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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: F Robert Simms who wrote (39968)	11/17/1999 7:53:00 PM
From: Matthew L. Jones	Read Replies (1) \| Respond to of 44573

Under consecutive days statistics, it is neither uptrend nor downtrend. Just days in the same direction. Based on the close, each day is either higher (U) or lower (D). After the spreadsheet did the calculations, I manually went through the 10 years of data and counted consecutive U's or D's. In other words if there were three days which closed higher, consecutively, my "U days" column would get a "3", and so on. At the bottom of the column, the computer did the statistical work-- mean, standard deviation, minimum, and maximum. Once I had the basic stats, I then plugged them into a stat calculator and derived probability (actually, mean and standard deviation are all that are required), then raw probabilities can be converted to odds. That's how I did it. As for today, the odds in favor of another up day (or today being the second consecutive day in the same direction) was nearly even odds (1.12:1 in favor and 0.89:1 against) see bottom right of page: home.earthlink.net Where this stat becomes valuable is when we have already had several consecutive days in the same direction, you can see statistically how long of a shot another day in the same direction becomes. For example it goes from 3:1 against (3 days) to 11:1 against (4 days) to 55:1 against (5 days). If the trend is up and you are riding the 5th consecutive day, it's probably a good bet to take your profit on your longs, or to initiate a short at a logical resistance level. Hope this helps. If I can help further, don't hesitate to post me. Matt