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Scientists Develop Financial Turing Test
KentuckyFC writes writes to share a new online test that is being touted as the "financial Turing test." The web-based exercise asks users to distinguish between real and randomly generated financial data. "Various economists argue that the efficiency of a market ought to be clearly evident in the returns it produces. They say that the more efficient it is, the more random its returns will be and a perfect market should be completely random. That would appear to give the lie to the widespread belief that humans are unable to tell the difference between financial market returns and, say, a sequence of coin tosses. However, there is good evidence that financial markets are not random (although they do not appear to be predictable either). Now a group of scientists have developed a financial Turing test to find out whether humans can distinguish real financial data from the same data randomly rearranged. Anybody can take the test and the results indicate that humans are actually rather good at this kind of pattern recognition."
It's a chaotic system, but it has certain patterns that seem to repeat. The thing I noticed after looking at a few, is that the real ones are easily identifiable by the development of resistance and support levels, which technical traders use to find probable entry and exit points. Basically, the hypothesis is that a group X holds the stock, they tend to have some psychological barrier price in common at which they would sell, and another at which they would buy more, this selling and buying makes it difficult to break through those price points. When it approaches one of those points trading goes up, if something has changed to make the stock more attractive to another group, or to make it less attractive to the group of traders that tends to hold it, it will change hands, and the new investor group will have new barriers. So over any given time period you will notice a lot of closing stock prices at close to the same level, then a sudden jump, and new level it bounces between, etc.
It's either false dichotomies, or the terrorists win, you decide.
Various economists argue that the efficiency of a market ought to be clearly evident in the returns it produces.
The market is only efficient within a narrow range of economic activity. When economic activity exceeds the top and bottom ranges you get bubbles and panics - inefficient markets. We see them all the time.
I really wish economists would stop assuming that for any given economic activity, the conditions and their subsequent results can be extrapolated across the board. That's why, whether it's the Chicago school or the Keynesians, they can point to data (a selected portion of economic activity) that supports their view, when in fact all schools of economics is correct in their little slice of economic activity and conditions.
Chaos Theory. Patterns in otherwise seemingly random outcomes. If you look at the details, for instance each snowflake, you'd come to the conclusion that each snowflake is unique (they are), however if you take a step back, you'll notice that the randomness of snowflakes becomes clear in that each snowflake conforms to a pattern that is apparent even as each snowflake is unique.
I know that this is a fairly poor explanation of chaos theory, so don't butcher me too much.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
A chaotic system is one where arbitrarily small perturbations always lead to arbitrarily large divergence in phase space. What this means is that even though a system might be following a completely causal underlying law of behavior, it still cannot be predicted because it would require having infinitely accurate knowledge of the parameters.
Because measuring apparatus always involves noise, and noise is of some finite value, this means that the arbitrarily small (yet IMPORTANT) perturbations cannot be resolved against the noise background. This places a very limited time window on your ability to make predictions.
Basic examples of this are the Lorenz attractor, the chaotic pendulum, etc.
Yes, you are pretty ignorant, I'm afraid. Don't be ashamed, you're in the larger group. Happily, a dose of economics would sort you out a treat. To sort out your central misunderstanding, neither the amount of wealth or the amount of things that you can buy or the amount of work there is to be done is fixed. They relate to each other in rather complex ways, but the upshot is that we can all become richer - and if you don't believe me, ask your great-great-grandfather, or a Chinese factory worker saving up her wages to pay for an education.
[FUCK BETA]
You might mean blackjack. Poker is a zero sum game, some casinos take a rake or charge admission, sell drinks, or otherwise make their money, but the house doesn't generally even play poker, only provides a dealer and a table.
It's either false dichotomies, or the terrorists win, you decide.