February 27, 2010 at 14:39Turing Pattern Search Financial Test
A group of economists from MIT, Cambridge and Northeastern University launched a simple experiment called the Turing financial test . There are two graphs to choose from: one real, and the second the same numbers, but randomly mixed.
Try to determine by eye and see how your results over a long distance will differ from 50%.
The meaning of this fun is this. Some economists believe that the effectiveness of the free market can be judged by its specific results. The more random prices are for a certain period of time, the more efficient the market. There should not be any patterns or predictable movements. The ideal market, according to their theory, should be completely random, completely unpredictable.
In this regard, the question arises: what do we have today? We have an interesting situation. In global markets (gold, foreign exchange market) prices are unpredictable, it is a fact. At any point in time, a trend can go up or down, as red or black will drop out in a casino. But are these unpredictable movements random? That's the question. Are there any characteristic patterns recognized by a person in the market movements? The results of the Turing Financial Test should answer this question.
UPD By the way, the first results are already there: people guess the correct schedule by 0.5 percentage points. more often than wrong. That is, a ratio of about 50.25% to 49.75%. Perhaps the test was simply poorly programmed and some unnatural jumps on the chart are simply very striking.
via the physics arXiv blog
Try to determine by eye and see how your results over a long distance will differ from 50%.
The meaning of this fun is this. Some economists believe that the effectiveness of the free market can be judged by its specific results. The more random prices are for a certain period of time, the more efficient the market. There should not be any patterns or predictable movements. The ideal market, according to their theory, should be completely random, completely unpredictable.
In this regard, the question arises: what do we have today? We have an interesting situation. In global markets (gold, foreign exchange market) prices are unpredictable, it is a fact. At any point in time, a trend can go up or down, as red or black will drop out in a casino. But are these unpredictable movements random? That's the question. Are there any characteristic patterns recognized by a person in the market movements? The results of the Turing Financial Test should answer this question.
UPD By the way, the first results are already there: people guess the correct schedule by 0.5 percentage points. more often than wrong. That is, a ratio of about 50.25% to 49.75%. Perhaps the test was simply poorly programmed and some unnatural jumps on the chart are simply very striking.
via the physics arXiv blog
