JoshuaBrown
08-06-2014,
ACStudio,
You wrote in a recent post:
I have found no data that leads me to believe that any chart setups, patterns, technicals, fundamentals, coin flipping, reading of entrails, gypsy consultations or guru recommendations provide any more edge than one would expect from a normal bell curve distribution of success and failure. However I would suggest that one should use whatever appeals to them to get them engaged and THEN use probability based strategies to provide the edge needed to increase your chance of success.
While I understand your premise, I can't quite get all the way to "normal bell curve", which suggests that there is an equal chance of a stock moving up by one standard deviation as moving down by the same amount.
For example, suppose a stock is in a trading range, and has shown a persistent reluctance to go above 70 or below 50. If the stock falls to 50 with a hammer candle at support, while stochastics goes below 20. The stock then starts back up with a big white candle, and stochastic goes above 30 and MACD turns positive, etc... do you think at that moment, the stock has just as much of a chance to move up 1SD to 65 or down 1 SD to 35?
Again, I get your premise, that TA doesn't offer much beyond randomness, and I'll agree at times, but there are times when I have to throw the normal bell curve out the window.
Thoughts?
You wrote in a recent post:
I have found no data that leads me to believe that any chart setups, patterns, technicals, fundamentals, coin flipping, reading of entrails, gypsy consultations or guru recommendations provide any more edge than one would expect from a normal bell curve distribution of success and failure. However I would suggest that one should use whatever appeals to them to get them engaged and THEN use probability based strategies to provide the edge needed to increase your chance of success.
While I understand your premise, I can't quite get all the way to "normal bell curve", which suggests that there is an equal chance of a stock moving up by one standard deviation as moving down by the same amount.
For example, suppose a stock is in a trading range, and has shown a persistent reluctance to go above 70 or below 50. If the stock falls to 50 with a hammer candle at support, while stochastics goes below 20. The stock then starts back up with a big white candle, and stochastic goes above 30 and MACD turns positive, etc... do you think at that moment, the stock has just as much of a chance to move up 1SD to 65 or down 1 SD to 35?
Again, I get your premise, that TA doesn't offer much beyond randomness, and I'll agree at times, but there are times when I have to throw the normal bell curve out the window.
Thoughts?