Predicting randomness
- Thread starter oddiduro
- Start date
I started reading this thread and realized how long it was and gave up, and scanned the rest of the pages.
For someone to state that the market is trendless, has either never seen a chart, or read one properly. I can appreciate day traders, maybe not caring if there is a trend or not, they are only concerned with one day at a time. And, often much less than that.
But for the rest of us, I think we have witnessed bull and bear markets ever since we could read a chart. Are these not trends? Are we not in a rising trend as I type, that started in mid to late Oct?
For someone to state that the market is trendless, has either never seen a chart, or read one properly. I can appreciate day traders, maybe not caring if there is a trend or not, they are only concerned with one day at a time. And, often much less than that.
But for the rest of us, I think we have witnessed bull and bear markets ever since we could read a chart. Are these not trends? Are we not in a rising trend as I type, that started in mid to late Oct?
Welcome aboard....
The assertion is that there is no way to tell when that trend will end, or how far it will go. We all know that markets can be traded, the question is can markets be predicted. I got this from Taleb's book Fooled by Randomness. In it he asserts that prognosticators are less than useless.
Elliot Wave analysis is too subjective, that is an intentional needle to you to get you started.
Trends are there after the fact, not before.
This thread has a lot of good stuff in it. It was not meant to settle an argument or convince anyone.
If you would like to comment using Elliot analysis, feel free. There are a few what I would like to call ET reference threads, and I created this one to be that way.
So far, the best minds on ET have contributed, and left the reader alone to consider the fact for themselves.
Thanks for joining in
Every time LTCM comes up they are used to prove something different. Frequently the opposite of last time.
At least Mrs Clinton's brokerage experience is always used to show the same thing. And of course, there is Monica, whos experience with Bills proves that there are times when sex simply is not sex.
IMHO, I am able to find trends that work on some timeframes and then profit from them. On that basis I accept their existence. It always amazes me that some people can't find them but its probably indicative of a different way of thinking and seeing - not evidence of a different reality.
At least Mrs Clinton's brokerage experience is always used to show the same thing. And of course, there is Monica, whos experience with Bills proves that there are times when sex simply is not sex.
IMHO, I am able to find trends that work on some timeframes and then profit from them. On that basis I accept their existence. It always amazes me that some people can't find them but its probably indicative of a different way of thinking and seeing - not evidence of a different reality.
Quote from oddiduro:
Welcome aboard....
1. The assertion is that there is no way to tell when that trend will end, or how far it will go...the question is can markets be predicted...Taleb's...asserts that prognosticators are less than useless.
2. Elliott Wave analysis is too subjective, that is an intentional needle to you to get you started. Trends are there after the fact, not before.
This thread has a lot of good stuff in it. It was not meant to settle an argument or convince anyone.
So far, the best minds on ET have contributed, and left the reader alone to consider the fact for themselves.
Thanks for joining in
Thank you, I'm up for some philsophical discussions, with practical solutions. I've butched your statement, sorry, to address each point separately. Hope you don't mind.
I agree with your assertion: when a trend unfolds, and there are trends in all facits of life, there is NO way of telling with precision how long it will last or how far it will go. One could assign probabilities as to time and price: based upon previous smaller trends within the overall movement. But for one to state exactly when and how high is purely a guess. There are too many variables that can interfere along the way. And thus, extend the move, or shunt it.
However, I fully believe, one can anticipate a turning point (trend reversal) as it is occurring, or within a reasonable timeframe of the occurrance. As for Taleb, from what I've seen over the years, I would have to agree with him most of the time. However, there are unquestionably some outstanding minds out there. Most behind the scenes of course! But there are some public ones too. One has to agree that markets can change within days. Thus, what one newsletter writer (prognosticator) might happen to publish two weeks ago may not be his opinion today.
If I handed 100 EW technicians a chart of any index, I would probably get at least 25 different interpretations. And, the natural conclusion, by most observers, would be that it is far too subjective to be of any use in investing/trading. True right? "As you state the intentional needle." I'd like to try it actually
Anyway, my conclusion would be different. I would review each count with each individual to find out why they arrived at this or that. The reason being, they may have only missed one thing that set them off course. Or, they may think they know EW but are only fooling themselves. It takes blood, sweat and tears to learn EW, because there is nothing written that covers it all!
In the mid 1980's I compared wave counts with Prechter and Frost, over the phone and through the mail. No internet then! They are both very reputable and responsible gentlemen. But they both had the wrong count! So what was I to do, a young upstart like me, trying to tell these two legends they were wrong. No, I tried to determine from how they explained the reasoning for their counts whether or not I had missed something. Consequently, they both were surprised by the crash of 1987, and I was not. This is not to boast, forget that. It takes a great deal of effort, continous effort, to decipher the waves. EW is my passion! It works! Absolutely works! It just has a bad reputation because those who think they know it, do not.
I will review the entire thread. I'm still learning myself! The markets are far more complex than they were in the 1980's and 1990's. Then, you only needed to look at the DOW and Bonds and you knew the whole market. Now, you need to look at five indices: NQ/NAZ/SPX/DOW/SOX, let alone the Dollar, Bonds and Oil.
Appreciate your welcome!
tony
I posted my suggestion of the "game" as a means of demonstrating how unprepared most people are to trade the markets. People paper trade, thinking that this gives them experience. Paper trading doesn't work, because the market doesn't respond to their moves, so there's no feedback to tell the trader how he's actually doing.
My game, however, gives immediate feedback -- there's $1,000 at stake and someone can win it all, if they figure out the right strategy.
Of course, in the real market, you can't win it all, but the strategies are the same. And if a technical indicator won't work within a closed universe game of 10 people, it damn certain ain't gonna work in an open universe with millions of participants.