At its heart Mathemarkets® is a simple concept that introduces markets to maths (and not the other way around) because it approaches market analysis first and foremost from a practical markets' perspective, inspecting the markets for areas where basic maths could be applied to correct and improve technical analysis (TA), or any other analysis for that matter. Users of TA would find it hard not to notice that most tools of TA - from hand drawn trendlines to technical indicators - are extremely subjective in nature in the sense that their calculations are not founded on maths or hard sciences but instead are arbitarily constructed. These are mostly subjective notions made up by someone.
Mathematics therefore I think has a very significant role to contribute to market analysis. Exactly why is this ? I'd venture to say that the vast majority of traders understand instinctively that there is an obvious correlation between the market prices, time and maths. The correlation is simple: price and time are numbers, therefore why shouldn't use we numerical calculations (Maths) to help us forecast future price and price directions. Since future prices are dependent on time, whenever there is a market be it for the next minute, five minutes, a day or any other time, there will always be a price (The dependent and independent variable in maths terms). Using calculations to analyse numbers would seem to be most natural and obvious yet this is rarely done in TA.
The classic model of drawing trend lines provides a good example of the subjectivity of TA. In this model, when a trader spots a market that looks like it is in an uptrend, he is then supposed to draw a trendline by connecting the lowest low price point to the highest low price point in the trend. The problem with this is that an equally credible trendline could be drawn by connecting many other points on the trend. For example, how about simply connecting the lowest point on the trend to the highest one? Isn't this just as valid a trendline ? Or how about from the lowest high to the highest low or maybe just a line right through all the data or any other way for that matter as long as they all still showed an uptrend, they could all be just as valid as the classic way of drawing trendlines.
However if we used a bit of maths then we could have an absolutely objective trendline, this would remove all the subjectivity from the line because it would be objectively calculated from a mathematical technique known as linear regression. it would not be subject to the intepretation and bias of individually hand drawn lines. This trendline is the optimal line because the optimal angle through the data has been calculated by what is known as the regression matrix ( you only need two ' points' to draw a straight line - the first is the price on the Y axis and then the angle ). No traditional TA method of drawing a trendline take these factors into account and therefore cannot be objective. However LR is only a very small part of the Mathemarkets system, don't make the mistake as some have done of thinking LR is the be all and end all of Mathemarkets.
The same regression techniques could apply to remove the subjectivity from trading channels. Who says that these channels must be parallel lines, there is no objective basis to this. And that is not all, regression could be applied to remove the uncertainty from drawing other familiar chart patterns such head & shoulders, tops & bottoms and the result may surprise you. It can make the connect-the-dots activity of the Eliiot Wave obsolete. Instead, software can generate a curve, that functions more like a trendline - which is far more useful than the classic Elliot Wave.
Regression is just one small example of what Mathemarkets® and maths can do to improve your TA, there are countless other mathematical applications that can support your technical analysis and create new indicators based on maths. In fact you need not give up your TA. The bottom line is you have nothing to lose and everything to gain by using both TA and Mathemarkets®, so you could retain hand drawn trendlines whilst adding in linear regression. By simply adding Mathemarkets® to TA, you create a powerful supercharged combination.
You need no advanced knowledge of maths other than basic arithmetic to understand Mathemarkets® though you should be familiar with the basics of technical analysis. Everything will be explained in terms of market application and simple non-jargon language. I myself hold no advanced qualification in maths, I only have A-level maths but what I have is much more important – market knowledge, in that I have applied markets to maths. From that I have a good idea of what kind of maths works when applied to technical analysis.
I aim to begin with introductory courses explaining the issues with the TA technique we are dealing with and then explain how Mathemarkets® can correct and improve it. I will then also explain how (including coding) and where you can use available software to produce these new and improved charts and indicators for your daily trading. Please also watch outfor my new book. I sincerely hope to help you benefit from the unque and revolutionary value of applying maths to the markets.
DISCLAIMER & NOTES
I make no guarantee that you will win in the markets, no one can and you should treat anyone who makes such claims with suspicion.
However I do know that all my products will significantly improve your technical analysis and your insight of the markets.
My products are suitable for all types of traders from absolute beginners to experienced professionals, whether you trade forex, stocks, futures, commodities, spreadbets, CFDs, whether you are full time or part time you will find my courses of great benefit to you.
Lastly, I realise that my site may come across as somewhat " old school " and though I am endeavouring to improve its presentation I hope you will undrestand that I am a one man operation who has to do everything himself and not a large organisation that has specialist teams for everything. Thus progress may be slow. Then again you have seen how so called experts with slick websites and extortionate charges don't even live up to a fraction of what they promise, so I am sure you will agree with me that substance is always greater than form.
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