Discussing the article: "Trends and Traditions: Using Rademacher Functions in Trading"

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Check out the new article: Trends and Traditions: Using Rademacher Functions in Trading.

Although the functions we will discuss have been known for quite some time, their application in the field of trading remains terra incognita to this day. In this article, we will explore some of the opportunities these old-but-new functions offer for developing trading strategies and assess their potential.

If we ask ourselves how many methods for processing and analyzing time series exist today, the answer that comes closest to the truth would be: a great many. However, before putting them into practice, it is advisable to familiarize yourself with their limitations and drawbacks. As an example, let's take systems of Rademacher functions. Their first drawback is that they are incomplete. This means that it is impossible to accurately reconstruct the original signal using them. Another drawback of these functions is their strictly defined periodicity. The period of the functions can only be equal to some power of 2. All of these shortcomings may limit the practical application of these functions.

But as we know, our strengths are an extension of our weaknesses. And we can easily prove this claim using Rademacher functions. These functions are incomplete solely because they are constructed using the odd sine function. However, a linear trend can also be expressed using an odd function.

This means that Rademacher functions can be used to describe linear trends with considerable accuracy, which is their undeniable advantage. Traders love trends.


Author: Aleksej Poljakov

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