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Strategies & Market Trends : Technical Analysis- Indicators & Systems -- Ignore unavailable to you. Want to Upgrade?

To: Mark who wrote (3145)	4/24/1998 10:41:00 AM
From: Spots	Read Replies (1) \| Respond to of 3325

As I said to David, I was making an analogy which might be a good way to learn more if followed through. I don't expect anything to come of it (except my own understanding). That said, no I didn't have a steady-state model in mind; I was specifically thinking about trying to formulate a dynamical model to see if one could obtain any predictive power for short-term, local price moves. (Again, I don't buy it; the primary purpose was to give myself a framework for learning. Any useful results would be a complete surprise to me.) At first I had simple analogies in mind such as price (position), volume (mass), demand (force). These would have to be set against a background of the total market and sector movements, as well as continuous fluctuations. The physical analogy might be a valuable particles in water subject to ebbing and flowing tides (market, sector), subject to brownian motion (random local fluctuations), and on top of that outside forces applied to particles or classes of simlar particles. Pretty whimsical, huh? To a first approximation, you would ignore the "tides" and smooth out the brownian motion to try to determine the forces at work from the number of particles moved (volume), from which you might predict the immediate future movement. Maybe. Or something like that. I'm stuck about there at the moment and have not had a stretch of time at a whack to work at it much beyond this sort of whimsical stuff. I can already see it's not right -- doesn't incorporate enough history. Like I said, the point isn't to be right it's to provide a framework to learn in. Still, eventually I will impose it on the thread if anything sensible comes out of it, even sensible failure <ggg>. Spots