Most systems are not lineair, a simple example is a system based on a EMA…
Try your system with 1 contract and than with 10 contracts and you will see that your profit is also 10 times higher because it is lineair.
Or try your system in a other timeframe, for example current timeframe = 5 min and your period (x) = 1000 (5 x 1000 = 5000) then use a timeframe of 10 min and a period (x) of 500 (10 x 500 = 5000) and you will see that the characteristics of the system don’t change (because it is lineair)
Or try your system in a other timeframe, for example current timeframe = 5 min and your period (x) = 1000 (5 x 1000 = 5000) then use a timeframe of 10 min and a period (x) of 500 (10 x 500 = 5000) and you will see that the characteristics of the system don’t change (because it is lineair)
JS, I tend to say : Prove it. I mean, by means of a backtest of your choice. Just change the time frame as per your suggestion – use 5 min, 10 min and 15 min – don’t change anything else. Both are allowed to start at the same second.
I think you won’t succeed …
the characteristics of the system don’t change
In theory and with math, yes. But in practice you won’t be able to show double and triple results. It is not even so that the longer the period of sampling, the more close all will be. Try it. It could be fun.
The equations are correct, but after progressive insight, I should have used arrays here as well.
The most important point here is that you can dissect a signal into components, even- and odd, and this decomposition is valid when the addition (superposition) of the components forms the original signal.
When we look in the x-y plane, a signal has an “Even symmetry” when it can be mirrored around the y-axis and an “odd symmetry” when it can be mirrored around the x-axis AND its values is opposite to the original signal.
You can also view this as a rotation around point zero (decomposition is part of the concept of circular symmetry).
