Ralph nelson elliott – Page 2 – An Autonomous Agent

I am currently exploring stock price movements. I hope to publish a full post on my insights soon. Perhaps linking Elliott Waves with the fundamental tug-of-war between buy and sell price action. Here is a neat simulation of traders in an Ising type model. The resulting stock price simulation can be seen in the PDF. The model was created using 1,000,000 traders. If this is really the underlying nature of the movement of stock prices, then by observing a stock trajectory, an observer is really only getting a tiny fraction of the information about the state of the system. If there was a way to implement this model on a wide scale, the results would be really neat.

PDF of the price movement:

Simulated Price Data using Ising Type Model

GIF animation of the model:
Red dots are traders short the stock. Yellow dots are traders long the stock. Orange dots are traders neither short nor long the stock.

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Example Plot

In the financial industry many models are based on Geometric Brownian Motion. However, these models tend to be inadequate and breakdown when the assumptions are violated. Searching for better stochastic models to model the market, I recently ran across an interesting topic in the field of market prediction and structure — the ideas of Ralph Nelson Elliott. It is remarkable that his ideas of market waves and structure were formulated in the 1930’s. His ideas were popularized by Robert Prechter who has numerous books and articles written on the subject. In this post I have introduced these ideas and will post all the articles and books I have and will read on this subject. I hope to develop these ideas further.