technical analysis quote from Top Trader book

[longandshort]

https://www.imaginationstationtoledo.org/about/blog/the-fibonacci-sequence#:~:text=The Fibonacci sequence is the,233, 377, 610, …

The existence of the Fibonacci sequence is not evidence that price is probability.

 

[wxytrader]

No but one can calculate the probability of retracements and extensions reached (in SDs) during various time frames after a signal.

He gets it!

The existence of the Fibonacci sequence is not evidence that price is probability.

One could project the price of a stock 6 months from now using Fibonacci retracements, or you can use one standard deviation and project how much it can move in either direction in a certain amount of time . The probability of a price being reached and by what time frame cannot be calculated unless you take into account ALL the data. This is why I referenced Harry Selden... it would require an immense amount of data to actually to accomplish this.

For trading...all I need to know that price can reach x level in x time. Quants try to figure out that if price moved x in y situation then it should move x in z situation...its a very labour intensive crude approach that can probably only be profitable in a HFT, low/no fee scenario.

 

[Sprout]

Huh ...? Please write out the math of what you just stated.

You'd have to do that work yourself. This would give you an idea:

 

[longandshort]

He gets it!



One could project the price of a stock 6 months from now using Fibonacci retracements, or you can use one standard deviation and project how much it can move in either direction in a certain amount of time . The probability of a price being reached and by what time frame cannot be calculated unless you take into account ALL the data. This is why I referenced Harry Selden... it would require an immense amount of data to actually to accomplish this.

For trading...all I need to know that price can reach x level in x time.

That guy is an idiot, and if you think you can make an accurate prediction of a stock price using fibonacci retracements or standard deviation, then you're not far behind.

 

[poopy]

In the book 'Market Wizards: Interviews with Top Traders', the chapter on Bruce Kovner has an interesting passage that reads:


I do both TA and fundamental analysis and thought it was interesting to compare TA to a doctor taking a patient's vitals before making any further assessment of their current health.

I am certain that Bruce is proud of you.

 

[wxytrader]

That guy is an idiot, and if you think you can make an accurate prediction of a stock price using fibonacci retracements or standard deviation, then you're not far behind.

Are we talking actual price or probability of price? It is easy to project the actual price 6 months from now using TA. I knew last summer that in January bitcoin would rally to ath's. I bought Jan19 16 BITO calls. No quant is going to find that trade.

 

[longandshort]

You'd have to do that work yourself. This would give you an idea:

View attachment 340291

Ok nice panel (/sarcasm), where's the evidence that your ex-post signal is predictive ex-ante? It still doesn't mean price is probability.

 

[Sprout]

Ok nice panel (/sarcasm), where's the evidence that your ex-post signal is predictive ex-ante? It still doesn't mean price is probability.

suit yourself, I don't do drama

 

[longandshort]

suit yourself, I don't do drama

My point is that nothing you have said supports WXYZ's assertion that price is probability. A panel showing bins of prices is irrelevant -- standard deviation is not a predictive variable, it's literally the square root of the variance of your sample.

 

[p0box4]

Let's start with some earnings, Home Depot and Alibaba tomorrow, up or down tomorrow and by how much?

Please make sure you post your predictions well before the earnings report comes out tomorrow pre market, so the post can't be edited after the fact. It wouldn't be the first time someone does something like that.