Perhaps he heard "avoid the bell curve" from someone who thought "pure random walk" when he said "bell curve" .... and as it is not possible to make profit from a pure random walk ... it should probably be better to avoid it ....
Great discussion gentlemen, great discussion. The way you can increase the probability of any given "event" happening (in this case, a trade going into profitability) is to use a confluence of processes (indicators) which though similar in nature are different enough so that they will balance the other's weakness and create a blended tool for measuring probability. Once this is done you see how it will be possible to generate events which have a likelihood of 80%, or 90% probability of happening. However we have only measured the probability of an event happening (lets call it the X-axis), we now need the Y-axis, which is represented by length and duration of the event, once it has happened (in this case, how far a trade will move in your direction once it is in profit). So you must also create a bell curve for these values to determine when is the "optimal" time to close a trade, and trade according to whatever profit target fits your purse and your psychology. Always a pleasure, Jimmy Jam
The bell curve is used in pricing options, supposing they have a normal distribution and random price movement. While the market can NOT be forecasted with 100% accuracy, certainly it isn't random.
lies, damn lies and statistics market data is not stationary, mean and standard deviation change over time: a bell curve assumes constant mean and standard deviation; so a bell curve is not useful here the problem I have is the shape of the new distribution and thinking I can trade it between oversupply and overdemand extreme values, the market trends and forms another distribution, in which the extreme values form the new 'middle' i just started learning market profile, maybe that will help me further anyone also facing such a problem? grtz, Gaidaros