Mav this post went over my head. I think I understand what you are alluding to with time, time stops,time confirmations. But I'm not getting the variance part. Are we using ACD in the above examples? If we are using ACD as a guide wouldn't the fact that price went underneath our stop be the sign that we are wrong. In other words we shouldn't be placing stops at arbitrary levels, they should be at a level where if it hits we know we're wrong and need to get out.
Is Emerging Markets (EEM) getting ready to form a higher high? My 30 day confirmed on 4/22/15 and has stayed strong the whole pullback. The 5 day is at 7 and would ordinarily work off a few now. There was a Monthly A Down on 6/5 but you can see the pattern held in place, and the Quarterly A Down at 39.15 has held nicely. The higher highs and higher lows are ……. Obvious
DT3 when Mav referring to variance I think he’s referring to risk. Since Mav been posting again (thanks again Mav) few things have become more apparent especially my understanding about the markets and since those posting few ideas have developed which I’ll refer to as hypothesis 1, 2 and 3 (ironically all this has been staring in front of my face) Hypothesis 1: the market always seeks risk, therefore designed to screw most amount of traders efficiently as possible.( pretty efficient in that respect) Hypothesis 2: Markets are not efficient in finding value refer to hypothesis 1 Hypothesis 3: when one argues that you can eliminate risk through hedging not entirely true but I do believe you can control it. Ok guys these are some ideas that I have come up with regards to the market and my understanding, let me know what you guys think (Mav deffo want to hear your views see if i'm on the right track)
I would like to ask what factors people put int here models. I have 60 day bars in mine, along with weekly and daily. So easy to see a mean reverting asset. Failed and broken extreme levels seem to be more significant and meaningful with 60 day bars. Volatility and noise modeling , well, they require some work. Seems that pure ACD would require defining noise as a custom fraction of the Aup and Adown levels. What I really dont know Mav is if you mean that volatility that occurs within a defined noise area is ignored and to wait until price commits to a direction beyond the noise. Patience. Am i off base here? Thanks.
Here is the quote from the book "Mapping the mind" which made me stop a bit and think. Intuitively this is probably well known for traders but it is still very interesting from neuroscience perspective. This is my contribution to share something interesting
regarding the first part not exactly sure how to make this less confusing, there some advanced concepts such as variance thrown in. Variance is different from volatility which is another can of worms. I think what he is saying is that variance is the idea that stocks move around. Looking at a one year chart of MSFT it has a high of 50.05 and a low 40.12, so not a ton of movement. The historical volatility of MSFT which also bounces around based on what's going on with the stock is around 20. This means that on average MSFT will move up or down 20% annually. hopefully I haven't confused you more. In general the more a stock moves around the higher the vol.