Probabilities in a Random Walk (Question about one CP's post) | Page 3 | Metals Mine

Options

Go to
Permalinks
Print Thread

Similar Threads

Random Walk (The unbeatable!) 354 replies

Is random really random? 231 replies

Random Walk Theory applying in Expert Advisor 336 replies

Random walk and Pascals triangle 64 replies

Great Question, About Trade probabilities and MM 3 replies

Attachments: Probabilities in a Random Walk (Question about one CP's post)
Exit Attachments

Probabilities in a Random Walk (Question about one CP's post)

  • #41
  • Sep 4, 2024 11:44am Sep 4, 2024 11:44am
Quoting Fiox89
{quote} Hey AntiCre, care to explain more? do you mean your entry position is static, but the mean keeps moving? within certain limits, averaging can help Statistics is not my field, however there should be conditions under which a stationary Gaussian random walk could exist. Of course, one must evaluate the applicability to the market hint: check the Ornstein-Uhlenbeck process {image}
Dear Fiox89,

this as been just an attempt to explain why that person wrote that the probability differs from 50 % (for going back to the MA, or away). It's not been any recommendation for trading. I even believe this scenario may be hard to trade without considering further measures, e.g. the overall trend, and the trend on a smaller scale

To put it imple: Look at a Bollinger band. A trend can be considered to be strong if it leaves the band. However, even during the strongest trend there will be a retracement. And since the SMA of the BB is a lagging indicator, you will see it pushing up (during an up trend) even though pice retraces back towards the band. This "pushing up" behavio makes it more likely that price leaves the BB because during an upcoming retracement it will be quite likely hit the SMA.

Best,
AC
  • #42
  • Sep 7, 2024 3:54am Sep 7, 2024 3:54am
Quoting PipMeUp
{quote} Flipping a biaised coin that gives head says 51% of the time gives a preferrence to head. But you can still get long series of tails. => This is a stochastic trend Modify
Yes, but since it's 51% on the head side, H runs will be a bit longer then the T runs, Not much since there's only 1% diffrence.
but if you had a 60% heads coin for example. it would be more noticable.
  • #43
  • Sep 7, 2024 11:17pm Sep 7, 2024 11:17pm
If there is a certain pattern, the sign is indeed random. If there is no pattern at all, it is clearly man made. Cancer Clusters Darts.
fooled by randomness in art
Meditation All Time Return: 8.9%
  • #44
  • Last Post: Dec 2, 2024 5:06am Dec 2, 2024 5:06am
One of the deepest insight bestowed upon me was that randomness, is a pattern itself.
The emptiness of the vacuum of space is not empty, but the emptiness itself, is the space.

The definition of randomness can be synonymous to "unknown or idiot".
Until one realizes that randomness is also perfectly structured.

Can we work on something we yet don't understand? Yes.
It's no different to a caveman starting a fire, yet don't have theoretical knowledge of combustion.

The problem is that we try to disregard randomness into nothing.
Yet all different variations of randomness will still have a statistical presence.
Even if the statistical presence is zero. Even if the probabilities are zero. That itself is the pattern.
And that's the reason why Zero was added. It is part of the structure that can not be disregarded.
There is no such thing as "no pattern". Because "no pattern" itself, is the pattern.
0 traders viewing now