System Based Trading

U

uasish

Guest
#81
Plz avoid Saint's thread,leave it for New members to learn.
kuriakose,
With my common sense i understand modulation may not be desireable becoz in FM we amplify the Signal while transmitting becoz as it distorts while traversing through Noise so enhanced Gain / attenution when after distortion lands up at receiver points there is more clarity.
But here in actual Mkt we want to filter the NOISE from Signal by an ideal 'passband' filter with (no gain/attenuation through out) to get a better through put.
SMA as karthik mentions is FIR (Finite Impulse Response) in general means Finite becoz there is no feed back from impulse to filter.
Mathametically it is a Discrete Distribution (known as Geometric Distribution means a discrete analog of the exponential distribution )
EMA is IIR (Infinite Impulse Response) becoz there is cotinuous feed back from impulse to filter.
Mathametically it is a Exponential Distribution (means a cotinuous analog of the geometric distribution )
Though i personally is not in tune with Karthik becoz in both these Distribution the basic premises
is 'memory less ness ' & i strongly believe Price signals have in built Memory.
So kuriakose your non understanding of Mkt (due to just inexperience nothing else)
1)You want to make more Clear Signals traversing through Noise ,by modulation;
2)We want to extract Clear signals from Noise+ Trend , by Filters.

Hope to interact with you in future as you are having better knowledge than me on these filter issues though i always have our Resident Specialist Qualified Engineer Karthik to fall back upon.

Asish
 
#82
Sorry ashish,

I am a blunt newbie who has not at all done a single trade in market( lack of capital is only reason)

I am waxing my time freely now after my final year xam and got CHIKUN GUNYA and full bed rest. So came to this site actively!

And by the way I AM A MECHANICAL ENGINEERing student!!! :)

As far as I analysed the market signal is very simple and with out noise!!!

It is only a combination of four signals namely OPEN HIGH CLOSE and LOW
These signal propagate through the space called PRICE and causes variation!

Another signal is volume! Sometimes the signal volume interfere with the price signals! I think this is called as SUPPORT and RESISTANCE POINTS!

I was thinking about developing a system! So as per several posts here I made a frame work!

When I analysed the parts of system I looked at the whole information from market. In the first step of all(all most all) systems we shunned OPEN HIGH and LOW information.

We started working on the CLOSE price only. So we filtered the signal on the first place itself and made it a single simple signal!
I could nt believe it! Because how could we get more info from system if we are feeding less info!

The moving on to next steps I found the signals being smoothed! (with MA)
And at the very point we got lags because we lost more info again!

And then we made a condition! When signal 1 interferes with another signal 2 (smoothened forms of the same parent signal) we GET a Binary signal!
Means a DIGITAL wave is formed from the signal!

In all the systems we processed and destroyed the pure market signal!

An the the signal being CYCLIC(markets are cyclic-correct me if wrong) we expect there to be noise in the signal!
But actually there is no noise in the signal itself but it COULD be the interaction of price signal with volume signal that causes distortion and imparts cyclic nature.

I hope it is clear why I dont think there is noise!!!

And there is a post by me ABOUT HEARING THE MARKET in saints thread!!! I didnt saw ur post early. Sorry for that! and making saints thread a mess :)
 
#83
Sorry ashish,

I am a blunt newbie who has not at all done a single trade in market( lack of capital is only reason)

I am waxing my time freely now after my final year xam and got CHIKUN GUNYA and full bed rest. So came to this site actively!

And by the way I AM A MECHANICAL ENGINEERing student!!! :)

As far as I analysed the market signal is very simple and with out noise!!!

It is only a combination of four signals namely OPEN HIGH CLOSE and LOW
These signal propagate through the space called PRICE and causes variation!

Another signal is volume! Sometimes the signal volume interfere with the price signals! I think this is called as SUPPORT and RESISTANCE POINTS!

I was thinking about developing a system! So as per several posts here I made a frame work!

When I analysed the parts of system I looked at the whole information from market. In the first step of all(all most all) systems we shunned OPEN HIGH and LOW information.

We started working on the CLOSE price only. So we filtered the signal on the first place itself and made it a single simple signal!
I could nt believe it! Because how could we get more info from system if we are feeding less info!

The moving on to next steps I found the signals being smoothed! (with MA)
And at the very point we got lags because we lost more info again!

And then we made a condition! When signal 1 interferes with another signal 2 (smoothened forms of the same parent signal) we GET a Binary signal!
Means a DIGITAL wave is formed from the signal!

In all the systems we processed and destroyed the pure market signal!

An the the signal being CYCLIC(markets are cyclic-correct me if wrong) we expect there to be noise in the signal!
But actually there is no noise in the signal itself but it COULD be the interaction of price signal with volume signal that causes distortion and imparts cyclic nature.

I hope it is clear why I dont think there is noise!!!

And there is a post by me ABOUT HEARING THE MARKET in saints thread!!! I didnt saw ur post early. Sorry for that! and making saints thread a mess :)
 
U

uasish

Guest
#84
Your logic is nicely explained ,if you are convinced about the same plz go ahead with your concept.CHIKUN GUNYA has recently been prevalent in kolkata also,take care.It is very heartening to know that your time ,in forced confinement ,is utilized constructively.
All over the globe people with diversified academic exposure has tried to decipher the info embedded in Price & there is also strong advocates regarding the effect of volume on price.
You have zeroed on a vital functional area,plz keep us posted about your findings & logics.
However i still believe Price preceeds volume ,or more appropiate to express myself would be volume follows.I know this will create a uproar,with an unbiased mind why dont you enlighten us the both part of the logic ,there are ample scientific studies done by propagonist of both side,plz look at both side & let us know your findings.
Hope you get well soon.
 
#85
Can u plz tell me pro's and bros where are the noises in the signal!

I am attaching my screen shot of the input signal for my system!!!

Plz help me!

And more silly thing noted! The information from market as EOD data is a somewhat filtered signal!!! I have no tick-tick signal!!! Hopefully oneday I will lay my hands on that!

volume data is scaled in y axis!(factor 1/8000) for easy viewing!

The graph is nothing other than line plot of OHLC and volume! We need to modulated the signal based on some other wave(WHAT THAT WAVE IS? still searching!!!) and hence magnify the wave to meet scale value on y equal to volume!
 

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#86
Ashish bhai,
(hope everybody here are elders, I will be 21 this september)

We need to look at the price and volume as two separate waves!

And one wave causes some effect on other wave in "SOME" form. As far as I know price influence volume and volume influence price.

In a market where the number of trades are high( we got another signal!!! Number of trades :) ) there used to be HEARD mentality. If the small traders see a huge volume increase they do something
(what is that thing? Buy or sell- Inexperienced uneducated fellow here!)

So this causes the price to go up or down!

In other cases when price goes up, the increased number of trades jump up to buy more. So volume increases!

The volume-price relationship is dependent more on number of trades I guess!!!

From what I saw, When a large trader sells in large quantity if one large trader comes in and buy, there is no remarkable effect on both our waves!(price wave and number of trade wave) Only volume wave leaps!

But when the large trader comes in and sells it in pieces(multiple trades), there is considerable effect on prices!

Am I correct! Please look into it. Is there any chance of getting information about the number of trades happened in market!

All these may be folly! Plz correct me if i am wrong. This is my only request to all the active trader looking at his text...

Help me become the next JACK WELCH (losing more hair due to burning midnight oil)....and if possible a small profitable part time trader! :D
 
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U

uasish

Guest
#87
Wow !! you are learning fast,actually i am not so qualified to guide you ,i think bav has made few studies on these things apart from CV ,even Karthik & JDM had made some studies on Price / vol relationship .They would be glad to guide you.
Amazing you are dot on point.
 

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