Markov's

["W Lake" <wlake@xxxxxxxxx>]

Thanks

Markov processes, (Markov chains), basically deal with transitory
probability, i.e., price action changes from opening range flurry to mid-day
range doldrum to closing flurry.

Here's a web site example from an Intro Operations Research course. Enjoy
the munchy, scrunchy,  ...  stuff<G>

http://graph.ms.ic.ac.uk/jeb/or/markov.html

I'm sure that you can think of a similiar examples from your own trading
analysis along the following lines. Uncle Frankie likes AMD but finds that
he never buys it twice in a row using the same trading system signal if he
had a losing trade. Then again, he really likes MU, if he makes money, he's
three times  as likely to use the same trading system signal.

Van Tharp and trade anlysis has helped you define your own "states". The
probablities that accompany the evolution from one "state" to another
"state" are the transitory probabilities. There's lots on the web if you
can't find a good used book. Any of the matrix algebra or linear algebra
software will do the hard work for you.

Eigenvalues are the roots or numbers that along with the eigenvector, solves
the Matrix equation.

Just tie your psychology book stuff (i.e., VanTharp) together with the quant
stuff. It makes interesting reading <G>

Best regards

Walter