OMG I can't believe this fallacy still exists in trading!

[tsfx]

Hes an Elliot waver,and looks at channels...

He doesn't comprehend price distributions...

gotcha.

 

[wxytrader]

So, it's not the same when stock goes from 10 to 5 vs from 5 to 10. Think about the gain differences when trading options (with the same cost).

No. It's the same thing.

wow, 19 pages of discussion that % changes don't matter?

After a -50% fall, it takes +100% to get to the same level so it (usually, but not always!) takes multiple times more time to get back to that level.

This is a perfect example of the traders fallacy. The stock can just as easily return to $10. It is not burdened by math.

Basically what you would be saying is that mathematically it is harder for stocks to recover than it is to drop...but logically the stock doesn't know its dropped from a price level lol...it doesn't have a memory. It doesn't know how much your portfolio is up or down...all of these factors are irrelevant. The stock is just going to bounce up or down based on sentiment by .01.

 

[tsfx]

This is a perfect example of the traders fallacy. The stock can just as easily return to $10. It is not burdened by math.

The stock CAN, ofc, theoretically just as easily return to 10. But liquidy providers usually make sure it won't. Look at all the crashes of SPX and then compare it with the time it took to trade at the same level. And i'm talking crashes on daily charts not on 5min TF 10 point hiccups.

No. It's the same thing.

So, you're saying that the ATM put @ 10 would have the same cost like ATM call @ 5 with same exp and vola?

 

[wxytrader]

The stock CAN, ofc, theoretically just as easily return to 10. But liquidy providers usually make sure it won't. Look at all the crashes of SPX and then compare it with the time it took to trade at the same level. And i'm talking crashes on daily charts not on 5min TF 10 point hiccups.



So, you're saying that the ATM put @ 10 would have the same cost like ATM call @ 5 with same exp and vola?

We aren't talking about options...but they are incorrectly priced anyway. I am just pointing out that the article is wrong to imply that because your stock would have to increase by 100% to recover from a 50% loss is somehow mathematically challenged to do so. It is not.

 

[tsfx]

We aren't talking about options...but they are incorrectly priced anyway. I am just pointing out that the article is also wrong to imply that because your stock would have to increase by 100% to recover from a 50% loss is somehow mathematically challenged to do so. It is not.

IT IS mathematically challenged to do so because you have long gamma guys delta hedging (gamma scalping) constantly when price changes. So, when prices rise they SELL. That's an actual trade, an actual supply.

Their hedging is much more tighter when the price start to rise from 5 compared to when the price starts to fall from 10. HENCE, the difference. This isn't made up sh*t, these are actual trades that affect your stock price.

Where do you think your liquidity comes from ? Why are the bid/ask spreads so low?? How on earth you get this liquidity that we have on EVERY PRICE level? Exactly, from the quys that "don't know how to price options".

Wanna know what happens to price when they back off from bid/ask? Check USDJPY 120minutes ago.

 

[Buy1Sell2]

Ok let's simply this since most of you are struggling with the concept. If you have a stock that is $10 and it drops 1% to $9.90, then if it increases by 1% you only have $9.99...so theoretically the price would have to increase more than 1% to return to break even. Using this logic would you say this proves that you MUST mitigate losses early because it is mathematically harder to recover from them?

 

[taowave]

LOL !!!!!!!!!!!!!!

Your only "stat" term is "EASILY"???????????

What happens more "EASILY",in the world of Trader Fallacy?

Stock moves down 50 percent

Does it EASILY go up 100%,or does it go down 50% more "EASILY"??

You have no clue,do you....

And yes,stocks do NOT have memory,which actually supports the argument why it wont "EASILY "retrace 100%....

You cant even get your arguments straight...

This is a perfect example of the traders fallacy. The stock can just as easily return to $10. It is not burdened by math.


No. It's the same thing.

No. It's the same thing.



This is a perfect example of the traders fallacy. The stock can just as easily return to $10. It is not burdened by math.

Basically what you would be saying is that mathematically it is harder for stocks to recover than it is to drop...but logically the stock doesn't know its dropped from a price level lol...it doesn't have a memory. It doesn't know how much your portfolio is up or down...all of these factors are irrelevant. The stock is just going to bounce up or down based on sentiment by .01.

 

[wxytrader]

LOL !!!!!!!!!!!!!!

Your only "stat" term is "EASILY"???????????

What happens more "EASILY",in the world of Trader Fallacy?

Stock moves down 50 percent

Does it EASILY go up 100%,or does it go down 50% more "EASILY"??

You have no clue,do you....

And yes,stocks do NOT have memory,which actually supports the argument why it wont "EASILY "retrace 100%....

You cant even get your arguments straight...

Sigh...you are sooooo close to grasping the concept.

 

[wxytrader]

IT IS mathematically challenged to do so because you have long gamma guys delta hedging (gamma scalping) constantly when price changes. So, when prices rise they SELL. That's an actual trade, an actual supply.

Their hedging is much more tighter when the price start to rise from 5 compared to when the price starts to fall from 10. HENCE, the difference. This isn't made up sh*t, these are actual trades that affect your stock price.

Where do you think your liquidity comes from ? Why are the bid/ask spreads so low?? How on earth you get this liquidity that we have on EVERY PRICE level? Exactly, from the quys that "don't know how to price options".

Wanna know what happens to price when they back off from bid/ask? Check USDJPY 120minutes ago.

Explain to me how chart patterns such as channels, triangles, double tops. triple tops, support/resistance happen SO FREQUENTLY if a stock is mathematically challenged as you claim? In all these patterns price routinely returns to previous levels.

 

[taowave]

50% price channels??? LOL!!!!!!!!!!!!!

For the love of Edwards and Magee,stop embarrasing yourself

Explain to me how chart patterns such as channels, triangles, double tops. triple tops, support/resistance happen SO FREQUENTLY if a stock is mathematically challenged as you claim? In all these patterns price routinely returns to previous levels.