Editing Talk:1600: MarketWatch

Jump to: navigation, search
Ambox notice.png Please sign your posts with ~~~~

Warning: You are not logged in. Your IP address will be publicly visible if you make any edits. If you log in or create an account, your edits will be attributed to your username, along with other benefits.

The edit can be undone. Please check the comparison below to verify that this is what you want to do, and then save the changes below to finish undoing the edit.
Latest revision Your text
Line 13: Line 13:
  
 
My view is that it is a  play on how silly stock trader can be sometimes. There is a way of trading called technical analysis, where a trader will look for graphical "patterns" and "signals" in the stock charts and trade on that. This way of doing is notoriously looked down at by either truly quantitative investors that rely on actual stats/signal processing to place their bets or fundamental investor that will look for information in things like the balance sheet statement of a company to place their bets. So if you are such a technical analyst and you see such a pattern as DC Skyline appearing in the stock chart of a stock...well best of luck to make a trading decision based on that, mate.  
 
My view is that it is a  play on how silly stock trader can be sometimes. There is a way of trading called technical analysis, where a trader will look for graphical "patterns" and "signals" in the stock charts and trade on that. This way of doing is notoriously looked down at by either truly quantitative investors that rely on actual stats/signal processing to place their bets or fundamental investor that will look for information in things like the balance sheet statement of a company to place their bets. So if you are such a technical analyst and you see such a pattern as DC Skyline appearing in the stock chart of a stock...well best of luck to make a trading decision based on that, mate.  
 
:With those who 'play the stock-market' seeking to gain an advantage, it at first seems impossible that an existing pattern (to some extent predictable) could continue, because at least some of those ''expecting'' the pattern will then trade on the assumption of that trend, thus changing the trend, even if (as stated) many others find it too compelling to rebel.  Except that others will no doubt ''expect'' such a degree of self-interest, and place their own trades to take account of that, and yet others may try to predict what others will predict the first rebels predict everyone else is trying to do... theoretically ''ad infinitum'', and thus ''maybe'' sustain the original pattern (or something close enough... e.g. the Capital dome being a few points 'higher' in the graph than it ought to be, but still similar enough in shape and symmetry).
 
:High-frequency microtrading algoritms have the same issue of recursion.  Initially they exploit human errors and behaviours, but then an algorithms that can predict what these algorithms would predict can 'play the algorithm', and so on to an arbitrary level of recursion.  Not that the sum total would be likely to be swayed towards an aesthetic graph, but how about a high-frequency trading algorithm whose sole effort (intentionally or otherwise) would be to place transaction requests to 'tweak' the market towards a given result?  With enough capital (NPI!) behind it, it's theoretically possible, and if co-designed with an algorith that would rely upon generating its own profit from knowing (and yet not acting to disrupt) the 'planned trend'.  I wouldn't like to suggest there'd be a net sum profit, across both(/all?) levels of algorithms employed...  Greater minds than I (or at least ones more privilidged in position and resources) have doubtless tried this kind of thing, however... [[Special:Contributions/141.101.106.161|141.101.106.161]] 18:10, 6 November 2015 (UTC)
 
 
  
 
Plus, Randall seems to be playing on the whole idea some pundits on TV gives people that "the market" is a conscious entity with the ability to go up and down. If this was the case, well this skyline pattern could emerge just like that. But as real price is defined by market participants behavior, there is no way for it to be so smooth (unless this is a fairly illiquid stocks that trade rarely and jumps violently when it does.)
 
Plus, Randall seems to be playing on the whole idea some pundits on TV gives people that "the market" is a conscious entity with the ability to go up and down. If this was the case, well this skyline pattern could emerge just like that. But as real price is defined by market participants behavior, there is no way for it to be so smooth (unless this is a fairly illiquid stocks that trade rarely and jumps violently when it does.)

Please note that all contributions to explain xkcd may be edited, altered, or removed by other contributors. If you do not want your writing to be edited mercilessly, then do not submit it here.
You are also promising us that you wrote this yourself, or copied it from a public domain or similar free resource (see explain xkcd:Copyrights for details). Do not submit copyrighted work without permission!

To protect the wiki against automated edit spam, we kindly ask you to solve the following CAPTCHA:

Cancel | Editing help (opens in new window)

Templates used on this page: