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Discussion in 'Trading' started by Trish, Jan 9, 2010.

1. ### Trish

Considering randomness into an equation, I see prices move incrementally 5%, +2.5%, +1.25%, consolidate, pullback or move ahead in the same direction. I am not typing all the research I've done and used but wanted to know if there are any mathematicians/traders who understand what I am talking about.

The general targets help emotionally and sometimes show a range of 20 to 80 cents off the target. Depending on the time fame of a chart (or a high/low to start from), high volatility stocks might start at 10% while ETFs like SPY or DIA might start at 2.5% (+1.25%, etc.)

The reason I starting thinking about this was because a FX mentor told his student (a friend), to take 5% profit and exit a trade. Why 5%? Obviously there was profit and I started to look at a lot of price movements over time. Feedback from mathematical professionals is appreciated.

2. ### maxpi

It takes a math pro to see that?

DeMark found that 5.5% was the typical move. [what, about 50 years ago maybe?] I don't recall what he was trading. I don't use that s%^t, but it's probably true... and who cares? If you have a brain you can follow a trend and see when all the different perspectives are exiting. The really short term guys take profits very early, then there is one or two more exit points where people think the trend is over. If it doesn't reverse at the first one it reverses at the second one...

When is the last time Math pros made any money, they get constipated and they have to have a pencil to work it out...

3. ### toc

Infact folks with math, physics and programming backgrounds have done pretty well as traders and/or developers of trading systems. SAC type firms loves such Phds and makes good money from their 'wierd logics'.

4. ### Martinghoul

I think you're confusing mathematics with basic arithmetic... Don't you think it's a bit presumptious to call yourself a mathematician? Andrew Wiles is a mathematician, Grisha Perelman is a mathematician, but you ain't one and neither is anyone else in the mkt for that matter (quants and PhDs in finance are actually dregs of the academic communities, if not outright failures).

5. ### Petsamo

I know a PhD who trades, who insists you don't need more than one semester of college level mathematics to become a successful trader.

Actually, basic Algebra would be more than enough. Different maths are merely different ways of addition/subtraction/multiplication or division.

7. ### spindr0

is the Market a slaughterhouse ?

9. ### Petsamo

I recommend 2 semesters of college-level statistics and 1 semester of calculus.