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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Filbert who wrote (29589)	10/14/1999 10:55:00 AM
From: donald sew	Read Replies (1) \| Respond to of 99985

Filbert, >>>> I just wonder how anyone can be that profound given the enormous number of variables in the world economy. Do any of you have some statistical method you use to mitigate those subjective factors? <<<< Im not exactly sure what you are asking, but let me give it a stab on the basis of statistical analysis/probability. I had discussions with some of my friends who are scientists and have done extensive probability studies. Their first probabity study in a specific area showed that they were able to predict at a rate of around 95%, which they obviously knew that was wrong, since if that was correct they would probably cure most of the world's disease in a year including AIDs. gggggggggggg They knew something was wrong with their study, and they realised that they had a CLOSE ENVIRONMENT, which limited the number of variables. Once they opened up their analysis to an infinity the best probability they were able to achieve was only 63-64% and the that study was run thru the computer several times. The obvious conclusion from this was that as one limits the variables one can increase the probability, which I think is what you are asking when you mentioned if there is a way to "MITIGATE THOSE SUBJECTIVE FACTORs". For this discussion I am associating your "SUBJECTIVE FACTOR" as variables. One way in which I believe that one can reduce those subjective factors is to reduce the time frame. For example, what is the probablity a world war occuring in the next 100 years as compared to the probabilty of a nuclear war occuring by the end of today. Applying that to the market, as the time frame is reduced probability could rise. Some may respond and even say that predicting on a short-term basis is more difficult. OK, then lets take a SPX FUTURES trader who commonly day trades and may only hold a position intraday. That person is looking for an exact pivot point. Whats the probability of hitting that exact pivot point for a trade today, as compared to calling an exact pivot today for a trade next WEDNESDAY. I hope I made some sense. seeya