what can be predicted and what cannot be in the market?

[JSOP]

what can be predicted and what cannot be in the market?

-What can be predicted: The direction that the interest rate and the USD is going

-What cannot be predicted: The Haitian President got assassinated in his own home

 

[Laissez Faire]

Prediction is about establishing probabilities. Probabilities usually are not certainties.

And those who say markets can't be predicted? Well, too bad for you.

 

[userque]

What cannot be predicted: The Haitian President got assassinated in his own home

I'll bite.

Could the guy ordering the hit ... predict the assassination?
Could the multiple gunmen?
How 'bout the gunmen's friends/families, could they have also predicted it?
Could an observer/eavesdropper of that group have predicted it?
Were prior threats made?
Was it obvious; just a matter of time?

As it applies to markets:
Inside traders can make moves, to an extent, based on their knowledge.
Their moves are trades.
Their moves may indicate and/or cause patterns.
Others may be able to observe repeating patterns.

Always remember, OP ( @mute9003 )
When people say, "So and So can't be done;" they typically mean to say "I don't see how so and so can be done," or "I can't do so and so."

 

[userque]

Prediction is about establishing probabilities.

You can even make a prediction, with no probabilities.

An algo can be designed such that it can forecast a higher/lower close over a time-period, without indicating a likelihood.

 

[maxinger]

by now @mute9003 should be confused.
he either listens to us or does the reverse of what we say.

when we say the market can be predicted, he can listen to it or do the reverse.
when we say the market cannot be predicted, he can listen to it or do the reverse.

 

[userque]

by now @mute9003 should be confused.
he either listens to us or does the reverse of what we say.

when we say the market can be predicted, he can listen to it or do the reverse.
when we say the market cannot be predicted, he can listen to it or do the reverse.

He can believe that it can be predicted, or not.
Same two choices they had before presenting the question.

Calculus confuses some people, but that doesn't mean that calculus is confusing.

 

[Laissez Faire]

You can even make a prediction, with no probabilities.

An algo can be designed such that it can forecast a higher/lower close over a time-period, without indicating a likelihood.

How so?

 

[Laissez Faire]

I wonder if those who say markets can't be predicted ever went through the trouble of establishing even a basic predictive model.

If you don't even have the valid data to compute basic probabilities - how can you say prediction doesn't work?

Regardless of that, prediction may not be necessary for successful trading. It may even be a hindrance.

But no matter what you're doing it's all a prediction in some way as even those who dlaim that they 'anticipate' are still betting or predicting that the market will do or repeat something it has done before.

 

[userque]

How so?

There are infinite possibilities. For example:

A classification neural network designed to output either UP or DOWN only, will do so; yet, it isn't outputting the likelihood (or "probability," as you say) of the forecasts.

EDIT:

So you don't know if any particular UP forecast is 51% likely, or 99% likely.

 

[Laissez Faire]

There are infinite possibilities. For example:

A classification neural network designed to output either UP or DOWN only, will do so; yet, it isn't outputting the likelihood (or "probability," as you say) of the forecasts.

EDIT:

So you don't know if any particular UP forecast is 51% likely, or 99% likely.

Meaning it's a black box, right?