Random Walk Theory Proved, once and for all.

Discussion in 'Trading' started by mu200411, Nov 28, 2007.

  1. Which benchmark will it beat on a risk-adjusted basis?
     
    #121     Dec 7, 2007
  2. neke

    neke

    if you can develop a system to profitably trade the random data, then in all probability it is not random to start with. It is like using mathematical formulae to generate pseudo-random numbers (which pass all the usual tests of randomness), and proceeding to predict the next items in the sequence by your knowledge of the formulae.
     
    #122     Dec 7, 2007
  3. piezoe

    piezoe

    Why is this thread still alive? What is the point?
     
    #123     Dec 7, 2007
  4. MarkBrown

    MarkBrown

    no i said i could take random walk theory which is a formula a math formula and make it be profitable on any data find some random data or fabricate some make it as tricky as you wish you could make it cycle like a fft and then the new data could go strait up or down like a trend and i could capture it no matter..
     
    #124     Dec 7, 2007
  5. MarkBrown

    MarkBrown

    no whats amazing is spydertrader and jack hershey longevity to never ending teach a method which is ever evolving. they mentor you as they learn themselves phenomena. so whats that point? whey are you even here unless your roman, tums, jack, spyder endless it is.
     
    #125     Dec 7, 2007
  6. piezoe

    piezoe

    Agreed, that is truly amazing!
     
    #126     Dec 7, 2007
  7. riskaverse305

    riskaverse305 Guest

    for a discussion of "random walk," this thread's lack of mathematics is astounding.

    an interesting theorem for symmetric random walks:

    if W(t) is brownian motion (represents the gain(loss) of a stock process at time t), and we define tau = time that W(t) hits price a or b (a>=b)

    then

    P[tau less than infinity]=1

    i.e

    take ANY two price levels around a starting price-- could be +/-1,000,000 -- and the probability that a SYMMETRIC (no trend) br. motion will hit one of these price levels is 1.

    ito processes have there place though, even if br. motion is obviously inappropriate.
     
    #127     Dec 7, 2007
  8. MarkBrown

    MarkBrown

    i have mine show me yours :D
     
    #128     Dec 7, 2007
  9. riskaverse305

    riskaverse305 Guest

    arithmetic?
     
    #129     Dec 7, 2007
  10. The decades old adage, "Buy on rumor, sell on good news", still causes a profitable "Biased Randomness". Why? :confused:
    The adage is old but the Market participants are new.:cool:

     
    #130     Dec 12, 2007