هذا الفرق بيننا وبينهم ,,,,
http://www.forexfactory.com/showthread.php?t=2436
The Fourier Transform analysis can only be applied to periodic functions.
A peridic function is defined as a function which repeats itself every certain period of time. This of course is not applicable to the price action of any known financial instrument, simply because the price action does not repeat equally during certain time periods.
So, from the theoritical point of view, the Fourier Transform can\'t be used to analyze the price action of currencies or any other financial instrument.
However, I believe that it can be managed to apply the fourier transform analysis but to portions of price actions. Let me explain this a little bit.
If the price action of a certain currency pair is considered, it must be cut down in which each piece must be confined within a certain known limit. For example, cutting the price action of the EUR/USD for 2 days based on the 1 hour chart provided that the price during these 2 days was oscillating between 1.1900 and 1.2000 for example.
Then applying a smoothing moving average for the extracted data, and then getting the time function of the moving average, and after all applying the Fourier Transform for the time function of the moving average.
The step of the moving average is important, as it will be very difficult to get the time function of the price data itself. It can be done by using curve fitting, but it\'s a very difficult and time consuming issue. I don\'t even know if there is any software out there that do curve fitting for inserted data or not.
When you apply the Fourier Transform, you will get another time function which consists of only Sines and/or Cosines. The function will contain an infinite number of terms. The first term is called the fundamental component, and the rest are called the harmonics. That\'s what the Fourier Transform function is called when analyzing the Alternating Electric Current or anyother waveform.
The Fundamental component is usually the most effective component, with the 3rd, 5th & the 7th components being taken into consideration. Usually, all the higher order harmonics are neglected due to their minimal effect. Of course, I don\'t know what will be the analysis of the price action of currencies will result in.
Now the real question is: How can this improve trading and speculation?
If you are analyzing the most recent data, this can be a very useful tool to project price targets as well as defining market trend. Simply insert the required future time in the Fourier time function, calculate the fundamental, 3rd, 5th and 7th components, and you get a price. This price relative to what the price is right now will give an idea about the market next move.
Why this won\'t work as expected?
1- I don\'t believe that this will work as expected, just because the pair doesn\'t move in completely identical cycles. This deviation will result in errors in the Fourier Transform projections.
2- The market is trending during 60-70% of the time. These trending periods can\'t be analyzed using the Fourier Transform Analysis.
3- The Fourier Transofrm was created to analyze the behavior of waves, electric signals and electric current. These phenomenas are completely natural and are moving without any kind of emotions. On the other hand, the currencies and any financial market is being affected by many things, and emotions drive the markets sometimes, so there can be no fixed formula for the market, that\'s why trading systems that used to work in the past do not work in the future, because people change, but waves and electricity do not change their attitude because they don\'t like the way of their life for example, or because of terrorist attacks.
::: nader from forexfactory