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Correct me if I'm wrong, but in my wanting to think of things in
simplistic terms what I get out of this is, if one constructs systems
based on geometric oriented relationships then the relationship is
the same after the change as it was before but not so with devices
constructed based on arithmetic relationships. This is roughly ( or
more so ) equivalent to viewing charts based on a log scale .vs. on
an arithmetic scale, the second of which by definition provides a
distorted view.
--- In amibroker@xxxxxxxxxxxxxxx, "MarkF2" <feierstein@xxxx> wrote:
> Fred,
>
> Best way to explain is with examples. Let's say you're trading a
> system that gives buy and sell signals from a price based indicator
> and the (futures) contract's specifications are changed so that
price
> is now in dollars instead of cents. If the indicator and system are
> dimensionally coherent, you'd get the same results trading the
system
> with the price quoted in dollars as you would with it in cents. In
> stocks, the same concept applies to split adjusted data.
>
> Eckhardt gives a great example in his article with Hans Hannula's
> fractal efficiency indicator:
>
> "Consider the following three-day price series:
> Series 1: 50, 50.6, 50.8
> Series 2: 52, 52.5, 52.4
> The first has a fractal efficiency of 1.420..., while the second
has a
> slightly higher one of 1.425.... Now suppose we multiply all these
> prices by 100, signaling a unit change from dollars to cents. In
these
> units, the first series (5000, 5060, 5080) has a fractal efficiency
of
> 1.000..., but the second (5200, 5250, 5240) has a lower fractal
> efficiency of 0.667.... Thus, fractal efficiency ranks these price
> series in an irrational and incoherent manner."
>
> Mark
>
>
>
> --- In amibroker@xxxxxxxxxxxxxxx, "Fred" <fctonetti@xxxx> wrote:
> > Mark,
> >
> > Can you explain what this means to you ?
> >
> > A system can be said to be dimensionally coherent if its results
do
> > not change even though the units of measure do.
> >
> > Fred
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