June 1997
Intermediate to advanced
336 pages
7h 33m
English
book
Cybernetic Trading Strategies: Developing a Profitable Trading System with State-of-the-Art Technologies
by Murray A. Ruggiero
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6
A Trader's Guide to Statistical Analysis
A trader does not have to be a statistical genius, but he or she should have a basic understanding of statistics that are descriptive of various properties of the data being analyzed. This chapter gives an overview of some of the most important statistical concepts that traders should understand. These concepts are as follows:
- Mean, median, and mode.
- Standard deviation.
- Types of distributions and their properties.
- How mean and standard deviation interact.
- Hypothesis testing.
- Mean or variance with two or more distributions.
- Linearcorrelation.
A trader who has a general idea of these concepts can use statistics to develop trading systems as well as to test patterns and relationships. Let's now discuss each of these concepts in more detail.
MEAN, MEDIAN, AND MODE
The mean is another term for the average. The median of a sample is the middle value, based on order of magnitude. For example, in the number sequence 1, 2, 3, 4, 5, 6, 7, 8, 9, the median is 5 because it is surrounded by four higher values and four lower values. The mode is the most frequently occurring element.
To clarify the definitions of mean, median, and mode, let's look at two different cases:
- 1, 2, 3, 4, 5, 6, 7, 8, 9, 10.
- 1, 2, 3, 4, 5, 100, 150, 200, 300.
In the first case, the mean is 5.5 and the median is either 5 or 6. Hence, in this case, the mean and the median ...
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O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.