technical analysis quote from Top Trader book

longandshort said:
Lol so tell me how a stock price can be higher than its past high if that higher price does not exist in the sample? It would register as a probability of 0 in your world.

Yes quants use price data, but they're conducting analysis on returns not on levels. Stock prices are nonstationary.
More...

OMG have you ever heard of a measured move? Do you even chart at all? How are you going to calculate the probability of a return if you can't calculate the probability of a price level? Quants take into account trend so they are quite capable of projecting into the future...they aren't just chasing probabilities that price can move 2% in the next 3 days based on the last x days blindly... lol.
 
Last edited:
wxytrader said:
OMG have you ever heard of a measured move? Do you even chart at all?
More...
Nope lol, and a “measured move” or whatever still doesn’t explains how you can get higher prices if your sample is all lower.

Quants take into account trend so they are quite capable of projecting into the future...they aren't just chasing probabilities that price can move 2% in the next 3 days based on the last x days blindly... lol.
More...
Do you even know an actual quant (besides a “friend” who “codes” and has a “trading bot”)? Because I regret to inform you that you don’t know what you’re talking about.

Maybe you personally use a chart for your hobby, and that’s fine. But don’t make sweeping statements about things (like the nature of prices or that earnings have no impact to price blah blah charts), please.
 
longandshort said:
Nope lol, and a “measured move” or whatever still doesn’t explains how you can get higher prices if your sample is all lower.
More...

Quants can only do so much with just numbers. At some point you have to have a directional bias as that is the ONLY edge in trading. And yes, no direction is still a direction. Statistically you can measure or project how far price can move based on its history. For instance, the last time all the quant criteria was met, the price moved up 10%. If 10% from the current price puts you above the ath then that is how you get higher prices from lower samples.

Am I seriously having to explain this to you????
 
wxytrader said:
Price IS the probability...when are you going to be able to wrap your head around this?
More...
Lol we are back to square one. If price is probability then you can't get higher prices because the probability of a nonobserved price is 0. You gotta stop with the recursive thinking. For the "quants" thingy that you tried to explain, where "if the quant criteria is met then stock goes up 10%" that is not "price is probability".
 
longandshort said:
Lol we are back to square one. If price is probability then you can't get higher prices because the probability of a nonobserved price is 0. You gotta stop with the recursive thinking. For the "quants" thingy that you tried to explain, where "if the quant criteria is met then stock goes up 10%" that is not "price is probability".
More...
What are you talking about? The probability of future movement of price is based on the actual movement of previous price under the same circumstances. Thus price IS probability. It's like quant strategy 101. I don't even use Quant strategy because it's recursive and restrictive and basically for people who can't chart... Or have such huge portfolios that the game becomes shaving pennies off of hft.
 
wxytrader said:
The probability of future movement of price is based on the actual movement of previous price under the same circumstances.
More...
That is not "price is probability"... but it's still wrong. If a stock has not moved more than 5% in your sample, it does not mean that the probability of a stock moving >5% is 0. Were you the guy buying Lehman shares right before it went bankrupt?
 
longandshort said:
That is not "price is probability"... but it's still wrong. If a stock has not moved more than 5% in your sample, it does not mean that the probability of a stock moving >5% is 0. Were you the guy buying Lehman shares right before it went bankrupt?
More...

Okay, so by your logic as soon as you're approaching. All-time highs option prices with strike prices above the all-time high would be worthless because you can't protect beyond the highest price in the data sample? We are comparing apples and oranges here...you're talking math probabilities like sigma which can only produce results within a standard deviation of the sample data...but then the next step is applying that standard deviation to project future deviations.
 
Last edited:
wxytrader said:
Okay, so by your logic as soon as you're approaching. All-time highs option prices with strike prices above the all-time high would be worthless because you can't protect beyond the highest price in the data sample. Here comparing apples and oranges here you're talking Quant math which is totally relevant to price movement.
More...
Lol that's exactly my point... if you were right then options in strikes above ATH would be 0. The fact that there is premia for prices in strikes above ATH is evidence that price is not probability.

Limmys Show: Whats heavier a kilogram of steel or a kilogram of feathers (youtube.com)
 
You must log in or register to reply here.
Back
Top