Feb
25
A Functional Relation, from Victor Niederhoffer
February 25, 2009 |
A functional relation can be refuted by a vertical line that touches two points on the graph. One wonders how such vertical lines and horizontal lines drawn through graphs of prices could be used to predict subsequent prices.
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Straight Around
When evaluating market situations for constructing market strategies, one might consider plotting three instead of two points for quantifying linear-par-circular intersection(s).
The Theory of Quantitative Relativity (or QR) posits that market position efficacy is determined by congruence of present order (or point of) execution relative to two preceding points assimilating price action as quantified by a given market strategy.
Thus, the indicated x/y axis serves as not the basis for a given “functional relation” (between past and current price action relative to portended results) but instead provides the synchronous framework for correlating state transitions between the metacircularity of (a) rules-based systematics (or output) and (b) indicator and functional parametrics of discrete data sets (or input).
The corresponding geometrics so implied with both (QR and one’s stated query), therefore, is a product of state-input-output processing by an operating program logic – governed by a selected market strategy. Thus, we observe that metacircular dynamic between market congruencies and program interface.
A fascinating subject – hopefully, we may devolve from current quant-algo pedagogy toward a diverse field of study and application. For instance, consider implications of Jeff’s recent article on Enantiomers; also noteworthy is Victor’s article, Complex Variation, October 11, 2007.