The OEX... gasp! Message Board

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Strategies & Market Trends : The OEX... gasp!

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To: Gary Martin who wrote (76)	9/13/1996 1:30:00 PM
From: Chris Baker	of 658

Hi Gary - I've just started trading OEX. I bought some Calls yesterday afternoon, which I've sold today. Buying Puts this afternoon expecting a reversal over the next few days. Market certainly has been strong the last few days. A brief update from our last posts: Still interested in option pricing models, but it turns out the newer models involve a great deal of mathematics. All still assume that price fluctuations are random however - which we know isn't true. I'm pursuing non-linear dynamics models at present, but sort of in the background - involves fractals, chaos theory etc. After studying some of the newer option model, I've given greater emphasis to technical analysis through charting to attempt to identify non-random patterns. Flags, pennants, trading ranges, head and shoulders are all distinct non-random patters for example. Also gained a greater appreciation for how some charting patterns can look very real but are actually random, triangles and necklines and breakouts are especially suspect for example. "Schwager on Futures" is the best book I have seen on charting. He also covers Candlesticks. He also gives to emphasis to acting on chart pattern failures, like breakout failures.

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