I trade the SP500 emini futures, so many times during the day the mkt will come rigth up to a trendline and bounce off, or come up to a S/R and bounce off? Does the mkt have a memory? with 70% of the volume coming from algorithmic trading and 30% human traders. I mean how does this happen, that mkt stops on a dime, will come right up to the trendline and bounce off? thank you for your time.
so I am asking if the mkt bouncing of trendlines is causal or a matter of correlation. causal means that event a causes event b correlation simply means that there is a reciprocal relationship between the two.
http://www.youtube.com/watch?v=pPTLK5hFGnQ According to this video example, indices(e.g,S&Pmarket)seem to have higher conditional probability of going up than individual stock? Why?
Does the mkt have a memory? NO. Because 70% of trading is algos. Does the mkt have a memory? YES. Because memory is usually defined to be longer term than algo time periods.
Indeed you are right.... considering all algo programs are calibrated on historical data and have look-back windows, it's entirely unbelievable that the previous post could think that algos have no memories.
You're missing the point of my response. The context is "so many times during the day". While algos may incorporate short term memory, most algo research is on long term memory. When talking about multiple intraday moves, it is unlikely that long term memory is being considered.