quite accurately if you know how the model develops!
It's just a moron who gave this theory such a name. He has "chaos" consisting of strict mathematical models - an oxymoron (antithesis, if you want).
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@Yevgeniy Koshtenko, I didn't do anything special - just installed, compiled and...
I have no negative indicator values on any timeframe of two tested pairs - euro and gold.
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Check out the new article: Chaos theory in trading (Part 1): Introduction, application in financial markets and Lyapunov exponent.
Can chaos theory be applied to financial markets? In this article, we will consider how conventional Chaos theory and chaotic systems are different from the concept proposed by Bill Williams.
Conventional chaos theory and Bill Williams' concept of "chaos" are very different. The former relies on rigorous mathematical principles and uses sophisticated tools to analyze systems. The latter, on the other hand, uses an intuitive approach and technical indicators, such as Alligator and Fractals, which have no direct connection to the mathematical theory of chaos.
Conventional chaos theory is based on rigorous mathematical principles and scientific research in the field of non-linear dynamics. It uses rigorous mathematical methods and considers chaos to exhibit deterministic but unpredictable behavior. Williams uses the term "chaos" more loosely, referring to the general unpredictability of markets. His methods are aimed at practical application in trading, rather than at deep analysis of the chaotic nature of the markets.
Although Williams adapted some terms from chaos theory, his approach is based more on technical analysis and personal interpretation of market movements. This has drawn criticism from chaos theorists, who find the use of the term "chaos" in this context misleading.
Author: Yevgeniy Koshtenko