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Understanding digital processing #452063
06/01/15 15:23
06/01/15 15:23
Joined: Jan 2013
Posts: 68
I
ibra Offline OP
Junior Member
ibra  Offline OP
Junior Member
I

Joined: Jan 2013
Posts: 68
Hi!

As I've read the tutorial, books and many many websites about automated trading, I've come the conclusion that digital processing plays a large part.

How crucial is it to understand digital processing? Guess I'll have to define the word understand - I understand that it is being used to filter for example high or low frequencies in a price curve. But when I try to go deeper into the subject I'm pretty lost. I've not read that much advanced math, and I Can't tell for sure if that's the problem. Do I need to have this understand to make this automated trading journey successfull?

Or is it "enough" for me to just understand the part i described above?

Can I learn the basics of signal processing without going through 100 math courses? If so, where is a good place to start?


Thanks

Typed this post on my iphone btw.

Ibra

Last edited by ibra; 06/02/15 04:42.
Re: Understanding digital processing [Re: ibra] #452177
06/05/15 13:14
06/05/15 13:14
Joined: Apr 2014
Posts: 482
Sydney, Australia
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boatman Offline
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boatman  Offline
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Joined: Apr 2014
Posts: 482
Sydney, Australia
You can definitely learn the basics without knowing too much advanced math. A good place to start is to remember that digital lowpass filters are analogous to traditional simple moving averages (of course, the SMA is itself a type of digital filter). You can choose a digital filter that suits your purposes better than the SMA. For example, you may require a filter with less lag, more smoothing, a certain frequency attenuation range or some combination of these.

A digital highpass filter simply filters the low frequency spectra and allows the higher frequencies to pass through to the output. These are analogous to your typical oscillator-type indicators. Of course, the traditional oscillators can be modelled as highpass digital filters (albeit fairly inefficient ones).

The point is, you don't really need to get hung up on the maths. Of more concern is to understand what it is you want your digital filter to achieve. Once you understand that, some googling or some strategic forum questions should help you find a suitable filter if one is available. You should be able to use the filter in your trading without understanding its mathematical design in any great detail, providing of course that you can find an implementation in the language you are coding in. Zorro is obviously very handy for this!

Hope that helps. If you have specific questions about a particular filter, I'd be happy to try to answer it. I don't claim to be an expert, but I have a decent understanding of how these things work.


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