Market and quantum effect...

Discussion in 'Technical Analysis' started by harrytrader, Oct 1, 2003.

  1. In 1900 Planck inadvertendly discovered the so called Planck constant h: chocking horror for him since he was an advocate for continuity and infinity :D ! So nature is discrete or "quantumic".
    What about stock market ? Since a picture is worth a thousand words let's look at today's session for example. But to see this quantum effect one must remember the central concept for my model about the crossing of the two lines (extracted from http://www.econometric-wave.com):

    "A minimum or a maximum on projection line (interpreted as target line in green color) and their dual(*) on base line (interpreted as consolidation line in blue color) are important turning points for the market for that scale and under. By rule extension points around <B><FONT COLOR=BLUE>the crossing of the two lines are also important turning points</FONT></B>. "

    Today the crossing was at 9464 (see "cross-pattern" label on the picture) but it prefers to make a high near the point value near the next blue point theorical value of 9473.81 (real top 9472.69).

    Not only the super top of the day was made near the theorical point but in fact all the successive Higher High (HH) were around the theorical points most of them within 2 points except for the 4th HH one where the error is 4 points - which is frequent when the theorical value constitutes later a great break zone.

    <IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=342007>
     
  2. ...you probably do not know this, but we the loyal opposition have a strict rotational schedule of who will harrass you when. It's my turn on this post. I looked at your site and read many of your references, but I am unable to comprehand what you mean. Would you throw a little math at me? I can take it. I studied quantum theory back when I used to be smart and did my share of solutions to Schrodinger's wave equation for benign boundary conditions. If the market is a quantum phenomenon, what's the partial differential equation for it, and for what boundary conditions do you get these solutions? I can ask in another language if that would help. Best regards. - Mike

    Oh, and by the way, get your science history straight. Planck did not 'inadvertently" discover quantum theory. It was the only mathematical solution in vibrational/rotational mechanics for explaining the phenomenon of blackbody radiation. Elegant and brilliant, yes, an accident, no.
     
  3. PetaDollar

    PetaDollar Moderator

    The stock market is quantized in pennies (0.01) just like money. The SPoos are quantized in 0.10 and the ES in 0.25.
    Time in the market is quantized by individual trades. What's the big deal? The heart of QM is modeling nature with waves and govering their dynamics with a Hamiltonian. Not much to do with buying low and selling high.
     
  4. maxpi

    maxpi

    I knew this was a Harrytrader thread when I saw the title but I clicked on it anyhow. Oh well, I'm this far with it.... Harry, are you saying that the new highs are somehow proportional to the dips in an uptrending market??

    :confused:
     
  5. ...I think I am in serious danger of getting in over my head, because unlike Harry, you seem to know what you are talking about. Theoretical physicist? My objection is that the quanta of tics and pennies are arbitrary by fiat (just like money), not market driven. Did you ever trade QQQ on Island before the pricks effectively shut it down? The inside quotes went to five decimal places in a frenzy to get orders filled. That's effectively continuous.

    Regarding orders, I don't think that's a quantum phenomenon because quantum phenomena have rigid sequences of allowed values. (Sorry, you can't place your order until the next interval times in?)

    You and I agree on one thing I think: if it's mathematical, show me the equation(s) and specify the boundary and/or initial conditions. That was my question of Harry. Peter, do YOU think a QM-like model has validity? Anyway, I love an argument, even if you win! Best regards. - Mike
     
  6. I said on my homepage that I didn't inject any Golden ratio in my equations because it would be an adhoc hypothesis which would be irrational if I take it as prior. The same for quantum effect: I didn't inspire from Quantum Physics at all for why should I think that Market is quantumic ? I modelise the market without any a priori hypothesis, in fact I didn't believe that Market has any quantumic effect.

    As for the equations it will stay secret of course : do you want me to reveal the secret of Universe :D. What I can tell is that it doesn't look at all like Schödinger's equation and that there is no hypothesis of wave adhoc in my hypothesis as I said. That's why I said that using Schrödinger equation to justify the quantumic effect in Stock Market is abusive generalisation. Nevertheless there is some sort of quantumic (discrete) effect in stock market but that has nothing to do with Schrödinger equation. That is to say someone who would try to model stock market by inspiring from Schrödinger's equation would probably stay in front of a wall for a very long if not endless time before getting any result :D. I always said Analogy is useful as Metaphore but dangerous as Generalisation. Many people want to generalise Quantum Physics to Stock Market I don't agree although as I have shown there is some quantum effect but it is only an analogy of form.

    I said 'inadvertently" as a joke because it is a question of paradigm: for those who consider that Nature is discrete and that continuity is a pure concept and even sometimes conveniency it is not astonishing. On the contrary Bertrand Russell think than the Real World can be conceived from Mathematics, that infinity is real, whereas Poincarré has an opposite point of view. The two paradigms have opposed at that time through these two personnalities and it still continue today.

     
  7. The QM model has NO VALIDITY in stock market in my opinion, I have already said it in the past vehemently and I continue to say it see above. Stock Market has nevertheless a quantum (in the sense discrete) effect - see also another explanation in next thread. To show a difference it doesn't have the UNCERTAINTY PRINCIPLE that is attached with the QM model. I'm not talking about the QM model per se I am talking about a restricted aspect of nature phenomena that can be found also in QM. An analogy is an analogy and is not to be confused with an equivalence. I didn't say that the stock market model equations I have has an analogy with QM Schrödinger model IT HASN'T and those who would naïvely think so as I said above would hurt their head against a wall by trying to model the stock market by analogy with QM model per se.

    QM has not the monopoly of quantum effect : an effect can have multiple causes. One could even inverse the question and ask: could QM inspire from my equations to solve the paradox of Universe between continuity and discretion of nature :D.

     
  8. I don't talk about dips and proportionality or where exactly ? I only underline the fact that the Higher Highs, contrary to EVT (Extreme Value Theory) in stochastic modelisation - used as what is considered as advanced tool today for estimating risk in stock market today - can be very precise: it is due to the fact that the high is attracted by a point that is marked by the "time" axis (I put time in parenthesis because the nature of this "time" is only apparency - so one day I should answer the question: what is time at least in stock market :) ) when this time is an <B><FONT COLOR=BLUE>INTEGER</FONT></B> that is to say it WON'T "naturally" stop ANYWHERE within a segment between two points at ANY "time" - which should be possible since the equation is continious - it would rather "prefer" to stop at the end of the segment that is to say at an <B><FONT COLOR=BLUE>INTEGER</FONT></B> "time", so the "discrete" or quantum effect as opposed to continuity induced by the form of the equations.

     
  9. Every number used by human activities is also quantified by the number of bits of a computer that limits the precision of a number :D. I don't talk about this trivial quantification of course - although it is not as trivial if one looks at paradigm level but this would be another subject. And I didn't talk about using the QM model for stock market, I talk about the quantum effect that burst whereas my EQUATIONS of stock market are normally CONTINIOUS that is too say the high could be anywhere between the segment of two points and even around the segment. Instead they tend to be attracted by a point that is associated with an <B><FONT COLOR=BLUE>INTEGER</FONT></B> "time" on x axis. It is the presence of these attractions towards <B><FONT COLOR=BLUE>"INTEGER TIME"</FONT></B> (I put "TIME" between quotes because it is an abstract time at the origin this "time" was not even a prior in my hypothesis: I didn't introduce time, it is as if an abstract "time" burst spontaneously without my willing as an artefact into "reality" through the results of my equations - I know it begins to become oddly philosophical but what I can do things are as they are and words are limited proxies for thought to express "reality" - oh BTW remember my question as a joke "Is reality concrete or abstract ?" http://www.elitetrader.com/vb/showthread.php?s=&threadid=19888&highlight=concrete+or+abstract :D).

     
  10. Well, it was not the "only math solution". Physics always has solutions, waiting for a better one. It was merely a curve fitting and the "quantum" function was the optimal. Plank asked the repetition of the experimental measurements, again and again, he knew the math solution but it was against his scientific perspectives. [I think he was forced to present the innovative solution...]
    BTW, do you know the meaning of your username "hypostomus" ?
     
    #10     Oct 2, 2003