TheDiscreteFourier Transform Illusion by Dennis Meyers, Ph.D.
The Fourier transform is a mathematical technique
for analyzing data to determine cyclical component.
Take a close look.
The Fourier transform is a mathematical
technique named after
mathematician Jean Baptiste Joseph
technique, devised long before any
of the modern amenities that we
take for granted today, is widely
used today in science and engineering
for digital signal processing
is a remarkable accomplishment. The application
of Fourier mathematical techniques is prevalent in
our everyday lives in everything from television to
wireless telephones to satellite communications.
STOCKS & COMMODITIES is certainly no stranger
to Fourier analysis. Back in 1983, S&C publisher
Jack Hutson and Anthony Warren published a number
of articles on using the Fourier transform and the
(For a primer on the FFT process, see the sidebar,
“What is a fast Fourier transform?”)
Here, we will take a different approach and examine
how the discrete Fourier transform (DFT) and its
modern implementation, the fast Fourier transform
(FFT), can be applied to the Standard & Poor’s 500
daily index. I will demonstrate possible misuses of
this sophisticated analysis this time, and next time, I
will present a method to use this analytical process.