Power Law and Fibonacci from Sornette and Bouchaud

Physics is actually a very weird and wacky science. You might pick up a copy of "The Elegant Universe" if you are not convinced.

But you are right - physics and trading are two completely separate disciplines, although you might find that ideas in one could lead to inspiration in another.

 

Many people will disagree with me but my opinion is that for typical traders - people trading average account sizes - you should use very simple trading models.

Simply watching volume and price, and your measure of volatility within these, combined with a couple of moving averages - and/or other measures of trend - is really all you need.

Just basic TA principles .....

 

CalTrader,

you are right of course - I am looking at 50,000ft issues that have little impact on day to day trading.

It is only when you manage an army of people and capital that they start to really matter.

Any pointers on papers would still be appreciate though.

 

http://www.brint.com/Systems.htm

 

A group I correspond with is this one http://order.ph.utexas.edu/
with more specifically http://order.ph.utexas.edu/research/
the chaos in NN systems. Science and the markets are related, to say they aren't is like saying humans don't follow the laws of physics, guess again.

 

link

http://www.nature.com/nsu/020923/020923-18.html

 

Thunderdog wrote:

> Physics is a pure science - a hard science. The study of markets
> is a soft "science" - a social "science."

A lot of econophysics (e.g. quantum theory or chaos theory
applied to markets) seems like quackery to me. Probably
is.

But quants (mathematicians) doing market modeling are not
doing anything less than subsuming technical analysis anyway:

http://www.ballarat.edu.au/ard/itms/CIAO/seekingARCpartners.pdf

thus showing that there is essentially no difference between
quants and TAs (or even fundamentalists, in the form of
rule-based systems). They are just more formal.

 

Exactly. There are a few ideas from the realm of Dynamical Systems theory and related areas that are useful but very few of these concepts can be applied directly to day to day trading - although there are many, many people running billions that would try to sell you otherwise ....

 

Thanks for the link. This analysis is also very old. I guess people think they keep rediscovering it.

nitro

 

We are not talking about general (and fuzzy) quant models but about the Fib presence - about which many quants and others doubt. Also quants models are essential directly towards arbitrage which is very local in space and time and not really targeting prediction in large space and time.