Maybe there is still hope for my GE holding then? Another stupid question for you: Are you one of the turtles? Happy New Year.
Several years ago, when I was evaluating indicators, I was interested in exponential moving averages due to their seeming to apply an aspect of calculus that I figured would give them a certain amount of added strength. However, following subsequent experimentation, I discovered that I could always find a simple moving average that would essentially match any given exponential moving average. As a result, I left exponential moving averages behind and just focused on finding the simple moving average that fulfilled whatever function I was trying to address. The idea for my “instantaneous” moving average came from a completely different source. If I were to say anything more, people would probably figure it out, and perhaps at some point in the future, someone else will get the same idea. In fact, I can’t imagine why this hasn’t happened already. But in the meantime, I’ll just appreciate that the indicator is at least available for the trading I do.
%% Its a nickname from childhood; never lived in Chicago.I wouldnt buy GE, but being down 90%/+ from $60 area , a dead cat bounce could work?? Not a prediction; its so far below 50 dma+ most that do a dead cat bounce arent buying
moving averages are linear transformations of the time series. if you sum/weight them over different time periods you can approximate an exponential anyway. and the time series does contain useful info in my opinion so they are probably good.
If I may ask: If the market is random, then time series would not contain any information about future stock prices, so you are saying the stock price movement is non random?
Use whatever tools you can find that make the most sense to you and your own personal cognitive construct. The secret is that there is no secret. The holy grail is that there is no holy grail. If it's MA - wonderful. If it's an oscillator - charming. If it's a Bloomberg news feed - good on you. If you're scoring the collective ratings for 100 of the top stock analysts on Wall Street - Fantastic. I will say this much: if traders in general spent as much time on trade management as they did on trade entry, IMO a much higher percentage of them would be successful. My 2 cents, YMMV. Happy New Year and good fortune to all !
"You got it, Clyde." Anything (pretty much) in finance has, as its best predictor, the prior observation. Truly and completely random would have no discernible modes -- a uniform distribution. (A fair die rolled on a flat surface.) Things that follow a Central Tendency 'subscribe' to the Central Limit Theorem -- our favorite Normal Distribution, with symmetric decreases in observations as you get further from the mean, mode, and median point. That depends on IID conditions: independent and identical distributions across the event space. ANYTHING LINKED BY TIME violates the IID condition, by the very linkage to time (and thus the prior event). Time for Durbin & Watson! (Or, since the advent of easy computing over the last 40 years, time for ARCH, GARCH, and their friends, who really don't care about sniggling little bits of carry-over from one observation to the next, but in fact USE that very carry-over [linked error terms =/= 0] to minimize variance over non-minimized-but-controlled bias.