Predicting tomorrow’s trading range

[cnms2]

In long run, if you constantly select better than 50% odds trades your bottom line will look better.

A couple of questions:
- From what markets was this data collected?
- How do you suggest using it?

Quote from Joe Ross:

<b><i>This question was sent to me from one of our students:</b></i><color=blue> "Hey Joe! Do you have any statistics that help predict tomorrow’s trading range?"</color>

I certainly do, but please check me out on these numbers because I haven’t verified them in a long time. Here’s what I believe about tomorrow's trading range:

About 11% of the time, there will be a higher high and a lower low (outside bar).

About 11% of the time neither the previous day's high or low will be exceeded (inside bar).

Eighty-nine percent of the time, the previous day's high or the previous day's low will be broken by tomorrow's price action.
The previous day's close will be in tomorrow's range 65% to 85% of the time. If today had a higher high and higher low and higher close, there is a 70% probability the short term trend is bullish. That's quite a bit of trading knowledge, don’t you think?

 

[fletch2]

Quote from 99atlantic:

LMAO - anybody who claims to be able to 'predict' markets is a charlitan. Plan and simple.

Nobody can predict markets; all we can do is respond to them.

I have one question for you, then:

If you cannot predict that you will have an opportunity to sell a long higher or cover a short lower, with a net positive expectation, why do you ever enter a trade?

As for me, I will continue to predict that the markets will behave as such that I will make money on average when I enter a trade. To enter a trade otherwise seems odd, to say the least.

Buy and hold investing is making a prediction. A prediction that markets go up over long time periods.

"Trend following" is making a prediction. A prediction that market action will have momentum leading to profitable exit points.

"Mean reversion" strategies make a prediction. A prediction that market action will be mean-reverting.

Every rational way to enter a trade involves a prediction. Anyone who says it doesn't is confused.

Fletch

 

[99atlantic]

I enter a trade because my system RESPONDS to market conditions and tells me it's time to enter based on the data it has.

 

[NZDSPeCIALISt]

Quote from Joe Ross:

<b><i>This question was sent to me from one of our students:</b></i><color=blue> "Hey Joe! Do you have any statistics that help predict tomorrow’s trading range?"</color>
..................

Are you the same ledgendary Joe Ross that frequently posts on Moneytec :eek:

 

[Chicken Little]

Quote from cnms2:

In long run, if you constantly select better than 50% odds trades your bottom line will look better.

A couple of questions:
- From what markets was this data collected?
- How do you suggest using it?

This is true sometimes. Do you know the conditions under which your statement is false ?

 

[Batterup]

There you go again.....

Joe Ross gives some "ODDS" and you guy go nuts trying to debunk anything and everything. then some say it is so simple it is useless, i assume overcomplicating is a better road to travel. LOL

If half of you dips even ever traded at all you would show some respect for a trader that has been there. Sure Joe has something to sell. but he also has some great knowledge up in the cage od experience.

lighten up, maybe you guys might learn a thing or two.........

 

[El OchoCinco]

If you think the following is useful:

"About 11% of the time, there will be a higher high and a lower low (outside bar)."

well.....

 

[fletch2]

Quote from 99atlantic:

I enter a trade because my system RESPONDS to market conditions and tells me it's time to enter based on the data it has.

With no prediction as to whether the market will offer a profitable exit within your acceptable risk? Hmm. You might want to look into that. Most people are trying to make money with their trades.

I really shouldn't bother with your crowd, however, as it seems you're just intent on playing silly semantics games, and furthermore, that you have no idea what it means to make a probabilistic prediction.

Fletch

 

[cnms2]

I didn't intend to refer to the expectancy calculation. Is this why you asked? I just wanted to say that constantly taking better odds trades and passing on riskier ones should be common sense.

Quote from Chicken Little:

This is true sometimes. Do you know the conditions under which your statement is false ?

 

[El OchoCinco]

4 out of 5 dentists choose Trident