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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (84957)	7/21/2016 8:47:32 PM
From: GROUND ZERO™	Read Replies (1) \| Respond to of 220708

Great article on the gambler's fallacy... true, each flip of the coin, that no matter how many times it came up heads, it's still 50/50 that the next flip will be heads... BUT, the gambler's fallacy cannot be applied to a collective series of events... for example, if you flip a coin 10 times, then you should get 5 heads and 5 tails, but you may actually get 7 heads and 3 tails, and that's because the number of flips was only 10... now, if you flipped that coin 1000 times, the chances of flipping 700 heads and 300 tails becomes significantly less... when you're dealing in large numbers of coin flips, the odds begin to flatten out to 50/50... 1000 flips will be closer to 500 heads and 500 tails although you may end up with 453 heads and 547 tails... Actually, in the first place, the gambler's fallacy doesn't even apply to these markets at all since whether the market is higher or lower on any given day is not at all random... the gambler's fallacy refers to a misconception that comes only from random events... market action is not random... Okay, enough for now, there will be a quiz on this tomorrow...<g> GZ