Basic Relativity theory tells us that the further away from and the greater the velocity of travel that one gets from a fixed observer at one's point of origin then the greater the effect of 'Time Dilation'. The effects are not really noticeable until you reach approximately 40% of the speed of light.

The theoretical effects of time dilation can be 'calculated' (perhaps approximated is a better term) using something like this;

Dilated time = stationary time multiplied by the square root of (1 minus [velocity squared divided by the speed of light squared])

For the purposes of this post I shall not complicate matters by introducing a proximate gravitational mass.

Something quite different is happening in markets in my opinion. I believe that the further away from a reference point ( let's say the 'open' ) we are and the faster that the price is travelling, then, in contradiction to Relativity in the SpaceTime world– time SPEEDS UP, relative to the price action at the open.

Often, a large proportion of the magnitude of a move from (say) the open to the subsequent low (say) of the session occurs in the culminating few minutes of the time elapsed from the open to the time of the low. So, for example, the SPU may open at 2077.75, spend 4 hours working its way to a low at 2069.75 but 4 of the 8 point decline might occur in the final 3 (for eg.) minutes of the decline.

It is in that sense that it feels, to me, that time speeds up in these final few minutes relative to the minutes after the open. There is absolutely no reason why relativity should hold in this context so perhaps my perception of time is not at all unusual. (Author's note - all this talk of 'feelings' is making me queasy. Ha!)

Next time you are watching a market pull away from its opening price in an accelerating fashion then watch a minute by minute chart and if the price develops as I set out above ( with most of the move occurring in the last few minutes of the swing ) then I think you will also experience this idea of the 'blowoff' price action that concludes the move in the last few minutes happening more quickly than quiet price action around the open or whatever reference price you like.

Relativity joins a long list of concepts (exogenous to the mechanics of the markets themselves) that must be adapted in some way if one wants to apply some facet of it to distributions of prices of assets and liabilities in the financial and other markets.

Sushil Kedia writes: 

By the definition of Dilated Time cited here, its values can range from zero to stationery time, when respectively velocity is equal to that of light or the velocity is zero.

In other words there is no time dilation if any thing is traveling at the speed of light and the dilation of time is the same value as the stationery time if any object is stationery.

Time, it has been discussed variously on the list(s) before is an entity undefinable without involving self-referential terms. I have argued in the past that time is an entity that provides a measurement of the separatedness of events and objects.

Blackholes do not have any separatedness and therefore there is no time either in that non-space. The universe on the other hand is an unending expanse still growing and there is time as well as space in it.

The Theory of Relativity, to my "mind", is as much a powerful leap in the Cognitive Sciences as much as in Physics. The so called bends of the space-time-continuum and the endless related ideas of time dilation are cognitive constructs and also explain the cognitive limitations of "intelligent design", "intelligence" & even "intellect".

Having laid these few simplified working terms, I return back to the core of this post. Is the trading pit outside the realm of this universe and if indeed there is anything happening that is not part of the universe, as postulated by James? I strongly doubt, since the universe or anything else that a human mind can observe, including the trading pit, is what our individual cognitions are. The reality is only what each is perceiving it to be! The example of the star 4 light years apart I placed in a recent post illustrates this point.

For a moment, think of it another way, what are Lobogalas? If a sharp quick ephemeral (time frames are a matter of choice and time is most fungible construct apart from being the most illusive construct human mind knows) move happens as described by James, that seems to be outside and in fact the opposite of how things happen in the universe, then is it a regularity or an irregularity?

I would like to shoot that it is an irregularity, there is money to be made by fading it and those who count & test do make money from such moves in this manner. 

anonymous writes: 

I know nothing about the theory of relativity, but it seems to me that when the Greeks began to wonder about the forces of nature (physics), Greeks wanted to study exactly the natural forces.

(The Greeks who now they want out of the euro– the style now used by 'ISIS in erasing the traces of other civilizations).

These markets are anything but natural, are totally and deliberately manipulated. in this sense, trying the accused, a reference point, I would observe only the liquidity injections, foreign body (by central banks) and rates.

Financial markets would be simple… but you can't control a system designed on purpose to move the perception of risk. This has nothing to do with the natural forces. Without considering HFT that subtracts wealth like a leech on the pretext of providing liquidity to the system.





Speak your mind

2 Comments so far

  1. douglas roberts dimick on April 24, 2015 7:25 am

    Quantitative Relativity

    Anonymous’s comment… “but you can’t control a system designed on purpose to move the perception of risk. This has nothing to do with the natural forces…” invites discussion of the implied assumption concerning theories of chaos and order in our universe… does it not?

    Perception of risk cannot be translated from special or general precepts of relativity both as theory and science?

    Be it speculator or investor or trader, is the objective to “control a system” or measure it relative to a system of coordinates that allows one to correlate (non)directional energy (patterns, if you will).

    As we have allegedly “evolved” from fundamental to technical to quantitative analysis of (electronic) market exchanges, it appears the next step is understanding how the mathematical space of (algorithmic) quantitative analysis is governed by sanctioned (or rules-based) properties elemental in the nature of this human endeavor.

    As Victor has aptly demonstrated over the years here at daspec, there are all the human aspects from which one can approach this scientific inquiry. For example, biologic analogies relevant to your observation about “a system designed on purpose to move the perception of risk” would include close and open systems — see studies of immune systems.

    The Theory of Quantitative Relativity advances that closed systems of exchange operating in financial markets are based on an ecological numeric hierarchy; therefore, (non)linear mapping of (non)direction indications exhibit TVS (or topological vector spaces) domains that converge and diverge, constituting a metacircularity of state transitions.

    Accordingly, in your noted instance where perception of risk is recognized in or resulting with a given price action, mass and energy as so translated into market structure and mechanics, well,… positioning of a given trade or investment becomes relative to speed (or time).


    If one considers the list of fallacies, the notion of “false equivalence” appears as a shining star. My reviews of such may be best demonstrated by trading programs and systems that aim to control or manage risk by coordinating divergence and convergence with Fibonacci sequencing. If V was to pipe in here, suspect he would say that one may find a number if one looks for it — the phenomenon is discussed in cult classic movie Pi…


    Point being… people are looking for numbers when the controlling indicator involves laws which govern the “game board” — as Max’s prof retorts with his example of the Japanese Go game when saying… “you are no longer a mathematician, you’re a numerologist.”


  2. Armanda Hetcher on March 25, 2016 12:27 am

    Hi Lazlo,Thank you for your comments! It’s true the implementation does not consider normal direction, but I said up front that this would be one of the simplifying assumptions. It isn’t too difficult to modify the code deal with either multiple block types or different normal directions. What you would do is modify the array called “mask” in the code to store an integer value which encodes the type of each block. You’d need at least 1 bit for orientation, and then you could use the rest to store block color or whatever. Then when you build the greedy quad, you store the type of the block you are scanning over and only group blocks which are the same type together. I don’t think it should be too difficult to modify the code to handle these situations. If there is enough demand I could put together another demo showing how this works (for 3 block types for example.)What I am more concerned about is the possibility that there might be a bug in the code. Can you take a screen shot of a situation where it fails? I’ve not found any bugs in my testing, but if you could show me where things go wrong I might be able to fix it.


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