Hi there, apologies if this is the wrong area to post in (I think this question best comes under probability) so please, foremost, direct me to an appropriate area if I am mistaken. If I am in the correct area then this is my problem...
I have a moving graph (using Microsoft Excel) that updates once a second and I am hoping to interpret a single value from it. I will use this value to test whether it has any significance in forecasting future moves over time. A snapchat of the graph looks like this...
As you can see, most of the recent activity is at 2.6 so logically it appears that the next lot of movement will be centred around this. I initially thought that simply taking the slope of the linear trend line would be sufficient but this indicates that there is a strong force pushing below 2.0 when in fact it has about a 1/5th of the volume as 2.6 in this snapshot. It is worth pointing out at this point that the X axis isn't fixed and can move beyond 2.0 and 4.6 substantially, that's the point. I'm trying to forecast where moves are more likely to happen next.
I think just taking a simple line of best fit ignores a lot of information that this graph is showing. What I thought next was to use some form of advanced distribution model but am unsure which would be of most use so thus my post here to gather a few expert's thoughts. Do I use: Binomial, hypergeometric, normal, poisson, Chi-squared?
In basic terms, what do you think is the best mathematical tool to use to predict whether I think the price is going to move left, right or stay the same in the near future? Why do you think this and is there any more information that I need to supply to make it more accurate?
Cheers,
CPerry.
I have a moving graph (using Microsoft Excel) that updates once a second and I am hoping to interpret a single value from it. I will use this value to test whether it has any significance in forecasting future moves over time. A snapchat of the graph looks like this...
As you can see, most of the recent activity is at 2.6 so logically it appears that the next lot of movement will be centred around this. I initially thought that simply taking the slope of the linear trend line would be sufficient but this indicates that there is a strong force pushing below 2.0 when in fact it has about a 1/5th of the volume as 2.6 in this snapshot. It is worth pointing out at this point that the X axis isn't fixed and can move beyond 2.0 and 4.6 substantially, that's the point. I'm trying to forecast where moves are more likely to happen next.
I think just taking a simple line of best fit ignores a lot of information that this graph is showing. What I thought next was to use some form of advanced distribution model but am unsure which would be of most use so thus my post here to gather a few expert's thoughts. Do I use: Binomial, hypergeometric, normal, poisson, Chi-squared?
In basic terms, what do you think is the best mathematical tool to use to predict whether I think the price is going to move left, right or stay the same in the near future? Why do you think this and is there any more information that I need to supply to make it more accurate?
Cheers,
CPerry.