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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (438)	11/1/2000 1:20:59 PM
From: ahhaha	Read Replies (2) \| Respond to of 24758

There's a hypocrite and a royal pain who has this thread of idiots who discuss trash. The thread is worse than useless. The moderator, LG, is a hypocrite. This post gives you an idea: LG- If you had continued reading the posts, you would be aware that the problem is at Comstock's end and not ours. Of course I realize this is a lot to expect of you. When you come across an item you believe you can use as a weapon, you don't take the time to verify facts before shooting off your mouth. Par for the course for you. I had actually begun believing you had turned a new leaf, as I saw a few rather helpful posts to other clients (a noted departure from your tendency to attack those who do not agree with you or do not share the same experiences). Alas, this was short lived. I again ask that, since the product is so awful for you, you cancel your service. I honestly believe you only subscribe so that you can continue to take shots at the service and deride anyone with the gall to suggest they are happy with the product. Please take your business elsewhere. ~Paul

To: ahhaha who wrote (438)	11/2/2000 4:51:58 PM
From: Bilow	Read Replies (1) \| Respond to of 24758

Hi ahhaha; The real question is not whether the chart of 10,000 coin tosses looks like a stock chart. The real question should be whether INTC, for instance, looks like a coin toss chart. -- Carl When comparing the two charts, you would have to take into account volume.

To: ahhaha who wrote (438)	11/3/2000 12:42:49 PM
From: Wayners	Read Replies (1) \| Respond to of 24758

Hi Ahhaha. Glad I found your thread because I was enjoying our discussion over on LG's thread. quasar_1 has seen the chart of the 10,000 tosses. Ask him if it looks exactly like a stock chart. The only chart of actual coin tosses I've ever seen is in the Samuelson Economics textbook. But they've draw the chart so small, its less than 1" x 1" that you can't tell anything from it. In addition to stocks I charts some indexes and mutual funds. I can tell you its easy to tell the difference between a stock chart and an index or mutual fund chart because the patterns are indeed quite random in the index or mutal fund charts. They don't look at all like individual stock charts. If I had access to a decent sized chart of coin tosses I'd like to take a look. I point out that in your sample space there are long runs where one side or the other persists. This is what happens to traders and gamblers. They get on a streak. In math we call this area of investigation "the theory of runs". The groupings of runs are randomly distributed also, so you don't know when a streak is likely to occur. The expectation of the game of coin tossing applies both locally and globally. Traders and gamblers both look at a streak as due to their skill. Streaks can certainly start and stop at anytime but I think you're missing that technical analysis and trading is not a predictive endeavor and anybody that thinks that has been misled. The point of technical analysis is to quickly identify the information where a streak may have reversed. Depending on the individual liquidity of a stock or its float a streak tends to last longer. Now there's two approaches once you try to ride a streak where there is a history of streaks of certain lengths. First you can bail before that streak ends at anytime for a profit while you have a profit or two you can wait for the streak to end, ie. price moves below an uptrendline and sell as quickly as possible. In actuality I prefer the first approach and it has been very very consistent. If you assign a "1" to heads and a "-1" to tails and then sum the series over the sample space, you'll find the classic stock chart with all the patterns that are named in Edwards & McGee. You get head and shoulders tops, pennants, triangles, breakouts, consolidations with their six counts, Elliot Wave, the whole set of illusions. If you graph the summed series you find that it wanders for extended numbers of trials above and below zero. The sum over extremely large numbers of trials is zero, that is, the area under this wandering nets to zero, but at any instant it may be significantly positive or negative. Thus the expectation of the coin toss is zero or the odds are 50/50 that you will toss a head or tail next time. Nobody in reality flips a coin and decides to buy or sell today so I don't think the analogy works. Coin tosses are brainless, stock buys and sells are based on human emotions of fear and greed and hopefully other important factors. However any fundamental analyses that depend on technical analysis of charts of fundamental data would also be considered flawed. If technical analysis does not work for price and volume data then it also does not work for revenue, margin and earnings per share data either. I'm sure there are plenty of people that thumb their nose at technical analysis of price and volume yet chart sales growth and when the "streak" of sales growth slows they make a sell decision for example. There is no difference IMO between that and selling when price streak ends. In fact I'd rather sell at the end of the price streak because thats going to occur long before you ever even see the sales growth slow. The reason why both stock charts and coin tossing create similar patterns is that they both are stochastic processes. I'm familiar with the technical indicator called stochastics but tell me more about a stochastic process. It was explained to me several years ago that when the volatility decreases significantly on a stock and its basing that direction of breakout cannot be determined mathematically based on something you said to me in a post a few days ago--polynomials sin waves etc. I agree in situations like that the predictibility is nill and you're better off not trading those situations. They can go either way. Each follows slightly more subtle laws which at lower order are equivalent. Sometimes stocks are modelled with martingale processes with Pareto distributions. The difference between that model and some other is not relevant for assessing whether you can expect to succeed at trading or gambling. The models used on stocks and coins may not be a valid comparison as I cited above. Although coin tossing is fair, it is never on-balance profitable. At least the expectation is flat. I certainly wouldn't bet on coin tosses or dice or cards thats for sure. There's no preditability to it...ever. Stocks outside the low volatility basing periods have enough preditability to be profitable. Trading and gambling slope downward so that gradually over time you may get ahead and then get behind only to pull ahead again, but the result is that you always are losing a little on-balance. This is the negative expectation. The rate of the loss is proportional to the cumulative area under the game's probabilistic structure. Many studies have been done which try to assess the rates of loss of various games. Obviously this is critical in Lost Beggas, since the expectation determines the gross proceeds to the house. All games in Beggas are better than stock market trading except maybe slot machines. You have to be right something like 85% of the time. This is partially due to the asymmetry of price translation. Selling happens faster, but you can't get on the short side faster. Gambling definitely slopes downward for sure. I've never been interested in gambling at the casinos thats for sure. Trading in the hands of 9 out of 10 people also slopes downward. I think thats a fair assessment. But there are a minority fo skilled traders out there that do very well. In fact Samuel Economics says, "Some alert operators have been able to run $1,000 up to $10 million or more." They key is to use as much information as possible not just price and volume but special situation type information as well that affect supply and demand--things like knowing when earnings are being released, when tax loss selling occurs, what quarters are seasonally strong, when the IPO lock-up or quiet period ends, When the wash sale 31 days ends and things like that.