Five months down

Discussion in 'Trading' started by paden, Mar 9, 2008.

  1. That is what is important. Man so many people still ready to buy in this market.

    BEAR MARKETS DONT END UNTIL NO ONE IS WILLING TO BUY, STOP TRYING TO PICK A BOTTOM. LET THE DAMN THING FORM AND RIDE IT BACK UP.
     
    #11     Mar 9, 2008
  2. paden

    paden

    Uhm, not picking a bottom. Even bear markets have rallies, they don't go straight down.

    I never said end of March would be end of bear market.
     
    #12     Mar 9, 2008
  3. Mvic

    Mvic

    So was the RR worth putting on a trade? My guess is not.
     
    #13     Mar 9, 2008
  4. "Thus, there is a 2.7% chance of us ending the month down? "

    no. this is one of the most popular fallacies amongst retail traders.

    just because there has been a statistical likelihood X of something happening in the past, it does NOT necessarily follow that that same likelihood is still the same

    let's say i wanted to develop a trade bias for leap days (feb 29) like we just had, and i found that 3/4 of leap days were up days in the S&P . note: this is not the case, i'm just giving an example.

    does this mean there's a 75% chance that the market will be up on a leap day

    of COURSE NOT.
     
    #14     Mar 9, 2008
  5. Once it has already happened, you cannot use "2.7%" as the probability. The 4 months in a row have already occurred.

    It is like the average newborn male will probably live to be 77 in America. But once he is already 76, he will probably live well into his 80s. That is called actuarials.

    And you cannot look over the past century or so, and think this market has to follow history. It might drop for 16 straight months and wipe you out.
     
    #15     Mar 9, 2008
  6. good points.

    Just like in roulette you can get 100 reds in a row.does that increase the odds of the next one being black?no, its still 50/50.

    however, 2008 is different from the 1940s or 1970s.internet, cp's etc make info move around a lot faster.

    In my view that translates into short and sharp bear markets, and prolonged bull markets, basically a continuation of what we have seen the past 4 years.
     
    #16     Mar 9, 2008
  7. iprph90

    iprph90

    #17     Mar 9, 2008
  8. paden

    paden

    True, very true... That is why I posted the thought, as I tend to get tunnel vision in my thoughts. Also, why I would only put on a small position when considering this... certainly not risk much.
     
    #18     Mar 9, 2008
  9. paden

    paden

    Well... it is working so far, but the month is a long way from closing out.
     
    #19     Mar 18, 2008