Discussion in 'Politics' started by Gordon Gekko, Sep 15, 2002.
thats from what'shisname's book, right? The mathematica guy?
Actually, Benoit Mandelbrot wrote a book proving the financial markets were not fractals. I have no idea on wether or not a translation in Englsh is available...
Pronunciation : Buh-no-waaah Mand-el(spanish tone)-bro.
Some(but not all) characteristics of fractals can be observed on any liquid market.
The more liquid a market, the shorter the timeframe on which these characteristics can be observed.
I wont say too much about this, but I started my life as a trader with trades based only on these properties.
Someone daytrades equity index futures out of these properties. Threes year solid track record.
Wolfram is the name. Quite possibly the smartest man on the planet.Of course reading his new book is a stretch (1200 pages in very fine print) without an extensive math or physics background . I seem to recall my first intro to trading was learning about futures traders using Fib (or Lucas ,depending who tells you) retracements and other math tools that was consistent with what we see in nature. I recall an earlier post about how the market is social and not natural ...ha? Are we not all natural social creatures? I digress. The most successful app to CA is in the bond market with increased efficiency and liquidity among very few instruments , but that is something I will change . Maybe a few years from now but trading futures and making money affords me the opportunity to work on this when I want (as the futures are a 24 hour thing).
that the market is social is a very good thing. if it weren't computers would rule it. I thank God it's not.
You are confused. I was talking about natural science vs. social science, and the methodology thereof. Don't kid yourself, there is very little real science here. It's all witchcraft. Games we play to be fooled by randomness (to quote Taleb). Give me evidence that the market isn't completely utterly random. And not that R/S line stuff, because I can give you really nice R/S lines on a random chart generated by random numbers.
Show me that the market is natural - in that it will occur the same way regardless of what we think. That, afterall, is the distinction.
Just like the market is efficient? the market is random from a short time frame, not from a longer time frame. Look, I seem to recall Prechter making a bold prediction (I use prediction loosely) in 1982 about we were going to start a mania and bull market that would knock you off your heels. All you need is a catalyst. In walk Greenie and his way of economic policy of expanding credit at every problem we face. It worked and now every economic problem is underestimated as the solution is just expand credit(including the unqualified )and everything is ok. Now in hindsite you see he was right . Low and behold a new "prediction" of a depression. His work is not based on randomness, but carefull analysis.Are you telling me your genetic makeup doesn't say how good a trader (short temper ,not able to process fast enough, etc)you will be? Science and math is everywhere, the problem is peoples belief systems.How many times have you heard trade what you see not what you think? The scope of seeing math and determinism in the market is beyond this forum (Ph.D. in math by 23 ) so I can't say it in a neat little sound bite. I will say this, the more I explore and learn the dumber I feel as I know there is more work to do.
if the concept of fractals is true, what are some interesting things you could say about the universe? for example, what are some conclusions that you could reach that would make you think, "wow."
Wow, this is a great thread GG...forget whether or not any of it can be applied to trading, the satisfaction from this intellectual debate from people on this forum is rewarding enough. Hey keep it up though, who knows maybe some of these stuff can be figured out by one of you smart guys and make some money off of it, just make sure at that time to share the knowledge with us by writing a book or something. Good trading all!
Look at it this way.
You use a 9bar Moving Average on a Monthly chart. You see a signal that may work.
You use the same MA on a Weekly chart. You see a signal that may work.
You use the same MA on a Daily, and Intraday chart too. You also see a signal that may work.
Will it work?? Dunno
It seems we see fractals everyday. Look at the Nasdaq , it moves on the underlying stocks that make up the index. But many market participants make buy and sell decisions based on the indexes movement. Isn't that a chicken or egg thing? Can the supply and demand of MSFT make you want to go out and buy or sell BGEN? Yet, when there is a ramp job in MSFT , BGEN will not be far behind.I am talking from fundamental reasons of course not trader reasons.But lets say BGEN does ramp and now a fund with a need to sell does(along with a few other biotechs). The next day MSFT goes down as the Nasdaq goes down before it. Mandelbrot was a talented mathematician, but he tended to move on much too quickly from one task to another.If he stayed in the fractal / market frame of mind he may have contributed more to it.
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