Hi GoogleBit,
The minimum is essentially how low you'll post a loan offer from the average rate. I added it before I added the step down settings, so to be honest I set mine very low (which is a high setting in the drop down) and rely on the step down. As you change this the text underneath for minimum rate will show the lowest rate it'll offer the loan for.
The deviation bit is a tough nut to crack - hopefully this helps. If this doesn't sound like what you were expecting feel free to let me know what you're thinking - here or via PM. You're absolutely right about the average data. Right now it's off the mean by about .05%. The problem is the market changes so often that the starting data will never be perfect.
When I initially started testing this I used real numbers to extend the loans based on my observation of the market. IE I added 1 day if the rate was over .2%, 2 days if over .3%, etc. When I proved to myself I had higher returns over time that's when I took the time to add the heavier math and additional settings. Long story short the only difference between adding loan duration based on a real number such as .2%, .3%, etc. and using deviations is that with deviations the system adjusts to the market whereas using a real value, like .2, .3, etc may not be meaningful at all if the market changes.
In terms an easy example for a deviation, it's a tough one. To be honest I really can't think of a simple example but hopefully this makes sense. Deviations give us an idea of how far a typical loan rate is from the average rate. IE, if the average rate is .15 and the market rate is .2 we can easily see that the market rate is higher than average and that is meaningful. However, we don't really know how meaningful it is. There could be a situation where the historical rates are .1, .2, .1, .2 which would also give us an average of .15, but that would mean the .2 isn't unusual at all - it's happening every other time we check. The idea of deviations is it gives us a way to create an average range rather than a single average number. We create that range as basically (average - deviation) on the low side and (average + deviation) on the high side. Anything falling in that range is nothing special. It also gives us a way to get an idea of how different the rate is that we're checking. The idea is the majority of your rates will fall within the average range, then a smaller amount will be within 1 deviation, and an even smaller amount will be within 2 deviations. As the rate becomes more deviations higher from the average range the likelihood of seeing it becomes less and less and it's value to the lender becomes more and more.
Here's some heavier math:
Deviations are a way to measure how far a given value is from the mean (or average). To generate it first we find the average (we add all the points from the last two weeks together and divide by the amount of points). Then, to find the average deviation we measure the distance of all the points from the average to the point's own value (and this is the absolute value, so even if the result is a negative number we make it positive). IE if we have five points that are 3, 8, 7, 9, 5 our average is 6.4. Then to find the deviation we do this:
6.4 - 3 = 3.4
6.4 - 8 = 1.6
6.4 - 7 = .6
6.4 - 9 = 2.6
6.4 - 5 = 1.4
Then we average those results and our deviation is 1.92. That allows us to set a range that we can consider average, in this case it would be 4.48 through 8.32. That means that anything outside that range is unusual. If it's lower than the range then as lenders we don't want it, but we still may want to take it for as short a time as possible. If it's higher than that range then we definitely want it and should treat it better than we would an average point. That's where adding days comes in.
....aaaah, I'm sure the bloody thing will do what I'm expecting, but I still fight with the settings ;-)
One reason might be, I installed yesterday and may have not enough history in db.
But...
Minimum Loan Duration 2-60 Days
Minimum Loan Rate: -0.1 to -5.0 Deviation
Add 1-10 Day Per: 0.1 - 10 Deviation
Can you give me an easy example which includes "Deviation". Here I struggle ;-(
An what is the "minimum Lending rate" in Operation Log?
thx