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More precisely, prices are assumed to be lognormally distributed, and returns are assumed normally distributed. This makes sense when you understand that the x-axis in a normal distribution runs from negative infinity to positive infinity. In a lognormal distribution, the x-axis runs from zero...

If we are, you won't know until it's already over.

It's easy with Excel. 1. Import the data into a new spreadsheet 2. Go to Tools > Data Analysis > Descriptive Statistics 3. Enter the relative information into the input range and output range, Summary Statistics, and 95% confidence level 4. Press OK and your in business Note: You may...

What one really needs to do is determine the expectancy of a given pattern over time. Reject all patterns that give a negative expectancy, and trade the pattern that has the highest expectancy. You could always subtract slippage and commission from that number as well. A high trading...

Of course Payoff = Probability*(Reward/Risk) Therefore, seek to maximize the payoff, and not just a high probability trade, or a favorable reward/risk ratio.

Std. Dev. of what? Price, volatility, or some other measure? The problem is that the probabilistic nature of the markets is not modeled very well using Gaussian statistics. Fractal statistics are still a new enough field that nobody has developed a good market model yet with them.

Some verses from Ecclesiastes to remember: 1:9 ...there is no new thing under the sun. 5:10 He that loveth silver shall not be satisfied with silver; nor he that loveth abundance with increase: this is also vanity. 12:13 Let us hear the conclusion of the whole matter: Fear God, and...

"Your superstitions pull you in the direction of your ignorance." Got that one from watching Kung Fu

During the 60 Minutes interview of Alan Greenspan on Sept. 16th, he said that economists are no better or worse at forecasting today than they were 50 years ago. I understand that predicting the future with better than 50/50 odds would be a very useful thing, but it will never, repeat never...

Do you have RAID 0 or RAID 1? Most likely RAID 1. RAID is a good thing, and you should leave it alone. If you do need the extra space, Google "raid 1 breaking the mirror".

If the call is quoted higher then implied volatility has expanded, but until someone buys that call, actual volatility has gone no where. Volatility expansion could be only in the mind of the market makers. If someone agrees with their assessment, and pays the ask, only then has volatilty...

Most of you have your perspective a bit skewed. The price went up because people bought the call. Volatility expansion is a result of people bidding up the price. As to why someone would bid up the price, that could be for any reason under the sun.

I've lived here 17 years, so I know my way around. As far as historic dining, not so much any more. The Varsity down by Georgia Tech is historic, but is on the same quality scale as dog food. Try the ribs at Fat Matt's Rib Shack, but get there early for lunch or you'll wait in line. For...

One thing about fractal analysis is that you need enough data for it to have any meaning. More precisely, you need enough cycles for the data to have any meaning. If the cycle for a data set is four years, as determined by R/S analysis and the largest Lyapunov exponent, then you need to have...

Instead of looking for a year over year increase in home prices, look at local rental prices. When they increase, generally about 6 mo. later, local housing prices will start to increase.

I don't think that being a volatility guru is really required to make money. Being a volatility Forrest Gump will suffice. Really what you need to know about volatility is if it is relatively high or relatively low. The absolute value of your indicator is not what is important, because when...

It's only terrible advice if he has no interest in sales. But then again, if he didn't, why would he even bother to ask other people's opinion about the two choices? I personally wouldn't go back into sales at any price. The most important thing is to be skeptical, and don't believe either...

The biggest financial asset you have is your ability to earn a wage. Therefore, my advice would be follow the money and take the higher sallary, as %profits could be $0, and who knows how the firm will manipulate the books to make the profit come out whatever they want it to be. Besides, you can...

There is one way and one way only to make a security go up, and that is to buy it. Conversely, the only way to make it go down is to sell it. This means that prices move only when someone places a bet and puts their money on the table. Someones view or expectation of future market direction...

Right, This is buying low within the context of a longer period up trend. Here is a simple algorithm that follows this concept. Buy after five consecutive down days and close > 100 day moving average. Perhaps you could also wait for the first up day after N-down days, and then go long with your...