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Showing posts from April, 2017

Stochastic Systems Analysis

Engineers will recognize that this post is about stock trading, others may wonder what is a stochastic system . Market price data is a time series of mostly random data, a stochastic system .  So a Day Trader is a Stochastic Systems Analyst - now doesn't that sound fancy! Investopedia Simulator   The one thing I learned over the years is that if you want to make money from trading stocks or futures, then you need to have a simple and well defined system, with easy to calculate entry and exit criteria, otherwise you will eventually lose your shirt. As the late Douglas Adams, the famous galactic economist of Bistromatics fame said:    When it is infinitely improbable that something will ever happen,  it will happen almost immediately. Price data is mostly random.  In retrospect it seems to follow a trend and engineers and computer programmers get duped into thinking that they can easily devise a system to do automated trading based on historical and real-time data, with