You overestimate me. I wasn't trying to be clever. My point was that a trader is more likely to be "right" if he chooses a general direction than if he not only chooses a direction but also a specific price projection to be attained at a predetermined time. The likelihood of all those ducks getting into a precise row in an environment of uncertainty strikes me as very low. That premise leads me to conclude that the more precise your attempt to project, the more likely you will be wrong. Hence the likely negative correlation between specificity and outcome. Conversely, the less demanding you are of future price movement to accommodate a specific whim or "projection," the less likely you are to be disappointed, all else being equal.Quote from MAESTRO:
You might have mixed two things. Positive or negative correlation is still somewhat equal in terms of their prediction values. No correlation (or â0â correlation) suggests that there are no dependencies of any sort. That is my conclusion so far. Unless, of course, staying true to your self you are being facetious and making an exquisite joke in which case the markets should care about everybodyâs predictions.
I think it goes beyond the notion of joint probability. Even first order specificity in an environment of uncertainty is likely to be met with an unhappy outcome. The joint probabilities only make it more so. I think that the further out you go with a specific time/price prediction, the more likely that you are to be wrong, all else being equal.
Do you think that RFT realizes you are just toying with him and that he is just playing along like a good sport?
