Where can I find evidence of Algebra, Geometry, or Calculus used in the stock market?

One Response to “Where can I find evidence of Algebra, Geometry, or Calculus used in the stock market?”

1. vekkus4 says:

   January 28, 2012 at 12:07 am

   Hello

   It reminds me of an answer I wrote a few days ago about a forward moving average.

   When analysts attempt to develop a forecasting model to figure out how stock prices are going to change in the next few days, one of the techniques is something like this

   Hypothesize that a given curve A from stock measurements are going to predict a target curve B. These are both functions of time.

   Draw the graph of A and the graph of B

   Next see if you can translate the graph of A so it fits the graph of B at a later time.

   A(t) is one function of time and B(t) is the function to match it with.

   One thing to talk about is how to measure the goodness of the match. This has geometry in it somewhat. It can lead to least squares which is geometrical in a space where the dimension is the number of points where it the curves are compared. This can get you towards Hilbert spaces or Banach spaces somewhat too.

   There are different metrics to compare the curves. Absolute value of the difference, maximum difference, mean square difference, and other averages can be used.

   Obviously you want to translate the graph of A forward, A’(t) = A(t-d) so for example if d=2 A’(2) = A(0) so the graph of A’ is the graph of A shifted forward two days into the future.

   For me the thing that I could never figure out, if you try to google for stock market data you get a lot of nonsense and not very much stock market data – you might have better luck, or ask a reference librarian or something. I read recently a lot of macroeconomic data was made available in 2007 that was not available before that, due to the professional economists collectively making a big mistake of some kind (housing market I believe).