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All systems that behave accordingly are dimensionally coherent. But
need to be careful about generalizing that all geometric indicator
constructions, for example, are dimensionally coherent. Hans Hannula's
fractal efficiency indicator is a geometric construction but it
combines price and time variables so that the indicator doesn't retain
the relative importance of price and time changes when the axes are
rescaled independently of each other. But some people would never see
that from just looking at the formula, which is why I suggested the
simple and simpler approaches.
--- In amibroker@xxxxxxxxxxxxxxx, "Fred" <fctonetti@xxxx> wrote:
> But the simplistic explanation remains the same ... doesn't it ? The
> simple and/or complex systems I write and trade could care less if
> prices are factored up or down by 100.
>
> --- In amibroker@xxxxxxxxxxxxxxx, "MarkF2" <feierstein@xxxx> wrote:
> > Fred- If you want simplistic, I'll give you simple and simpler :-)
> >
> > 1. Simple. Apply Eckhardt's c-Test for dimensional coherency:
> > "In essence, the c-test transforms relevant formulas in an indicator
> > or system by multiplying every price term by a positive constant c
> (c
> > not equal to 1), while leaving nonprice terms the same. If the
> > transformed indicator or system gives the same indications or
> signals
> > as the original, then it has passed the c-test. If not, the
> > formulation in question is incoherent and depends unacceptably on
> the
> > units chosen."
> >
> > 2. Simpler. Make two test data files, one with actual data and the
> > second with the price terms multiplied by a constant not equal to
> 1.
> > put them in a single group and have AmiBroker do the work by
> comparing
> > indicators and test results on the two files.
> >
> > You can use these tools to test your theory which, by the way, with
> > complex formulas, is not a simplistic approach :-)
> >
> > Mark
> >
> >
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "Fred" <fctonetti@xxxx> wrote:
> > > 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.
> > >
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