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Pal,
Al has a history of making sensible posts... on
many subjects. Kick back and absorb what he is saying:
"So, statistics is not meaningless at all and in fact is a very valuable
tool in this complicated trading business of ours. Use it properly, and you will
be rewarded. Use in unwisely, and you will lose big."
And may I add: "Lecture, teach or pontificate false
concepts, about statistics and their proper applications, and you will
go straight to trading hell...but, not so fast...Larry's already in
line."
Take care,
Steve
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
Al
Venosa
To: <A title=amibroker@xxxxxxxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Sunday, October 26, 2003 2:39
PM
Subject: Re: [amibroker] Re: solving the
prediction problem
Pal,
Sorry, but I have to take the side of MarkF2 on this one. Yes, I agree,
you can prove anything you want with statistics, but only if you use it
improperly, which most people who have a vested interest in something or are
not objective in their analysis of an empirical observation do (understand, I
am not accusing you of anything; I'm just stating a fact). If you use
inferential, parametric statistics on data that are not even close to being
normally distributed, you can prove anything. But your proof is flawed because
you have misused a basic underlying assumption that the particular statistical
test was designed to indicate. You speak of proof being only in the realm of
physical law or mathematical theorem. Perhaps true if you speak of absolute
proof. However, in statistics, all 'proofs' are based on measurement error,
and there is nothing on this planet that can be measured error-free (except
mathematical principles such as the area of a triangle or the Pythagorean
Theorem). In trading, the errors are huge, sometimes infinite, because price
behavior is so variable; so in order to try to 'prove' anything statistically,
you have to minimize that error as much as possible. How does one minimize
error when prices are determined by such a huge universe of human beings, all
with different outlooks on future behavior and all biased to some degree by
their own non-objective views? You can't. You can only generate probabilities
and confidence based on those probabilities, and that is the heart of
statistical analysis. So, statistics is not meaningless at all and in fact is
a very valuable tool in this complicated trading business of ours. Use it
properly, and you will be rewarded. Use in unwisely, and you will lose big.
Al Venosa
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
palsanand
To: <A title=amibroker@xxxxxxxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Sunday, October 26, 2003 3:41
PM
Subject: [amibroker] Re: solving the
prediction problem
I do not dispute the usefulness of statistics, only in
the use of it to prove something, which anybody who has a good grasp of
statistics in this planet knows, which apparently you
don't.Regards,Pal--- In <A
href="">amibroker@xxxxxxxxxxxxxxx,
"MarkF2" <feierstein@x...>
wrote:> What planet are you from? Statistics *is* a branch of
applied> mathematics and, IMHO, the single most useful for
trading.> > "Each of us has been doing statistics all his
life, in the sense that> each of us has been busily reaching
conclusions based on empirical> observations ever since birth." --
William Kruskal > > --- In amibroker@xxxxxxxxxxxxxxx,
"palsanand" <palsanand@xxxx> wrote:> > > Like I
said earlier, Statistics is meaningless in the context that >
> you can come out with statistics to disprove anything. Proof
> > requires a law or a theorem. Only Mathematics can prove
or> disprove > > and that is one reason it is the greatest
of all sciences.
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