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     stoian
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Username: stoian
Post Number: 1
Registered: 03-2004Rating: N/A
Votes: 0
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| | Monday, March 08, 2004 - 11:10 pm: | 
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Introduction
Everybody wants to be a trader. A person like that, wants to buy goods for a price, and in a short time after that, to sell them for another price, which it has to be so high as posible, so that he makes the best gains.
To be sure about realising the gains and that also in a very short time, the trader needs to know at first, in which direction and how fast is the price moving on the market. Not only the buyer price, but also the seller price. If the buyer price goes higher then that from the beginning of his first transaction, at the second time the trader must give more from his gains, maybe all the gains from his first transaction. To avoid in the future a situation like that, the trader must keep permanent contact with the market. That means, it is only posible to know at the most, the next day price or the next week price.
But our trader wants to see more in the future about his virtual or real gains. Maybe he wants to plan his available funds in many directions, because he also need to do another things too, then only doing such transactions, or perhaps he simple needs to know how the price appears on the next 3, 4 or even 5 years, because if the price is going only higher, that can affect in bad the gains he made until yet, and that means our trader had worked for nothing all this years. In case that he wants to do a single rotation of his capital in the time horizont as 3, 4, or 5 years, than the average yearly gain is indeed certain but not satisfactory such as a bank deposit.
Therefore our trader needs a forecast for the price, or to have a prognosis or a projection in time for the posible price in the future. What can he do? He knows. To predict the future he needs to know very good the history. Therefore he need to know at first a history for the prices he works with. He will easly find a confident history for the prices in his accounting documents or from another confident sources also.
Content
The trader is familiar with the theory of probabilityes, statistics and the math. From the math, the part about the analyse of the time series and the part about the mathematic functions.
With the history of the price levels measured and registered in time (nothing else as a time series), he estimates the very probable interval the price can exist within, therefore the confidence limits for/of the interval, the lowest and the highest limit. The limits are guaranteed by the law for repartition/distribution of frequencies in appearance of certain events forwarded from Gauss-Laplace.
He will do this estimation in wholly concordance with the discreetly place of the real mean (or the median value) for this interval and with the calculated standard deviation within the series.
With the help of the real mean, he builds the theoretical function which fits the best with the empirical one, therefore the indicator R-squared has to be the greatest which is posible to found, when he investigates the correlation between the two functions. The Excel chart will be more expresive for the fact, that our trader is on the right track with his estimated trendline, and also shows when the trendline is interrupted.
He is also knowing yet and have before his eyes, the measure of the probable risk of increase/decrease. He is able yet, not only to identify and to compare with the present time, when the best moments to place his money (to buy harder) are, or to leave the position at the highest level (to sell harder), but also if it`s even posible to speculate for a period of time (on growth trend or even on decrease trend, to sell in a certain moment and to buy later).
With the calculated error for the representativity wihtin a sample (which is the grouping step) he will allways know the volume of the sample and he will build price groupes/clases and time groupes/clases, to investigate and identify the price modal clases for each subperiod of the whole time (in a double inputs table), therefore he will know even the most aproximative distribution/repartition in the probability of producing a certain price level (called expected event) within the price sample for each time subperiod (time sample).
Conclusions
This is a model for “know how” to do a scientific market research and about the applied mathematic principles for the market forecast and serves to assist and to control if the taked decisions where right, in activities like the management of the assets within a portofolio.
What kind of theory for market research are using you and what your forecast experience tolds? After reading this material, are you further sure about that you have learned until yet, that the prices are moving free and unpredictible on the market? Or I convince you yet, that the movings of the price are under the control of the market supervisors and therefore is posible to make relevant predictions? Do you know which are the maximum fluctuations limits for the daily price aproved, allowed and mentioned to the public/to the potential investors by the market supervisors, and what is happening when the market actors tend to broke this limits (of +/-15% about the daily reference price)? The market supervisors are closing very quickly the market for an indefinite period.
Now, if you are sure yet to understanding my demonstration in knowing how to assume a calculated risk, then you are able to proceed on a wisely way in investing or speculating with your available money or assets.
If you are interested in more detailed informations about this model, please contact mister Dumitru Stoian at stoiandoru@pcnet.ro or stoian@flash.ro
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stoian
Member
Username: stoian
Post Number: 3
Registered: 03-2004Rating: N/A
Votes: 0
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| | Tuesday, March 09, 2004 - 08:11 pm: |
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Thanks for your welcome wishes Pilgrim, but what a rating will you give me, for the content of my story "Everybody wants to be a trader"?
I have worked many years, to understand in wich way I have to explain - at first to myself - what kind of analyse must be done and how it works concretely, and after that to can give to the interested people, a concrete exemple(even from they life, not from mine), not only to talk or write about theoretical things whit out an example in this reason, like many persons doing.
In the fact, I incite/challenge every people of this forum, to questioning me about how I see the things they are interested within, and not to show them personal things of mine. I want to show to the people I can give them help. When someone of the helped people, wants to recognise my hand of help, that makes me feeling powerful, even if in the eyes from some other people I am not the kind, especially when they do the best that they can to stoping me giving to the people help.
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pilgrim
Member
Username: pilgrim
Post Number: 12
Registered: 01-2004Rating: N/A
Votes: 0
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| | Tuesday, March 09, 2004 - 09:29 pm: |
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Hi Stoian,
I couldn't open your file so don't know what it contains.
The contents of "Everybody wants to be a trader" is a bit behond me, I'm very simple not a mathematician so must keep everything simple.
If the price is rising maybe go long, depends on the risk between entry and stop loss and how large a position I can take within my risk limits.
One thing is sure that I don't know what will happen tomorrow let alone in days or weeks, all I can do is be there when something does happen,get on and stay with it as long as I can.
Won't always work but as the saying goes if you keep the losses small and winners large, you only need one good winner for several small losers and you will come out ahead or at least stay in business.
It may be simple but that's the way its got to be with me.
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stoian
Member
Username: stoian
Post Number: 4
Registered: 03-2004Rating: N/A
Votes: 0
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| | Wednesday, March 10, 2004 - 05:45 am: |
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Hi Pilgrim,
As I posted the message, I verified that the Excel file will open. This second time it works again. Maybe you have to wait more seconds, or to ask the moderator what is happend and if he can help you. Unless the excel file with the chart in it, you will not understand all the explanations in my story, about how and why the trader acts like he did.
In fewe words I try to tell you, because like you said, you are not a matematician, that a prediction it is posible for the reason the capital market, at the most the forex market, are controlled and directioned markets for the prices and also for quantityes, by many commissions and committees. If they do so, than they have to recognise in time the effects they are waiting, the market responses.
Therefore they use the results of the science to controll the market like any other pheaenomena, like mathematic instruments and statistical procedures. Statistic is from her complete definition, an instrument for:1) to pick up informations;2) to group the information using certain criteries of grouping (like the standard deviation wich is the measure of the admitted risk,3)interpreting the manifestation from the market participants untill the present moment, and after that 4)they take decisions to influences the phaenomen (the market, to go up or to go down with the price on the market like they want). You will see with own eyes in my chart the trend and also the risk intervall for the price in immediate time or later.
To understand for themselfes what they did on the market after they made the interventions, in wich direction should the price going after this, only the mathematical models can help/serve them in the analyses.
For this reason i said, accurate predictions for short time are very possible. You need only to know how a prediction is correctly made, and this is posible only with the science of math and statistics.
But what are we doing, when nobody is interested to teach us something like that. I say that, because I can demonstrate that. In all the books an manuals i read until yet, and I read many in german language, romanian and english. I understand very good english, but because I not practice often to write in english, I have problems with the writing. The german language I have learned from my mother very good too, because she is a german, and the romanian from my father. I tell you all that things, to beleve me I have a very good capacity to understand when someone tryes to explain me about everything, maybe.
I worked seven years to discover and understand how the statistical instruments are functioning and what can mathematic help with.
I have the capacity yet, to explain and to teach to anyone who is interested and give him concrete examples in what way should explaind phaenomens, phaenomens proposed from him and not from that what is choosen from me, to demonstrate the theory.
I am exhausted yet trying to write in english, and like you said, maybe for nothing at the last, because the people will anyway do what they want to do. For the people important is to be in a live, not the quality of life. What counts is to stay in bussines. I am sorry to grieve you. You was so good to me. I did that, because I have the strong beleving the people does not resignate in front of hard evidence, but to fight for a better life.}
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stoian
Member
Username: stoian
Post Number: 5
Registered: 03-2004Rating: N/A
Votes: 0
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| | Saturday, May 22, 2004 - 02:59 am: |
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Hi Colin,
You remember certainly, what i told you in February about the fact the EUR goes down against the USD. At that time i was not able to prove that asumption, but yet, because i have many historical data, it is posible to show on a chart, that the regresion and prognosis are very fine one.
You can see the probable trendline and volatility(as an whole period average of +/-0,075 units or +/-7,5%, for a calculated probability in producing of this risk of increase/decrease of +/-15%). The calculated volume of needed observations is 941, very nearly from the beginning of our phaenomena, since the launch of the currency EUR on the market.
Doru Stoian
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stoian
Member
Username: stoian
Post Number: 6
Registered: 03-2004Rating: N/A
Votes: 0
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| | Tuesday, June 01, 2004 - 05:27 am: |
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Hi Colin,
Hi Hilarious,
Like I told before, the volume of the sample that was needed, was 941 observations. At that time I had only 465 observations. Yet I have 1145 observations, because I was on the site of the Federal Reserve and i picked up more observations. I was afraid earlyer, but it comes really true now, that my hypothesis (that i have ready told to some people, like the professor Albach from the Royal Swedish Academy))about the real mean for the title EUR/USD, is to high to be correct also, at 1.10 USD for one EUR as a fundamental reference for the world economy.
Only the ECU, that was an account currency (therefore an ideal currency) and not a market currency, like the EUR becomes, was stronger as the USD, but only as an ideal one. But maybe, the Deutsche Bank already knows better the way, because she already said, the parity for the title EUR/USD, will be at the end of the year 2004 near 1.30. At that time I was not able to beleve it, but I beleve yet and I tell this yet to all of you.
When Hilarious already picked up the 941 observations, he was able to find all that i have told him (and to you) until yet, more quickly as i was.
A lesson that i learned: The estimation error must applied for the limits of the interval for the trendline and not for the lowest and highest values.
Doru
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stoian
Member
Username: stoian
Post Number: 7
Registered: 03-2004Rating: N/A
Votes: 0
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| | Tuesday, June 15, 2004 - 10:22 pm: |
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I do not want to comment malicious interpretations, about the kind of my explanations in the interest of all people as beginners for trading transactions, made till an end (a happy one) in a very comprehensive and popular language.
But because I declared to accept any challenge, I am continuing to explain again in the same reason/direction, but with other words.
Every people, and you also, lives his own life - more or less consciousness/aware - in accordance/obedience of different rules or laws. He obeys his own rules or other people rules/laws.
In the same reason/direction/sense, things are going on with every market.
Therefore we all have only two choices:
1) to belive that it really gives a law to obey;
or ,
2) do not beleve, that it gives a law to obey.
An answer to solve the both choices:
1) If we beleve that somebody conducts the market and makes his rules on this market, than we have to understand how it works, and mathematicians will help us;
2) Even if we do not want to beleve it, mathematicians can help us again.
The answer to the question how is help looking like, is coming to us from the theory of probabilities (for both situations). And when somebody does not agree any names like Gauss or Laplace, than he will not understand the help he needs.
But I will try again to explain for you.
For example: Everybody wants to win money, on the capital market, on the forex market or elsewhere. To win (or to lose) money is a matter of chances. And in the same reason, but explained in other words, nothing else as the matter of a mathematic discipline named the Theory of Probabilityes.
To work with the chances/probabilityes, we will need to know a history of the “game” we want to play. But, what kind of events we have to take in our consideration and how long should be the history?
Answer: It depends how big, how quick/slow and with what/how certitude/probably should be our win registrated. A big and sure win needs a longer time to be realized. With other words, it depends on our “waitings” or expectations generated by our imagination. We should really let our imagination to play and to “guess” what kind of results are giving away, or should we calculate and predict our chances/probabilities on a scientific/mathematic way?
Traders or people who are convinced yet of the need to learn and use the help of probabilityes are warmly waited. Both address are real: stoian@flash.ro or stoiandoru@pcnet.ro
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stoian
Member
Username: stoian
Post Number: 8
Registered: 03-2004Rating: N/A
Votes: 0
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| | Friday, June 18, 2004 - 07:57 pm: |
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Important explanations for forumers to the post “Everyone wanna be a trader”
My first name is Dumitru. Acquaintance and friends calling me Doru. Maybe it's easyer so for all.
Answers to your posible questions:
1) I hope, you will never give me for free the advise, investing a certain volume of money on the Romanian capital market, that makes gaines an equivalent for a weekly or monthly wage.
For Romania this is a great risk to invest in any assets expressed in the national currency LEU (excepting the real estate, which is alone connected on the real market). It is calling the currency risk and have an exponential tendency. In 1990 was 1 US$ the equivalent of 12 LEU. Today 1 US$ worths 34.000 LEU.
From July 1997 I placed on the Romanian stock market (in shares) the equivalent in LEU of 1.000 US$, which it means: 1.000 US$ * 8.000 LEU/US$ = 8 Millions LEU.
All the time, from July 1997 until nowadays, I have worked (rotate from a title/share to another) only that initial capital of 8 Million LEU. I have never arise the value of my portfolio with supplementary capital brought from home/wages/other sources. I acted only like a good trader/capitalist.
Nowaday I own 4.000 shares of the company IMPACT DEVELOPER AND CONTRACTOR (who acts building and trading real estate) in my portfolio worthing 22 Millions LEU (the yesterday price of 5.500 LEU/share), purchased 2 month ago with 4.900 LEU/share).
From the beginning in July 1997 until yet, the gains in LEU are meaning: 22 Milions – 8 Millions = 14 Millions. A yield of 175 %, or 25% per year. But you have to take a greater yield into consideration because I have nothing mentioned about the collected dividends for all this 7 years or about the cash I have removed from my portfolio (tithed of/after taxation). Accumulated dividends and the cash I drawed out from portfolio can mean another 10 Millions LEU.
Therefore 22 Millions + 10 Millions = 32 Millions. But 1.000 US$ are worthing yet 34 Millions. The real gain is a real Loss (with a great and loud “L”) of 2 Millions LEU (or nearly 58 US$), after 7 years of work with “success, on the paper”. Would somebody dare to say it was never a success an yield over 25% for a year (by LEU)?
2) The monthly wage (average, after taxation, including the money for clothes/holidays, a.s.o.) of an average bank clerk in Romania (who works from 8.00 a.m. to 8.00 p.m.) was and remains until today the equivalent of 300 US$/month. The real cost of living (thanks to the “Integration” of Romania beside the EU or NATO countries) is the same like for the people living in those countries. Therefore the quality of life will be (like numbers are showing us) for 10 times lower, but in the reality is 100 times badly.
I do not want to comment/criticize any policy. The single thing I want is to make a better life for me and my family. And I hope a day it will become true because I am working tireless for it and because I keep on helping other people with my experience.
Best regards,
Doru
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stoian
Member
Username: stoian
Post Number: 9
Registered: 03-2004Rating: N/A
Votes: 0
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| | Saturday, June 19, 2004 - 05:36 am: |
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Dear traders/actors on the capital market,
Imaginate and bring in front of your eyes, your concrete steps on the market. You buy a stock after a recommendation (heard from the news, from your broker) or after analyzing yourself:
1) the fundamentals of the respective stock = if is a solid company, good leaded, with a daily high changed volume of stocks;
2) if the price should be going up in the next time = you do only a part of the technical analyze, which includes unfortunately only the chart analyze, and nothing about the really technical part of the analyze called the statistical analyze.
After you have done this steps, you can be lucky and win the waited/expected money or not. If you want to repeat (is normal for everyone) the last action with the same stock, maybe it will be working for a while, but not often enough as you want.
That problem comes from the fluctuations of the price that you have not expected/predicted. It means your expectation/prediction is not synchronised with the movement of the price. At this stage, the synchronization exists only in your imagination, because you wish so and not because this is true or at least to have the chance to become true.
But only a statistical analyze, together with the chart analyze will help you.
Statistics (or history) helps/learns you to recognize and to seek/find the possible/probable upper and lower limits of the long term trend (called also the general trend) and about the variation/volatility (also between a lower and upper limit) that is manifesting as movements on the both sides of the long term trend, which is called the short term trend. The long term trendline shows us (like her name said) the general tendency of price for the whole time period you have picked up, and will be represented on the chart through a most straight line that goes generally upwards or downwards. The short term trendline shows the evolution/tendency/trendline for subperiods of the whole time you have picked up and could be represented on chart through a complicated/sophisticated and very often curved line and not through a smooth one, like the long term trend line is. Often this trend line is not used, is more imaginative (but with the mobile average function you can represent it on chart for sub period of time).
Medium term means a period of time between 1 and 3 years (in some countries 5). Long term means over 3 (or 5) years. Short term means a period under 1 year. Loud definitions of the financial theory.
Therefore, to be confident with your chart analyze and to take a very probable good decision (about the best possible/probable moment to buy under the trend or to sell over the trend), you have to start with a maximum of information about the past evolution (history) of the price for the stock you are interested in, to make so the minimum of mistakes in your estimations about the confident trendline.
When you want to represent on a chart a very confident trend line, you have to do this in accordance with the “best fit” principle. With an estimation function (Excel charts) you design the trend line that it fits the best with your empirical curve (for the greatest positive R-squared coefficient. A level of the R-squared coefficient about nil, shows us that no concordance/correlation exists between the empirical curve and her estimative one. But that means not that the trend line is no confident to us about the limits of the interval of fluctuations/variations).
The essential functions to estimate the “most appropriate trend line”, are the polynomial function and the exponential function. Each of these two functions modelates/helps you at first theoretically to understand and describe “the law” of evolution/tendency whereupon obeys practically most of the existing phaenomena.
The polynomial function is appropriate to estimate the trend line for a phaenomena, where cumulated events for a specific time period alternates, and can and must be “catched” on our chart (with the upper an lower limits) so that this obtained image discloses us the relevant, past and future possible/probable evolution of the long term trend and the volatility/fluctuation/risk that occurs from time to time (on short term) with an average known probability of +/-15%.
The exponential function describes only increasing phaenomena that is evolving only upwards in time. At the beginning (means often for medium time) the increase is slow and after that will be always higher in time. Here can we also see the measure (the probabilized one) of the volatility/variation/fluctuation, called also risk of increase/decrease on short time.
Thanks for reading,
Doru
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stoian
Member
Username: stoian
Post Number: 11
Registered: 03-2004Rating: N/A
Votes: 0
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| | Monday, May 23, 2005 - 07:47 pm: |
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ingot54
Member
Username: ingot54
Post Number: 457
Registered: 05-2004Rating: N/A
Votes: 0
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| | Tuesday, May 24, 2005 - 02:48 am: |
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Stoian, I have been reading your posts and enjoy the theories of probabilities you employ to make your conclusions.
The last link doesn't seem to be working :
Forecast with Statistical and Mathematical Analyse
forecast eur-usd untill 2005 year`s end.htm (11.4 k)
I am getting this message from my computer :
"HTTP 404 - File not found. This page cannot be found. The page you are looking for might have been removed, had its name changed, or is temporarily unavailable."
Is it possible for you to actually post the charts on the forum without using links to your work? I am certain if you do this, you will stimulate many others to observe what you are doing, and you will receive the interest of many readers of the forum.
If you save the image as .png or .bmp you can upload the image for posting on the forum.
Alternately, you could save a "screen image" of your data/charts/graphs as .png or .bmp and upload those in the same way, with your posts.
Please continue to post this very interesting information.
Kind | |
Closed: New threads not accepted on this page
Excel file with chart and a table
Forecast with Statistical and Mathematical Analyse